All Forum Posts by: Doug H.

@Psalms Salazar

Eh, that seemed like a pretty solid response from a pretty active member of the community who has a fair number of STRs and a fair amount of experience.

The wise thing might have been to ask the reasons behind the response, although now, I'm assuming that fewer people would invest the time in trying to help you understand the true risks of STR arbitrage after your response.

@Doug H.

Oh wait. This is only for two weeks? (Sorry. Skipped over that.)

Two weeks - not even worth thinking about / the trouble.

Tweak your rates on Air / VRBO and fill the space.

Also, ask yourself, what kind of guest is this who wants to go to this much effort to save a little money? It’s probably not someone you want in your space.

Cheap guests =‘demanding guests = never satisfied = always asking for discounts and consideration during the trip = bad reviews.

@Matt B.

Well, the first thing that comes to mind, is IF he found you through Airbnb or VRBO and then you let him book offsite, you are creating a minimal, but possible, risk to your business relationship with that platform.

I’ll spare you the discussion of “procuring cause” and “right vs wrong”, but risk vs reward is probably what you want to consider.

On the rare chance it goes sideways and the guest tries to tangle you back in with the booking platform for the guests gain or leverage, is this booking worth maybe getting banned from Air or VRBO?

If they came to you though some other advertising you own, then go for it.

You have the insurance. It’s just like leasing an LTR. Do a credit check, make them sign an agreement, collect money.

@Dave Stokley

Wouldn’t that be glorious.

@Isaiah Ortiz-Hoyle

That’s essentially it, yes. If CCC doesn’t veto it, then the City would come up with process for the permits, etc.

If they learn from Santa Monica and similar situations, they will hire 4 researchers and 2 dedicated code compliance officers. Enforcement would become, at least, self-funding, if not profitable.

I’m the past, San Diego has employed extra code compliance to pro-actively seek out opportunities to fine owners, so it’s not outside of precedent.

There is also likely to be a lot of neighbor / NIMBY reporting.

When CCC killed it in the past, their reasoning was along the lines of “STRs are essential for lower and moderate income Californians to be able to utilize the beaches held in the public trust for their use in this area.” There are very few coastal hotels in SD.

The worry is that the past bill was a total outlaw, but on the face of it, this new legislation seems less drastic. Estimates are that some 2000 existing STRs would not receive permits. Airbnb / VRBO and CCC may think “ok, 5000 STRs stay and 2000 go… that seems reasonable.”

Also, note VRBO is now part of a holding group which is much more aligned with the hotel industry’s interests….

Anyway, where this new legislation is brutal, is for investors at scale. The thirty five I have in San Diego would have to be reduced to one, if I am lucky enough to get a permit in the lottery.

Again, the city of San Diego will probably be smart enough to follow the other cities which have figured it out. On the permit app, I'll have to declare ‘everyone with a financial interest' in the LLCs, and once a permit is issued, all those people will no longer be eligible. So, there won't be an LLC dodge.

@Paige Martin

Don’t fight it.

Per Google, the blocks usually involve guests who are under 25, live within 50 miles, without reviews and trying to book an entire place.

That’s a statistically high risk profile for shenanigans.

It’s annoying when it happens, but you may have just dodged a bullet.

@Isaiah Ortiz-Hoyle

The city of San Diego, has actually passed code this year which would decimate anyone who has multiple STRs in the city, via a “1 per owner” condition, limited number of permits insufficient to cover the existing STRs, a lottery system, etc.

However, the city has paused to see if the California Coastal Commission will veto that in the coastal zone, which they have before.

This is the second time in four years where the city has passed a code designed to drastically curtail STRs. Eventually, they are going to come up with one that sticks.

I would at least wait until the Coastal Commission puts forth their will on the matter, before you invested any energy into San Diego STRs.

@Leon Lee

No fancy solution. I just had to manually do the hundreds of pre-existing reservations. But, after that, it has all been smooth.

@Hayden Wright

For me, managing a 30 unit “C” property is at least 10 times the work as managing a 30 unit “B” property.

Hmmm, where in Utah?

Scottsdale was a great market, but we are getting huge pressure now, and the same thing….. house prices have nearly doubled without any meaningful increase in rates with tons of additional STRs coming online.