All Forum Posts by: Braedon Page

"Saturated" is a bit of a throwaway term IMO - I manage STR's on Oahu and while Hawaii is about as "saturated" as it gets with STR's, people are making great returns on the right investments. That being said there are also bad deals in any area, here included.

I would run your numbers based on historical data from airbnb - pretty easy to check on airdna or even just going in the airbnb app and seeing not only what nightly rates look like for certain properties but what their occupancy is - from there you can estimate monthly revenue with a reasonable degree of accuracy and see if that lines up with your targeted returns. Also, most decent STR property managers will be happy to offer projections for properties, or even realtors who do a lot of STR business as well. I would advise taking these with a grain of salt because some can overpromise, but if you ask them to show you the data behind the projections this can also be a way to accurately project what your returns will be.

Hey Shaun - congrats on closing your first STR!

Couple of things to consider for your question.

In terms of software, it depends on what part of the management you are trying to work on. We use hostfully to list on multiple channels, pricelabs to help with maximizing REVPAR, U-Tec to manage smartlocks, and turno to manage our cleaners. That being said, with just one unit you don't necessarily need a gigantic software stack to manage effectively. It's entirely possible to manage you cleaners via text or whatsapp, only list on airbnb or list on just a couple channels and manually make sure you don't have double bookings, manage your pricing manually, etc. I would say that a good smartlock with a mobile app is always a good call. 

In terms of whether to self-manage or hire out management - that's really a question that depends on you. Some things to consider on this front - 1) do you want to manage your property? Does the thought of creating a great guest experience and putting a smile on the faces of your guests gets you excited or does it sound tedious? 2) Are you good at it, or willing to learn to become good at it? 3) How much time do you have to devote to managing, and would this time be better spent elsewhere?

I manage STR's on Oahu in Hawaii, but I know a lot of people who absolutely crush it managing their own units. Those people get excited about creating an awesome guest experience, they love to nerd out about revenue management, photography, staging, and other parts of the business so they get really really good at it, and they have jobs that allow them the time to manage themselves (and this doesn't have to be a lot of time btw). Conversely, I also know people who find communicating with guests and cleaners to be incredibly draining, they don't know the first thing about managing an STR nor does it particularly interest them, and they would rather spend their time making money in their main job rather than taking on a side hustle that they may not be able to do as effectively. When the first type of person chooses to self manage, they generally have a great experience, and they also get to pocket the extra 20ish% that they would pay if they hired someone else to manage their STR. When the second type of person tries to self-manage they end up frustrated and honestly making less money than they would if they found a property manager who actually does this full time, knows how to run an STR effectively, and just paid them to do it.

There's definitely no one right answer for everyone, but a long look in the mirror sure helps. Best of luck!

So the three types of zones aren't "official" per se, so I would advise speaking with people who would know i.e. realtors, investors, property managers, others hosts, etc. and simply asking them what the medium to long term outlook is on STR regulation in that zone is. They can probably give you a good feel for which of the three buckets your area would fall into. In high demand areas, more regulation can actually be a good thing in an STR sense - it means that they've accepted that STR's are going to be a significant part of the area and have established a process for how people can do them legally. It's less likely (in my opinion) that governments will pass broad, sweeping legislation against STR's in an area that they've already established a robust process for how someone can do it legally. On Oahu, for example, we have "resort zoned" areas that are mostly hotels and condotels, and there is a permitting process, different property taxes, etc. for real estate bought in those zones. To illustrate the other side, the rest of the island (outside of these resort zones) has historically been a place where owners can only do MTR's - 30 day + stays, but new legislation just got passed and it's looking like a minimum 90 day stay will be required. If this passes and someone ran their numbers based on 30 day stays, they could see a significant hit to their bottom line.

In summary, talk to people who know, ask them what they think will happen in that specific area, and know that in high demand areas an absence of rules can honestly be a red flag - it means the STR conversation hasn't happened yet and leaves you vulnerable to whatever the decision is once it does.

Lot of great replies on here already - only thing that I would add to consider is getting a few outside opinions from realtors, other hosts, property managers, etc. about the medium to long term outlook for STR regulation in your specific area. I manage on Oahu in Hawaii and I would assume based on things that I have heard from other hosts and managers in CA that the conversation around regulation would be somewhat similar given that it is a highly desirable destination for both guests and investors in the STR space.

Speaking only to what I have experience with here - there seem to be three types of zones that vacation rentals fall into - on one hand you have zones where they are illegal, and while it is possible to run and gun in these areas I don't think the risk is worth the reward if you get caught. The second type of zone is one that is loosely regulated (legal now) but where a lot of the conversations regarding STR's are still being had and could change rapidly in the coming years. We advise clients to stay away from these zones on Oahu, or at least make sure they pencil as a long term rental before making any big decisions. The third zone is one that is highly regulated, perhaps taxed at a higher rate, but has an established process for STR's and the risk of changes in the laws regarding airbnb or other OTA's is relatively low, simply because those conversations have already happened and the local government has decided that they are going to allow them in the area and have an established process for permitting, etc. On Oahu the bottom line of buying in this type of zone is that you will pay higher property taxes and fees, but you have a lot more confidence that you'll be able to continue to operate your property as an STR for years to come. I would assume that some version of these three zones exist in OC and it might be worth looking into where yours falls before settling on a STR vs LTR strategy.

 That's amazing - would love to connect down the road when we get to that level (hopefully sooner than later) and talk about how you were able to do those partnerships - those are some big names.

Thank you so much for the context. Definitely seeing the wave of DIY hosts waning a bit now that competition is increasing. 

Curious - what are the biggest things eating into your profit? Salaries for the FTE's? $1.3M in revenues is awesome, but I would've expected more of that to go to your bottom line. 

Again, thanks for all the info and transparency!

Hey all,

I am the cofounder of a new property management group on Oahu. As I start this venture, I want to avoid the mistakes of other PM's and learn from those who provide and excellent service to their clients. I know that many in the bigger pockets community are more the DIY type and self-manage, but for those of you who have used property managers for your short term rentals, what have been the pros and cons of your experience? The general sentiment toward STR PM's seems to be a bit negative, but there are still a lot of management companies and for a good chunk of STR owners there seems to be a need for management services.

Those who have great PM's - what makes them great? How did you find them? What do they do better than others?

Those with negative PM experiences - what happened? What would you recommend to my team and I as we start out to avoid those same mistakes?

Congratulations on your success Abdullah!

Curious - what methods did you use to acquire new clients in the management space? Were there channels that worked better for you than others?

I think that add ons are very market dependent. Also I think that the opportunity cost has to be considered. How many units of effort do you need to put in to get a return out of it, and how big is that return? For me, selling merchandise like coffee mugs, etc. out of the space sounds like a decent bit of effort for what would probably be a negligible return.

I manage STR's in Hawaii, so we have a few options many folks don't have, but we are just beginning to try to sell add ons. Our strategy so far is to focus on the most expensive things first - those are the things that will add the most value to the guest as well as make us the most money as a company, and therefore be worth the time investment we put in. Island tours, whale watching, booze cruises, rental cars, etc. fall higher on the list for us than selling lei's or other small souvenirs for example.