All Forum Posts by: Jeff Dzado

Quick follow-up for those interested. Through an interesting set of events, I found a STR property manager local to the area (who also owns an STR in the same area). Turns out that the location is the most popular wedding destination in the Pacific Northwest. Also, homes on the water, with a view will rent for ~$300/night and have great occupancy traits. Take the property off the water but keep the view and it is ~$275-250/night. Take the property a block of two off the water and have a slight view, it is down around $200-225/night.

The area is super-boosted by the destination wedding location, and the views and water access of some properties make it super attractive. 

Go 20 minutes to half an hour away to a nice area further in the mountains with a nice private lake? Doesn't matter--People are going to the other location because of weddings.

Mystery solved for me. Thanks everyone for your input! It was all very helpful!

FYI, ACH can be used for scams too. If your property is performing how you like it, why take the risk?

Another article I read suggested that, John. Still possible, but not likely? Like anything, it is really difficult to know without tons of research. 

Michael, from what I can tell, Brian is only sharing information about what he has seen.

I wonder if anyone is trying a cash for keys approach...

Bradley, what are some good questions for finding such a realtor? I found a realtor for my quadplex by finding them through someone on BP in the area and interviewing them. Maybe I'll search for area keywords... That worked before. 

Thanks for the conversation here and for the feedback! I super appreciate the advice--will definitely take it into serious consideration, especially given how much success you've had and how respected you are within this community!

Also, it was a guy at Evolve I spoke to about the Scenario A. I thought he was giving me specific rental numbers, rather than market level analysis. Maybe I need to circle back to him about it.

Hey Luke, thanks for the link. I saw that post earlier today.

Avery, I'm interested in the area because we're looking for a place nearby (2 hours driving distance for us) which can double as a family vacation place a few weeks out of the year (mostly off-season).

We're still looking in different areas also, but all within 2 or so hours of driving.  We're looking for a place which we would like to vacation, but also is justifiable as a vacation rental. Maybe that is a harder approach to take to the problem?

@Avery, Thanks for the reply. I have been looking at nearby properties and I have a good idea of what the rental $ should be--but it is VERY difficult to get a full year or two picture from looking at a couple of months of calendar especially right now--because they are mostly all vacant because WA State is pretty much still on lockdown.

How do I get a big picture view including seasonality for occupancy rate in an area, is AirDNA the best it gets?

It also seems like a huge gamble to operate if I don't know quite for sure the variables involved to make a place have 33% occupancy rate on the year vs 75% occupancy rate on the year. Both are on VRBO, Both are listed for $150/night, both have similar reviews, one is "full", the other not. It's a big blackhole of understanding for me, and I'm trying to color in the picture a bit more.

Maybe I need to start underwriting individual properties rather than trying to understand the market as a whole? I still don't know how to narrow down what I'm looking for, though...I want to make it easier for myself if I can.

The short version, with direct questions: I've started analyzing vacation STRs in different areas of Washington state. My efforts are primarily focused in areas near the Hood Canal. I'm really struggling to come up with reasonable occupancy rates as inputs to my spreadsheet models. What data sources can I trust so I can more reliably narrow down my criteria and underwrite a deal? How can I learn what variables are important (Is it views? Is it a specific location name? Is it purely marketing prowess?)? How do you underwrite your first vacation STR with so many unknowns?

The long version w/confusing information and a small bit of rambling/trying to process:
I spoke with a STR company, and they suggest some parts of the area, a 1 bed/1 bath cabin: Situation A, have 15% occupancy off-peak, and 50-70% occupancy during a 4 month peak. A realtor I met with (not too familiar with STRs) sold a property recently in Situation A which had revenue which lines up nearly exactly with this occupancy rate. I recently stayed at a slightly different 1 bed property which is ~30 minutes from the area and closer to 'normal' civilization, Situation B, (with amazing views), and the owner said he has a 6 month peak of 100% occupancy and 50% occupancy the rest of the year.

I've looked at AirDNA, which I've recently learned about, and the free views claim that that rentals in Situation A have 50%+ occupancy rate, resulting in nearly 2x the revenue I would expect from from the information from the management company in the area. 

One piece of information says a $150k property won't cash flow. Another says that I can pay $300k+ for the same property. And if I can learn the variables from Situation B that result in their high occupancy, can I apply them to Situation A and pay $450k+?