All Forum Posts by: Mark Miles

 Pillows and towels and pillows and towels and pillows and towels and pillows and towels and pillows and towels and pillows and towels and pillows and towels and pillows and towels and pillows and towels and pillows and towels and pillows and towels and pillows and towels and pillows and towels

Man, we go through a lot of pillows and towels!

Glad to see they have whet your appetite for STR! The proper play here is to sell the duplex and take that money to buy something that will really earn you a lot of STR money down south. Search around to find my other posts, but if $26,000 in a YEAR seems like a lot of money, you ain't seen nothin yet.

As I've said 100 times on here, if you pick the right spot down south, a 3+ BR house can bring in anywhere from $100k-$250k per year. You can only invest every dollar once. Sell that duplex & buy an STR down south. When you own a few houses that each earn $26k in a MONTH not a year (like I do), you'll thank me!

@Luke Carl I’ll let you school him on the ENEMY method

Hey Vera! So, look, I'm gonna say this as nicely as possible and of course to each their own: you can only invest every dollar once, you should invest it where you can make the absolute highest return, and that is certainly not Northern Michigan. And that is also why I don't invest in or near my hometown either. Because the highest ROI is about 1000 miles away from me where I own a number of properties that make a ton of money

I tend to buy in the Southern half of the US for 3 reasons:

1) you get much higher year-round occupancy rates in the South & it’s simply tough to earn a good ROI in the North if your place sits vacant for a big chunk of the year

Slow season in the south is that 6-week period when occupancy drops to 50%. Slow season in the north is that 7-month period when no one books.

2) Culturally, the Southern half of the US seems to be a lot more accepting of STRs regulation-wise. A lot of these southern beach & mountain towns have been supporting STR for 75+ years, long before Airbnb was a thing, so they're very comfortable with it and it's a built-in part of the community.

3) The Southern half of the US is more forgiving if your property is out of service for a couple months (a flood, property damage, coronavirus) bc you earn year-round revenue. People in the north can get really screwed if, for example, their property is out of service during the peak summer season when they would typically earn all of their revenue

A lot of Northern places are FREAKING OUT over STRs & STR regulations & they don’t seem to be very supportive of it. So, in the North, best case you’re fighting an uphill battle with a lot of uncertainty. Worst case, it gets outlawed in a town AFTER you’ve bought a place there & now you have to sell at a HUGE loss bc there’s no buyer demand once STR use is banned! I’ve seen it happen...

Anyway, there’s some great resources on the internet that show the amazing numbers you can earn on STR down south. Once you see the STR data on these various southern towns, you’ll see that you simply can’t get annual revenue, annual occupancy rates, annual net income, & annual ROI like this in the north.

If you pick the right spot down south, a 3+ BR house can bring in anywhere from $100k-$250k per year. As I said, you can only invest every dollar once. I am fairly certain that Northern Michigan won’t pull in this kind of money...

You may have heard a lot recently in the news about the Southern strategy, it’s a strategy for winning a presidential election. Well I have a southern strategy too, it’s a strategy for making a ton of money & it goes like this: buy a bunch of vacation rentals down south & then you’ll make a lot of money

 Oof, I would totally ditch the local property manager. They sound like they’re living 20 years in the past.

Remember, STR Property managers are simply schedulers. Don't let a scheduler take your profits. Either self-manage like many on here do, or hire an inexpensive offshore PM who works US hours & speaks eloquent English (that's what I do). Mine can set door codes, message (or call) guests, schedule cleaners, adjust the thermostat, monitor my cameras, & call a plumber just as easily as a local PM can, for 1% of the cost

I wrote much more about leveraging offshore assistants in this post here. If you find it useful, feel free to upvote ;)

https://www.biggerpockets.com/...

Welcome to the party! Running a successful STR comes down to 3 Ps: pics, people & pricing.

1) Decorate your house nicely & pay a professional photographer to take some amazing pics

Also, be prepared to constantly reinvest some of your profits into your house in order to keep it in tiptop shape. I think a lot of new investors look at the allure of STR and see the big revenue numbers and forget how much damage your house and your furniture and your furnishings will take with guest after guest after guest staying in your house

If you let your house and the furniture and the furnishings fall into a state of decay, what originally started as a big moneymaker will instead become a constant source of guest complaints and bad reviews and headaches and sleepless nights (for you & your guests!) and refunds to guests

2) Hire amazing people - cleaners, handyman, recruit some neighbors to help fill in the gaps, & self-manage or hire an offshore VA to manage the property if you'd rather make yourself rich instead of making a local property manager rich (more on that here: https://www.biggerpockets.com/... )

And make sure that your cleaners and handyman are not only doing a top-notch job of keeping the house in pristine condition, but they are also reporting to you (or to your PM or to your offshore asst) every little thing that needs to be upgraded or replaced so that you can stay on top of it and take care of things before you hear it from your guests in the form of guest complaints and bad reviews. If your bath mats are getting nasty, you need to hear that from your cleaners not your guests!!

And keep your handyman on speed dial because there will be plenty of occasional electrical and plumbing and HVAC and hot tub issues, many of which will be minor but will still require your handyman to take a look. This business ain’t for the faint of heart!

3) Price fiercely to maximize profits not occupancy (they're not the same thing). If you set higher prices and rent fewer nights but make the same amount of money, you actually come out ahead. Less money spent on supplies, less wear and tear on your place, less money spent on utilities, fewer guest headaches, etc.

Bottom line: there’s a LOT of puzzle pieces you have to get right to make this work really well, but once you master it, it can be very rewarding

I preferred to invest in the year-round high revenue parts of the US where you can earn a lot of money year-round. I prefer that because it gives me a nice cushion so I always have extra profits to reinvest back into my houses as things need to be upgraded or repaired. Be careful if you’re considering an area with only seasonal revenues because you might be underestimating just how high your expenses can be in this business, I know I did before I started!!

Keep in mind that your expenses will occur year-round (whether your house is rented or not), so try to invest where you can earn lots of year-round income to offset those expenses (which is typically the southern US). Just my two cents based on my experience. Best of luck!

 

You can only invest every dollar once, important to invest it where you can earn the highest ROI. I don't care where you invest, I'm just here to share some facts.

Outside of July and August, the Poconos are pretty much weekend only at best. You can sometimes rent your place during the weekdays the other 10 months of the year but there isn’t much demand so the only way you can rent it is by cutting your prices pretty low. I know some people cut their weekday prices super low just to increase their occupancy rates during the other 10 months but you’re not really making much of a profit that way, you’re just increasing your headaches and increasing the wear and tear on your house.

Tough to cover your exorbitantly high property taxes & power bills & septic tank repairs (every time a kid flushes their shoe down your toilet) with super low occupancy & low nightly rates for 10 months of the year. I have some friends who invest in the Poconos because it is so close to where we live, They don’t earn nearly the ROI that I do investing down south where I get year-round occupancy at way higher prices.

Also there’s a bit of a gold rush going on in the Poconos since the pandemic started. Every house gets multiple offers, they go under contract within 3 days of being listed, and houses are selling for like double the amount they were selling for 6 months ago.

If you find something you like, better make an offer the day it hits the market and you better offer asking price or higher. Seems a bit ridiculous to me, I will stick with my southern properties that have way higher ROI, way higher nightly rates, way higher year-round occupancy rates, way lower property taxes and way lower power bills. And no headaches from wells and septic systems

Here’s a good thread on the challenges you’ll face in the Poconos:

https://www.biggerpockets.com/...

Messages are awesome but here’s something important that I’ve learned:

Only 1 person will read your messages (if they even read them at all) so if you have important info for all guests to know, put up signs and labels around the house 👍👍👍

I use MyEngravedSign.com though I’m sure there’s plenty of others you could use - professional looking signs at very reasonable prices. You’ll thank me later 😊

Congrats and welcome to the party! Running a successful STR comes down to 3 Ps: pics, people & pricing.

1) Decorate your house nicely & pay a professional photographer to take some amazing pics

Also, be prepared to constantly reinvest some of your profits into your house in order to keep it in tiptop shape. I think a lot of new investors look at the allure of STR and see the big revenue numbers and forget how much damage your house and your furniture and your furnishings will take with guest after guest after guest staying in your house

If you let your house and the furniture and the furnishings fall into a state of decay, what originally started as a big moneymaker will instead become a constant source of guest complaints and bad reviews and headaches and sleepless nights (for you & your guests!) and refunds to guests

2) Hire amazing people - cleaners, handyman, recruit some neighbors to help fill in the gaps, & self-manage or hire an offshore VA to manage the property if you'd rather make yourself rich instead of making a local property manager rich (more on that here: https://www.biggerpockets.com/... )

And make sure that your cleaners and handyman are not only doing a top-notch job of keeping the house in pristine condition, but they are also reporting to you (or to your PM or to your offshore asst) every little thing that needs to be upgraded or replaced so that you can stay on top of it and take care of things before you hear it from your guests in the form of guest complaints and bad reviews. If your bath mats are getting nasty, you need to hear that from your cleaners not your guests!!

And keep your handyman on speed dial because there will be plenty of occasional electrical and plumbing and HVAC and hot tub issues, many of which will be minor but will still require your handyman to take a look. This business ain’t for the faint of heart!

3) Price fiercely to maximize profits not occupancy (they're not the same thing). If you set higher prices and rent fewer nights but make the same amount of money, you actually come out ahead. Less money spent on supplies, less wear and tear on your place, less money spent on utilities, fewer guest headaches, etc.

Bottom line: there’s a LOT of puzzle pieces you have to get right to make this work really well, but once you master it, it can be very rewarding

I preferred to invest in the year-round high revenue parts of the US where you can earn a lot of money year-round. I prefer that because it gives me a nice cushion so I always have extra profits to reinvest back into my houses as things need to be upgraded or repaired. Be careful if you’re considering an area with only seasonal revenues because you might be underestimating just how high your expenses can be in this business, I know I did before I started!!

Keep in mind that your expenses will occur year-round (whether your house is rented or not), so try to invest where you can earn lots of year-round income to offset those expenses (which is typically the southern US, which you’re already doing). Just my two cents based on my experience. Best of luck!

 There are many things that will happen when you start cramming people in: not having enough bathrooms, running out of hot water after people shower, limited eating space, limited fridge space, having only 1 dishwasher, generating excessive amounts of trash beyond what your garbage cans can hold, people sharing beds with people they don’t want to share beds with (or sleeping on the floor). trust me, you don’t want these headaches because they will all come up via guest complaints and bad reviews. Limit your occupancy to a reasonable amount and let people actually enjoy your place! No need to be greedy here, you will thank us later!

P.s. A side effect of cramming people in is that you will attract college kids looking for a cheap place to party or otherwise poor quality of guests, you really don’t want to do this