All Forum Posts by: Julie McCoy

What @Justin Anderson said.  First thing is you need to find out how big your septic capacity can be.  Everything else will follow from that.  :) 

@Jake Cohen I'm looking for a new product, the software is not as flexible as I'd like and it has not kept up well as platforms have changed their APIs (for example, it will no longer import VRBO reservations, and while it's added native messaging to AirBNB, it will send the door code info the second a reservation is confirmed, which I loathe because a) it's not the first contact I want guests to have with me, and b) guests forget it by the time their reservation rolls around and STILL message me asking for their door code).  I've also had trouble integrating a new lock that doesn't have the same check-in/out times as my other properties.  

I'm on boarding a new property soon and am going to try the Schlage Encode with that one... we'll see how it does!

@Philip Cook Maybe select one unit to experiment with and see what happens - give yourself a reasonable, pre-designated period of time (3 months?  6 months?) to gauge your success by.  Your risk factor appears to be cost of furnishings and the potential of lost long-term rent by not leasing the apartment immediately - though ideally of course the AirBNB model will yield significantly more than a lease would.  :)

I would recommend that you give some thought to the demographic likely to travel through your town - as @Paul Sandhu pointed out, if there's a certain volume of industrial contractors passing through to work on a nearby factory or refinery, that's a niche market that can be extremely profitable.  See if you can identify what type of traveler is most likely to be looking for a short term rental near you, and work on targeting that market.

Hi @Raj Kaushal - my main question is what do you mean by "net revenue"? STR numbers can get a little fuzzy sometimes because of the way expenses are layered, so that's what I want to be sure I understand. However, I will assume you mean gross rents (gross revenue - cleaning fees - any occupancy taxes you collect).

If that is the case, 35-40k very achievable in the TN Smokies IF you can get a decent property around $300k, which these days is tough to do, unfortunately.  

Re: cash flow, that is extremely subjective to the individual investor, particularly the financing terms.  You've gotten some good insight on this thread!

hahaha happy birthday @Luke Carl!  You da man!  Here's to raising heck for the next 40!

I host a LOT of honeymooners and anniversary celebrations, etc. so while I don't know for sure, odds suggest there have been conceptions at my cabins!  LOL

@Greg Moore While @Paul Sandhu has a lot to teach (and a lot of just plain great stories) his model/target demographic is not the same as yours - by a long shot :) 

I think you named the two biggest general STR risks (though a pandemic is something that wouldn't have made anybody's list a year or so ago!).

@Thomas Ackley's answer was perfect, LOL - a lot of these risks can be mitigated by choosing a really good market that has favorable legislation and local economics/resources baked in.  

I'm honestly having a hard time coming up with any significant risks in the Smokies... there's always the small risks that come along with any business, and never any guarantees in life, etc. but the good news is most of it you can prepare for.  Have good insurance, have reserves, have a plan for if something goes wrong (HVAC went out?  Water heater went out?  Bug problem?  Know who to call).  

Sometimes stuff is going to happen that you aren't going to be able to help - a couple of Christmases ago I couldn't do anything about the guests who decided my cookware was too scratched for them to use on Christmas Day.  They just had to suck it up and wait for things to open again.  But in the Smokies, at least, there's lots of resources.  If something like that happened again (as long as it wasn't on Christmas Day) I'd have Instacart deliver new cookware.  There's seldom going to be an issue where a little resourcefulness can't fix it - even long-distance.  

Ultimately, I think the most important things are to have reserves (this got me through the shutdown without me so much as breaking a sweat financially, even though it was generally a very stressful time!), have an attitude of resourcefulness, and don't sweat the small stuff.  

@Anand S. This market has been growing year-over-year by 8-10% in terms of tourism for the last several years running.  While I agree that Covid may have provided an extra boost for 2020, it's far from an isolated event, it's part of a longer trend.  There is no "bubble" to burst, it will merely level out once prices hit a point where returns are not greatly outpacing other markets.  

@Daniel Green That property definitely caught my eye when it was listed, because of the amount of upside there.  The listing stated one side of the duplex was empty and the other occupied by a tenant.  The two studios were overnight rentals.  

IMO the tenant needs to go ASAP and all the units need some cometic freshening up. Add hot tubs. Do all that with some attentive management and you can do mid-100s easy between the four of them, more is definitely possible. Total potential for home-run ROI, it's just going to take some up-front investment and effort.

No doubt it takes patience to invest here right now, and @David Haley has been very patient! However the returns are still great, and market saturation of properties is unlikely due to the ever-growing demand and the geographic limitations on expansion in the area.  We'll run out of good building sites before we run out of demand for properties to put there, at the rate things have been going for the last fifty years.