All Forum Posts by: Mark S.

@Aaron Dubois I don’t believe you have a realistic perspective of what it would take to make this happen and what the financial implications are. You are talking about well over $1 million in startup costs, not including furnishing and initial holding costs. You are hoping to have a partner invest in the land and trust that an inexperienced operator can make it profitable.

Have you done any detailed research on land availability near Sedona, regulatory issues, builders for the type of property you are contemplating, conservative revenue forecasts based on actual comps, cost of a support network (cleaners, maintenance, etc), cost of utilities?

Not trying to be a buzz-kill but there is a lot to the STR business, it is challenging and not the ‘layup' it was briefly during COVID, and certainly not a quick income replacement scheme.

@John Semioli REI Hub. Switched from Stessa to REI Hub and love it, as do all the other owners I have referred there. (No vested interest, just a happy user)

@Brett Synicky Not a good idea in most situations. IRAs and RE each have their own tax benefits. Putting RE in an IRA effectively gives away the benefits of RE. Do both, but separately.

@Russell Brazil Or in markets that are traditionally vacation destinations.

@Natalia V. It is challenging to come up with revenue numbers given the fluctuations in the STR sector over the past four years and the vast increase in competition. So I suggest getting a ‘best guess' figure based on several sources (Airdna, Rabbu, STR Insights - don't rely on just one) and then build in some conservatism and see if you are still comfortable what your pro forma kicks out.

And yes, you can certainly have two objectives if they align in some ways. But deciding which is most important to you will help in determining the return you are willing to accept.

@Natalia V. Are you looking for an investment or a retirement home? Two different objectives. And if you can’t develop potential revenue numbers with some level of confidence, you are taking a big risk (or leap of faith) in buying any property. That is a fundamental part of real estate investing.

@Natalia V. Don't do it!! Buying something that you would even consider skipping essentials like insurance or hoping for appreciation just to try to make your numbers work is a terrible idea. There are people all across the country who have jumped on the STR bandwagon hoping to make money and are now wishing they had never done it. Determine what your financial expectations are for an investment property, run your numbers very conservatively (and for gosh sake, include room for unexpected costs, even on a new build) and then see if it makes sense.

And be care of taking advice from someone who has something to gain from you.

@Joe Kern The nightly charge and cleaning fee, as well as any other charges you add, are all lumped into revenue. Don't matter that they are called something else. And you pay the cleaner, the guest doesn't. Too many STR owners get hung up on the idea that cleaning fees are a ‘pass thru' to the guest. They aren't - they are a cost you incur and how you elect to determine what to charge the guest is a separate thing.

@Mark Jajowka It is getting difficult to place insurance if the building has an older roof. That is a major source of casualty losses. For example, I own a property with a roof that is absolutely fine but 20 years old and I cannot find another company to take it until the roof is replaced. 

@David Pike For what it’s worth, I was on a call this evening with a very experienced real estate investment company who stated they don’t expect any material reduction in interest rates for extended time period.  Based on their long-term track record, I would think their opinion is as good as any and better than most. So if this company is correct and Ashcroft is banking on refinancing at lower rates in the next year or two, that may be an iffy proposition.