My team and I talk with 1-2 people a month that want to sell their STR in the pocket communities in and around St. George. They are not making the ROI or even breaking even from what the "model home" salesman told them. This is largely due to being overbuilt all over the place. Huge supply for the demand we have... and supply is still growing.
In Hurricane it is a little different because, outside of the PUD communities, they only have 48 permits. Simple supply and demand. And some cool houses have the permits.
The rentals in Hurricane that do well can sleep A LOT of people and they offer something unique, something different. (sport court, lake, indoor golf and some amazing pools). I have seen a few smaller "pool houses" hit the market and sell at a huge premium (20%) because they have the permit and good set up. Not sure how these STR numbers pan out, but the opportunity is limited and they sell in hours.
Keep in mind this has been a "sexy" asset class and most people don't understand or even look at the numbers. Some have even told us, "it's ok the values are going up"... can you say speculation. 🙃
Yes... St. George has a HUGE saturation issue with STR. I own ZERO in St. George.
I have 4 properties in Brian Head. My two large cabins that sit side by side do very well and this numbers keep going up. Sadly I am selling them to float a commercial project that we lost a gym tenant with Covid (it's a sad mess).
The cabins do very well as we are the only side by side option (unique selling proposition) for large luxury accommodations and we book 95% family reunions all summer at a premium. It makes renting to large groups awesome. We did 28 days in July even with Covid.
I have condos in BH that I am also selling... too much supply and hard to be different then the condo next door. The numbers are not great and I own them free and clear, I need the cash.
We got hit in March and April with Covid and lost $50k in bookings... but within 6 weeks we started booking at a premium as people want to be in the mountains and away from the city. So we had "covid shock", but we are very solid with mountain recreation. Brian Head is the new Utah Park City. Lots of Vegas and Cali money that come to the mountain.
If we want to talk Zion or Springdale... we are all simply late to the party, it is CRAZY regulated (understandably so) and if you got in early you hit the lottery. I don't see anything selling on the open market.
Hope that helps! 👍
