All Forum Posts by: Jon Martin

Thank you all for the replies. For the record I am not going this route in the near future, simply trying to understand. The reason I asked is because the aspect of how the seller gets compensated for the equity was not adequately covered IMO in the podcast episode. 

Just listened to the Pace Morby episodes on the regular and rookie podcasts. Really fascinating stuff but I'm still trying to wrap my mind around a dew details. 

Mainly, in the scenario described where it's a zero cash sale and the owner has a lot of equity, the seller is not walking away with any kind of lump sum like they ideally would in a traditional sale, correct? (Unless the seller negotiates for a certain amount down, at which point it would not be a zero cash down sale by definition). Instead, the seller is financing their own equity back to the buyer over an agreed upon amount of time, and if there is still a mortgage the buyer is also assuming the remainder of the loan?  

Do I have it right? 

Not trying to throw shade, but a seemingly $1300/month profit spread that then gets WIFI/cable, water, power etc deducted from it is not what I'd call "crushing it". If by mortgage you mean PITI, I'm guessing you have around $800-1000 leftover per month after paying the bills that normally an LTR tenant would pick up? Which is a nice investment, don't get me wrong, but compared to what many posters here pull from their STRs is fairly average.

I'll be surprised if this "loophole" is still around in a few years. 

 Good call, it's worth the wait. Property looks awesome!

For the market as a whole or per unit? If the former, are there specific reasons for this?

@Sarah Kensinger 100% agreed on everything you wrote. When I look at other listings in markets where I actively or consider investing, everything managed by Vacasa, Evolve, etc is barely over a 4.5 with wide open calendars. Many of them homes themselves have decent potential and are near others that do pretty well. 

@Ryan Moyer also agreed. The market I'm in is up 68% YOY in term of searches but I still see the average listings struggle, and they should. It's better for the market for them to wash out and sell their property. 

People will always travel no matter how the economy is doing, it's how they travel that changes. Instead of 1-2 weeks international they opt for a week somewhere in the lower 48 or something they can drive to, which could even help some domestic markets. Just like when beef gets expensive people don't stop eating meat altogether, but they will opt for cheaper cuts and/or eat more chicken. Travel, while not essential for physical survival, has similar trends. 

Absolutely valid. My comments are specific towards the UI and payouts which I find noticeably clunkier. In terms of business practices they seem like the clear worse of 2 evils. 

From my limited experience, the AirBnb UI is far more intuitive and user friendly. For example, I was trying to find a guests phone number in VRBO because they were having trouble with the lock, so I clicked on the email where he made the inquiry and it wasn't there. After messing around all over the place I finally realized that if I clicked on the email where he messaged regarding the completed booking I could see it. Stuff like that is just dumb and not user friendly. 

VRBO also takes its sweet time to payout. I've been paid for 2 bookings with AirBnb (one who is still there) in the time since my VRBO booking that checked out over a week ago and I'm still waiting for it. Not that I need it that soon, but it's always nice to get paid out sooner given that we are constantly paying vendors who expect to get paid soon as well. 

As time goes on and I figure out the nuances on the business side I may grow to favor VRBO but for now they play a distant 2nd fiddle and their Host UI leaves a lot to be desired. 

Another vote for self management here. Way easier than many will lead you to believe with all of the modern tech, even from another time zone. 

Only situation where I would strongly consider it is if your STR is in a market with a tight labor pool and sparse amenities where it's difficult to get things done without boots on the ground. Given that you are in south bend, you should have easier access to support services and amenities than you would in a place like the smokies. For example, you can always have Costco or Target home delivery drop off a pack of toilet paper or whatever with relative ease and expedience compared to some place in the boonies.

I also see some local management companies being less competitive. When I look at some neighboring properties under management, a lot of them have emptier calendars and higher daily rates because the management companies have to price in their overhead. It’s great that they have their own in house cleaners, handyman, on call errand runners etc but all of that that comes at a price. Plus you have to get in line on turnover day with all of their other properties, whereas if you hire an independent cleaner maybe they will prioritize you if you take good care of them. My go to cleaner does mostly local homes, so it’s easier for her to knock those out in the morning and then be at my place right at check out time. 

End of the day it comes down to your situation. If you really don’t have the time and/or desire to deal with it then yes, it’s worth it. Or maybe you scale to the point where it becomes overwhelming and you don’t want the headaches, where at that point you probably need the revenue less. That should the goal!