All Forum Posts by: Kyle Wise

Quote from @Erica Calella:

 Thank you for the response! What about these houses make them a bad investment? My home is in the middle of the woods too, but it has a million dollar view that helps boost bookings. I often wonder if the remote location (20 minutes up the mountain) is a turnoff and travelers are starting to prefer motel-like accommodations that are close to the main highways.

Houses in the middle of the woods with no view, houses that are non-cabin style like they belong in a normal major city suburb, no game room, no deck to take in the view, no hot tub, no area for a fire pit, no room for extra activities like corn hole or throwing the football, poor driveway, steep entrance, tons of stairs etc. All those things that you would take into account if you we're looking to stay in the mountains. 

Location matters too like you mentioned above, no one wants to drive along a remote winding road for 30 mins to get to a major attraction. As mentioned, I'm being very specific but those are the properties that I found do really well. The problem is, you might only see a few properties a year that pop up on the market that meet those criteria. Thus why I mentioned earlier, I'd recommend focusing more on finding that unique property versus trying to time the market because what happens if you wait until spring but then there is no good inventory available? 

Hi @Erica Calella, I also own an STR in the Western NC market so I'm familiar with the area.

My thoughts are, it's property dependent if spring 2025 will be a good time to buy or not. What I mean by that is, I don't think there is a lot of good quality STR inventory in Western NC and I think that's why a lot of people are struggling. They bought houses in the middle of the woods thinking they we're good investments and now they can't fill up their calendars. So will more inventory hit the market in 2025, probably, but the key is, is it quality STR inventory hitting the market.

Like @Collin Hays said, if the right property at the right price comes on the market, now is always the best time because you might wait a year or more to find a similar deal. 

Me personally, I've been looking to add another STR for the past 6 months but I've only seen maybe a few houses that will work. I'm more focused on trying to find that unique property that I know will be successful in any economy versus trying to time the market.

@Collin Hays Million dollar question is, when will we see the bottom? 

If you're really comparing the return of STRs to the market then you have to take everything into consideration i.e note paydown, leveraged appreciation, tax benefits, and cash flow. I also like to add the 5th for "happiness return" because what equity can you go and use for a week with the family? 

Adding all those wealth creators together your overall return is far greater than investing in the market unless you're the world's greatest trader. 

Quote from @Trent Reeve:

Quote from @James Carlson:

Quote from @Kyle Wise:

@James Carlson totally agree with you but there is another major reason to stay on the OTAs .....  so every time you take a listing direct from Airbnb or VRBO it makes your property look less desirable which drops you down in the search rankings. 

 I think this is interesting ... but not sure I'm following. Do you mean that direct links to your Airbnb listed on outside websites dings you in the Airbnb algorithm? 

I've never heard that. It would make sense that Airbnb and VRBO want to disincentivize outside bookings. I'd just never heard they had a mechanism for doing so.

 its not the links that ding you, its then the calendar blocked for that booking. but the same could be said for blocking from a VRBO booking. they want all your bookings on their platform because that is how they make their money.

Correct, if Airbnb sees your calendar is blocked with something other than a booking on their platform it will drop you in the search rankings. Thus the reason why most people are much more successful on one platform versus another because as your booked rate increases so does your search ranking on that platform and then it continues to fuel itself. 

I'm not necessarily sure it has anything to do with them wanting all the bookings on their platform. I mean I'm sure the organization does but that's not how the algo was built. The algo was built to push the best properties at the best rate to the front of the line because they want to put the best product out there. How does it do that? Well it looks at your booking rate so if your booked rate is high and your calendar is filled with them then they deem you as having a highly desirable property. 

The initial point I was making is, if your calendar is blocked the algo has no way of knowing if it's a personal stay, direct booking, or a stay on another platform. It only knows you're not booked with them and you're not available so you must not be a top tier property. If you get enough of those blocks you'll never appear past page three and find yourself dropping rates to get visibility.

@James Carlson totally agree with you but there is another major reason to stay on the OTAs that you forgot to mention. It has to do with the algorithms associated with these sites so every time you take a listing direct from Airbnb or VRBO it makes your property look less desirable which drops you down in the search rankings. This as a result, will cause you to drop your prices to get back on the first page and at that point, the money you made from the 10% direct bookings will seem negligible. 

Obviously everyone's situation is unique but I think most people underestimate how much in incremental earnings you can make if you figure out how to get the algorithm working in your favor. 

Quote from @Andrew Steffens:

Quote from @Kyle Wise:

Quote from @Andrew Steffens:

I am working with a client right now on a $750k purchase with a 15% investor loan netting $3-5k in net profits and a 30%+ CoC return (Tampa Gulf Beaches). Self managing first year for cost seg purposes then getting a PM and doing it again next year is the plan. Not all are that high, but it is definitely possible. I think you likely have enough knowledge now, and if you need clarification find it here. I would find an expert agent or PM in a solid market and take it from there. Good luck!

@Andrew Steffens I live in Tampa and look at properties all day and am pretty skeptical you're seeing a 30% cocr return with these rates. Not saying it isn't possible but you've truly found a diamond in the rough with a 30% cocr especially as insurance premiums are going through the roof here. 

 Shoot me your email I send you one I am typing an offer up for a client now.

PS They are using a 10% second home loan, so it is leveraged.  Straight cash on cash 12-15% typical, can go as high as 20%.

 @Andrew Steffens Ok, sent you a dm

Quote from @Andrew Steffens:

I am working with a client right now on a $750k purchase with a 15% investor loan netting $3-5k in net profits and a 30%+ CoC return (Tampa Gulf Beaches). Self managing first year for cost seg purposes then getting a PM and doing it again next year is the plan. Not all are that high, but it is definitely possible. I think you likely have enough knowledge now, and if you need clarification find it here. I would find an expert agent or PM in a solid market and take it from there. Good luck!

@Andrew Steffens I live in Tampa and look at properties all day and am pretty skeptical you're seeing a 30% cocr return with these rates. Not saying it isn't possible but you've truly found a diamond in the rough with a 30% cocr especially as insurance premiums are going through the roof here. 

Quote from @Jeff Chisum:

90% of my clients are using the 10% down second home occupancy loan to buy in the STR asset class in all 50 states. I have unicorn opportunity that has Lowe rates and fees than Fannie.

 @Jeff Chisum, do you mind sending me a DM with those details? 

@Joel Oh how do you access that tab?