All Forum Posts by: Joseph Bafia

Here are my comments coming from a first time investor and having it be a vacation rental (STR). Its not fair to say it's not the right type of investment for a first timer or that a new investor is "not ready" for the upkeep. It's a matter of what is right for the individual person and what THEY are ready for. Someone may not be ready to handle a tenant who will be living in their property for a whole year and deal with those problems as a long term rental, so my thought is how is that different from dealing with guest issues. Every type of REI has pros and cons.

Our first investment property is a vacation rental cabin.  We self manage.  We get great reviews and we make great money doing it.  The process we have created is very simple.  All reservations managed by VRBO or Airbnb, have a great housekeeper and handyperson.  Its 4.5 hours away from our home and we spend very little time "managing" it.  Housekeeper has a checklist and that includes telling us if toilet paper is low...in that case, we order more from Amazon and ship to her.

Is vacation rentals for everyone? No. Is it for first time investors ...why not? You have to decide and thats the beauty of REI options. Its not a matter of "well I can't do a STR as a first time investor", but rather how the BP podcasts states to ask "How can I do a STR as first time investor?"

@William Hurd if you search the short term rental forums on BP, you will find MANY succesful people, information and ideas on how to make it work.  Nobody has all the answers, but you'll likely find what you need.  My 2 cents.

My favorite book with EVERY answer has become the "magnifying glass" search tool on BP.  All I do is put in something like "Do I offer Keurig coffee pods to my guests?" and countless results, suggestions and comments.

@John Underwood said it best with you can find everything here!  and I've listened to many BP podcasts on the topic thanks to guests like @Luke Carl 

Occasionally get a nugget of info from @Paul Sandhu :)

Hope this helps!

@Jonathan Buehler I looked at it and maybe because my market is smaller, it wasn’t as accurate. I think it may work well in a city with MANY STRs, but my method was simply finding comparable homes to mine, seeing what they rented for (I only picked those that had bookings and reviews) and made my rates from there. Now I adjust based on what I did last year and how fast I booked. I feel I’m pretty good now and run about 70-75% yearly occupancy (my summer and fall gets as high as 90%+). It’s all about knowing your market.

Many in the STR community will tell you that managing from a distance can be done (self-managed). I manage mine from 4.5 hours away and would be happy to share insight, but essentially a strong housekeeper, local handyman and a working phone with mobile app capability is all I need to run our cabins.

As for rates, search other properties on VRBO & Airbnb in your area to get an idea.  We adjust ours regularly (again from our phone) based on demand, time of year and historical info from past years.

Good luck!

@Myles Young Welcome to the great world of REI. I have a couple of properties north of Asheville in Mars Hill. Although I live in Raleigh I'm always on the hunt for more opportunities in the Asheville and surrounding area. Send a PM if you'd like to connect and swap stories!

Joe

@Benjamin Seibert definitely fortunate. We would still be ok putting it as STR since the area reopened to visitors but I figured I would diversify and have one STR and one LTR if Covid round 2 hits this winter and another freeze gets put on STRs.

Hope the strategy pays off!

Investment Info:

Single-family residence buy & hold investment in Mars Hill.

Purchase price: $86,000
Cash invested: $16,000

2nd property purchased in Mars Hill.
2/1
Intended to do as STR but ended up as LTR (for now)

What made you interested in investing in this type of deal?

Already had 1 cabin in this community that was doing well. Saw the potential for additional short term rentals in this market.

How did you find this deal and how did you negotiate it?

Found the listing on Zillow. Listed at $149k. Although a fair price, it needed alot of updating. Since we didn't have to have this property, we offered $95k which we had no expectation of acceptance. We got a counter of $129k and we declined. Told realtor to reach out if they changed their mind. 3 sisters inherited and wanted to get rid of and finally accepted $95 and then after inspection we got it down to $89k.

How did you finance this deal?

Financed it through traditional loan as a 2nd home with 10% down.

How did you add value to the deal?

new appliances, new window, new deck, updated flooring throughout.

What was the outcome?

Goal was to rent as STR (like our other one). Covid hit just as we were ready to list on VRBO/Airbnb, so we were on hold. During that time, our housekeeper of first property needed a place to live and we negotiated a LTR on it at $1000/month.

Lessons learned? Challenges?

Never be scared to offer what is fair to you. I wanted to offer $100k which I thought could still be too low, but my son convinced me to go lower at $95k and we still got it even lower than that. You never know peoples motivation. Challenge is to have reserves (which we did and alternate exit strategies. We went LTR, but can also flip if needed.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Worked with a local agent to the community but we were one of his last deals before retirement.

A little over a year ago, I agreed with what Arlan stated.  I thought it was ridiculous what VRBO/Homeaway was charging and I knew I had a better way and was not about to pay these fees that I could keep myself.  Bought into Lodgify and set up my own booking platform, paid the one time fee and all profits come to me.  Advertised on Instagram & Facebook and waited for the reservations, money and NO fees to start rolling in.  ....and waited, and waited, and waited.

I booked 1 reservation through that platform (and it was someone in my home neighborhood that I verbally promoted it to).  I now agree with John Underwood.  We book 90%+ with VRBO, a few with Airbnb and I've sine scrapped Lodgify.  Have no issues with them.

We don't have to like or agree with these sites, but they bring me awesome business through their exposure.  I could list with a Mountain Management Property Listing company in our area that books for people and they want 30-40%.  I self manage and am willing to pay VRBO because I charge what I need to charge knowing what the fees are, so although I do understand what Collin says about "affecting my rents", the alternative is what?....nothing.  I'll take what I'm getting today (we have almost every day booked from June-Sept so far) and we make good money doing it.  

VRBO/Airbnb are vehicles you don't have to use, but I'll take them all day long!

We started in the STR business 2 years ago and have 2 properties. Ours are in Western NC (mountains vs ocean). I agree with everything others have said. I self manage 2 properties and hold a regular full time job. Great Housekeeper is our #1 reason this can happen. All done through apps, VRBO & Airbnb. Very simple. Our next one will be a LTR in a midsize city, but STRs are what got us started. Let me know if I can help answer anything else.

I'm in Raleigh as well and we have 2 STRs in Western NC,  Ours are in Mars Hill, NC (about 45 mins north of Asheville) in a community called Wolf Laurel.  Would love to connect and exchange ideas.  I would not recommend either of the agents we've used unfortunately.  We found deals on our own and still continue to look out there.  We were hit with the Mar/Apr slowdown, but Mid-May when they reopened, we are swamped busy.  Love the Boone area as my son went there for 1 year, but don't know a ton about real estate there although we were pursuing one in that area last year.

Message me if I can answer anything else.

Joe