All Forum Posts by: Eva Mackowski

Quote from @Kevin Pillow:

Quote from @Wilson Hunter:

While I’m bullish on STRs for the longterm and will continue to invest in them, the situation is different than 2020 and is not only interest rate hysteria. There is a legitimate decline in vacationing in many markets (especially mountain markets or low lead time markets) in the summer of 2022. This is likely to have some effect on prices in the next 3 to 12 months. For example, many Smoky Mountain cabins were priced in anticipation of continued tourism growth from 2021 numbers. While the decline or normalization is fine for most of us it definitely is not fine for many of the cabins purchased in the past 6 months. I have a hard time seeing how 90% of the cabins sold in the past 6 months in the Smokies are making money with the numbers for this summer, for example. This is the same for smaller cabin Blue Ridge where you can already see price drops on types of cabins that were being bid up way over list merely 3 months ago. 

A similar trend was happening down here, I could go into the price history for 10 actively listed vacation properties and 6 of them would have been bought between 2020 and 2021 with an increase of 30%+. When I look at the photos from when it was purchased to when it was relisted there are no upgrades except the price. It's just what happens at the peak of a cycle so you're right about legitimate concerns with overpriced properties in vacation markets with declines in vacation goers. I just don't think people should throw the baby out with the bath water by saying STRs are dead or not worth investing in now.

I think that STRs are worth investing in, just not 100% of the time.  You just have to know your market and you have to do the analysis.  Has to be a strong deal.. can't be a small margin or 10% coc.  I make sure I have at least 9-12 mos of cash reserves so that we can ride out a downturn in the market.  I mean, after all, the whole purpose of investing is to make money, not break even.. ;)

Quote from @Kevin Luttrell:

Quote from @Sean Bramble:

Quote from @Wilson Hunter:

While I’m bullish on STRs for the longterm and will continue to invest in them, the situation is different than 2020 and is not only interest rate hysteria. There is a legitimate decline in vacationing in many markets (especially mountain markets or low lead time markets) in the summer of 2022. This is likely to have some effect on prices in the next 3 to 12 months. For example, many Smoky Mountain cabins were priced in anticipation of continued tourism growth from 2021 numbers. While the decline or normalization is fine for most of us it definitely is not fine for many of the cabins purchased in the past 6 months. I have a hard time seeing how 90% of the cabins sold in the past 6 months in the Smokies are making money with the numbers for this summer, for example. This is the same for smaller cabin markets like Blue Ridge where you can already see price drops on types of cabins that were being bid up way over list merely 3 months ago. 

I’m at an STR conference in Nashville right now and am hearing this over and over again from Smokies investors - bookings are way down for the summer. Spoke to one guy who is still investing in the market, but he stressed that he is underwriting his deals with an avg of 2019/2020 revenue (rather than trailing 12 mos figures Airbnb is spitting out). What this means to me is the “shoot from the hip”/ buy anything and it will cashflow days of STRs are over. You have to get your hands dirty with analytics to make money in this industry, and a black box estimate Airdna shoots out just isn’t going to cut it anymore 

I'll 2nd that - our bookings are down quite a bit from last year at our cabin in the Smokies. All the more reason to make sure your STR has unique features to separate from the competition. Something to differentiate you from all the other cookie cutter cabins around you.

I will say for us at least that we haven't been hit with lower occupancy necessarily, just much shorter lead time. We're booked for June and half of July right now - average lead time has been around 30 days lately. Last year we were consistently booked up months in advance. 

Agree with all of you.  We own in the  Smokies.  Bookings are slightly down, and booking window has tightened up quite a bit.. We purchased 4 years ago.. We are in it for the long haul.  I've been analyzing quite a few properties, and haven't found anything that I just can't live without. 

Quote from @Wilson Hunter:

While I’m bullish on STRs for the longterm and will continue to invest in them, the situation is different than 2020 and is not only interest rate hysteria. There is a legitimate decline in vacationing in many markets (especially mountain markets or low lead time markets) in the summer of 2022. This is likely to have some effect on prices in the next 3 to 12 months. For example, many Smoky Mountain cabins were priced in anticipation of continued tourism growth from 2021 numbers. While the decline or normalization is fine for most of us it definitely is not fine for many of the cabins purchased in the past 6 months. I have a hard time seeing how 90% of the cabins sold in the past 6 months in the Smokies are making money with the numbers for this summer, for example. This is the same for smaller cabin markets like Blue Ridge where you can already see price drops on types of cabins that were being bid up way over list merely 3 months ago. 

Completely agree with Wilson.. We currently own in the Smokies. Purchased about 4 years ago. I am also watching several other markets and waiting to buy our second STR, maybe in a different market. I'm not seeing prices come down yet in the Smokies, so not sure how long before pricing cools.. anyone have any ideas on that?

I have a propane tank on our property in Wears Valley. We have 2 fireplaces (one inside and one outside) and our large grill all run on propane, so its worth it for us.  We pay a yearly lease, but it isn't $100/mo, more like $100/yr. We do get the propane filled a couple of times a year, maybe $300-400/yr.. We don't do the tank monitoring either, I just have our cleaner give me the reading from the tank from time to time, so we keep a handle on it.  We don't run our fireplaces all year round either.  We have it available for guests October thru April only.   Never had an issue with a guest messing with the fireplaces or pilots.  I'd also like to mention that I wouldn't turn a gas fireplace into an electric fireplace. In the event of a power outage, there would be no way to heat the cabin, and imho, electric doesn't have the same ambience as wbf or gas, but thats just my opinion.  I'd leave it gas, and maybe get a grill that you can pipe into the tank to make it worth keeping.  Just a thought.  We self manage from Texas..

I guess if a deal makes sense, it makes sense, right?  regardless of whats going on in the market?  Just trying to figure out what criteria are the most important to me, I guess.   What guidelines help you when making tough decisions?   I'm staying in the 500K or less market.

Hi Everyone,
anyone still investing right now?    I am looking at a mountain property in GA, and just checked rates.  wowser..  no more 10% down on second homes, and interest rates are at 6.625!  yikes.   What about property values being at an all time high?   anybody out there with a crystal ball, or care to discuss theories on what you think is going to happen out there?  Trying to decide if I should buy now (are we at the top of the bubble/), or should I wait?  What are you guys doing?

we've decided to move away from the forebearance/suspension of any mortgages.. We will tough this thing out.. Too much risk that our credit will be damaged, regardless of what the mortgage folks tell us right now..     Too risky to chance with so many unknowns in my opinion.  Stay safe out there..

I've been on the phone with all 3 mortgage companies.. So far, 2 have reassured us on the phone, not in writing that no lump sum will be requested at the end of the term, and that our credit will not be damaged.. However, the 3rd one we spoke could not say and did not know what the payment schedule would look like,  or the term, so this is a huge question for me..  Of course, we are in uncharted territory here and noone really knows.. I'm just trying to stop the bleeding for now until we know what we are dealing with and how long it will take to recover.

Good Morning fellow BPers.. I hope everyone is doing well.  I have some questions on whether to sign up for a forbearance or deferral program with our mortgage on our home and 2 STR's..    We have 2 STR's that have been heavily hit by COVID, and we've talked to our mortgage company for both, including our primary.  Thinking of moving forward with a 90 day hold on mortgage to save some cash in case we need it.. We do have a little cushion that will get us through, but I'm not sure what the long term effects will be on our STR business down the road.. We may need our cushion once all the stimulus, SBA's, forebearance/deferral programs are gone..  Anyone have any experience with this?  There are 2 things that bother me when dealing with the big banks, and that is they don't seem to know what the expectation is to repay the suspended payments, ie, are they going to want a lump sum at the end, are they going to want to charge crazy high interest rates, etc... and they are promising that no derogatory credit/statements will be made on our credit.  I want to see what others thoughts are on this issue, and if you have experience with this, what happened to your credit?

Thank you so much.. There is much experience in this group, and I'm struggling with whether to trust the mortgage company and hope they are really trying to help.

Thank you so much Julie!  I appreciate it