All Forum Posts by: Emily Simmons

Has anyone gone this route as an owner/host, and what has the experience been like?  

If I had $40k lying around to spend on a program, I'd rather put that toward my first deal.  If I didn't have enough knowledge to buy my first deal, then I'd want to put it in a high interest savings account while I learned.  Just me.  I tend to want to tweak anything handed me to me anyway, so I plan on building from the ground up.

Only you know what you're willing to do/give up.  Just count all your opportunity costs before spending the money.

One of those inspirational FB memes came up in my feed yesterday, and it's basic sentiment was that at some point, you just have to do it scared. Take the leap of faith. And I appreciate that kind of encouragement. But at some point, your fear is actually warning against doing something stupid. So in terms of REI (and especially for beginners who haven't leapt at all), how do you know you're doing it scared and not doing it stupid?

Quote from @Michael Baum:

Hey @Emily Simmons, so this can be an issue depending on where you are looking. Sometimes things stand out for why they are getting a better rate.

How are you determining the rates and occupancy?

I have been playing with the Awning.com estimator - https://awning.com/airbnb-estimator

These algorithms can be hit or miss depending on the area and how many STRs there are. I have found that they can be wildly inaccurate but they are a tool that can help.

If one property had a 95% occupancy, does it have a better view? Waterfront? Larger? Cheaper?

If one has a 16%, are they overpriced?

What are the ratings for each property? Anything much under 4.8 stars will garner fewer bookings for the less than stellar reviews.

Photos play a big part in bookings. If it looks good, then people book. If it looks mediocre, then they get fewer bookings.

This can be a hit or miss kinda thing.

I’m using Awning and Rabbu.  I’ll double check the stats and ratings, but no, the postings over 85% were more expensive, but also almost ritzy looking, to the point of sacrificing wise use of space for nicer decor. One was definitely oceanfront, but all had ocean views.

I’m looking in Hilton Head Island, SC and Helen, GA for now.  It may not be where I buy my first property, but I’m familiar with the locations, and that helps.

I’m very much still in the learning phase, so if this is a dumb question, please forgive me.  For what it’s worth, my goal is cashflow, but I won’t be able to buy super nice properties to begin with.

When I’m looking at a market, it’s hard to understand how the outliers ended up the outliers.  Or whether a given property could be charging more and just isn’t.  That makes it tough to figure out if a property is a good deal or not.  E.g., if a property has 95% occupancy on Airbnb, does that mean it’s possible for me to eventually hit that, too?  If the majority of properties have occupancy in the 70s, can I expect to start out around there?  If occupancy is 16%, how can I figure out why? 

 If some are charging $98 and some $395 for the same floor plan, where would I set my price?  Most look about the same as far as updates and decor go. Nothing looks seriously outdated or rundown.

I think demystifying the analysis process is going to be a huge hurdle for me.  I eventually end up overwhelmed with numbers and discouraged.

I’m currently reading The Small and Mighty Real Estate Investor and Short-Term Rental, Long-Term Wealth, so maybe I just haven’t hit those chapters yet.

Thanks for any advice!

Anyone? If my numbers are off or too low, tell me. I'm all ears! I know I counted cleaning twice, but while the HOA includes "housekeeping," I'm not sure what that includes, so I added another $125 fee per stay on top of it for actual turnover (e.g., the housekeepers only do linens and don't unload the dishwasher or replace shampoo, etc.). If they did those things, then the cleaning fees paid by the guests would pretty much cover the monthly HOA cost (I'm assuming 4 guests per month on average based on the occupancy rate).

Quote from @Veronica King:

Quote from @Emily Simmons:

And how much down plus cash on hand, typically?  

typically 15-25% down payment  

 How much on top of that is good to get set up?  I've seen $10k/bedroom as a rule of thumb.  
Does it matter if the property comes furnished or not?

Quote from @John Underwood:

Read Avery's book and Chad Carson's New book. "The small and mighty investor."

They are both available in the BP bookstore.

 I already love Carson’s book.

Quote from @Bill B.:

You’re over $500/mo cash flow already. Put it in a 5% cd and you’ll be over $600/mo. I don’t think you’ll find a rental that cash flows a guaranteed $600/mo. I don’t know how a cash flow investor can find a better deal than the bank on anything but the cheapest properties in the country. Or some kind of low money down assumption and a prayer the bank doesn’t find out. 

 Do you mean short- or long-term rental won't cash flow $600/month?  Or is there not really much difference (seems like there is, but I know very little).

I want to know if this is what I can realistically expect for net on an STR. The Regime/HOA covers everything except electricity. It says it covers insurance, too, but I'm wondering if that's resort insurance vs. insurance for the unit itself. Clarification there is welcome from anyone who knows if there's a distinction. I've talked with the resort's rental manager, so the occupancy rate is the specific resort's average. I've seen nightly rates in this resort for under $200 to nearly $400 for the same footprint as what I was looking at. I wanted to be conservative, though. Even a $15 uptick in nightly rate would add $300/month, though (assuming the occupancy rate is good).

Also, is there anything fundamentally wrong with my number crunching? Am I missing anything super obvious (and expensive)?