All Forum Posts by: Michael Skinner

Nice post @AJ Wong! Your passion is definitely illuminated in your writing. I love your comparison against hotels, and that they do certain things for a reason, and that those things are what produce long-lasting success in their business model.

As a host, I've tried implementing "hotel quality" at all of our vacation homes but have encountered friction from those STR investors who don't understand the difference between being cheap and being frugal, much less see the value in great design, or the 'little things' that make a big difference. Great job articulating and thanks for sharing your holistic view!

@Alexander Franqui  is this OB area? If so PM me, I know a few good professional managers locally I can introduce you to. 

@Matthew Spiers in my experience, it tends to be a numbers game to the big-box companies, where they factor churn rate into their acquisition strategy. Hence the demeanor. It makes sense when you think about their overall biz strategy though.  

The issue with local managers is they won't follow you into other markets. They're often bulkier and more traditional, too, having been around for a long time so there tends to be a lack of agility when it comes to market or technological forces (i.e. change is hard).

Obviously there are tradeoffs to both... 

Which is why I applaud @Robin Simon for bringing up the franchise model because it's actually something we've actually been testing the past few months in an attempt to bridge the gap between between local and national brands. 

Similar to @Leslie Anne Morris, I got started with STRs with 1 purchase in Nashville and ended up starting a PM co as a natural byproduct. Now we're managing 35+ across 10+ cities in 4 different states. Suppose we're the type to take DIY to another level, though we still face some logistical challenges from both sides of the table.

But imagine if there was a solution that gave you the scalability and diversity of a national brand with the market expertise and rolodex of a local manager, all for a rate that's better than Evolve's! That's what we're trying to nail down, but it only really works for other DIYers who are all in on RE investing (vs. those who are dipping their toes as a side-hustle). 

Keep us updated with your journey! Would love to know if Vacasa ends up being a good solution for you.

Best,
~ Michael 

@Matt J. have you run the numbers on the two scenarios yet? If your goal is to maximize the productivity of your capital, it should be a pretty straightforward path to determining your answer. As @Jerry W. alludes to, $100k could go a long way elsewhere, and the only way you'll know if it makes sense to put it into this property for STR purposes is by understanding the various income scenarios and potential outcomes...

Here are some follow-up questions to consider: 

1. What's your estimated target CoC return? Is this the most important factor driving your investment decisions?

2. What investment alternatives are you considering, if any, with this $100k?  

3. Could you put a fraction of that $100k into the property, keep it LTR, and increase rent to achieve better or similar returns than STR?

4. Are you enjoying the day-to-day of running your current STR? With regard to time/attention needed for management, LTRs scale better/easier than STRs so you'll need to be prepared to increase communications and other operational responsibilities.

You said "chase the higher returns" so my assumption is that you've run the numbers and have a high level of confidence that STR would offer better returns. If that's the case, the question of location is moot. If, on the other hand, you're not sure about how location will impact top-line revenue as an STR, then I'd suggest running highly conservative scenarios (including a worst-case scenario) to help inform your decision.

Hope this helps! 

@Braeden Cobb - this is definitely needed, which is why you see companies like Vrolio and Revedy gaining traction. We offer a full-service solution like what your describing and I end up working with a lot of homeowners who are not real-estate savvy and are exploring STRs for the first time for one of many reasons.  

Consulting is one approach but we don't offer that because we give away information for free. The real value for the audience you're attempting to serve is not only the knowledge piece but also the time and network piece. 

The DIYers like to do things themself, which means they'd rather get free info and learn online than pay someone by the hour to learn. This is not your audience. In contrast, people who know they need help want a relationship with someone they can trust to execute their goals/vision. The knowledge piece is the cost of admission, but if you can save them time and decrease their stress level while introducing them to the right people, you may be onto something. 

@Trent Reeve makes a good point about positioning as a consultant. Have you thought about getting in with an existing company that's already doing these things? There are a bunch out there. If you want a few more ideas, send a pm. 

Hope this helps! 

~ Michael  

@Justin Osborne congrats on the new venture! Love the lessons learned.

What is your projected income for Y1? 

And pm if you're still having trouble sourcing contractors, I might be able to help with that.

Wishing you guys success!

@Tammy Skeath - Currently, I haven't found a pricing tool that has logic for "booking value", which is the key metric that drives our revenue management strategy. They might get there if more markets start to implement this kind of limitation through STR regulations but I don't anticipate it being a top priority for the software companies.

As for PMs, depends on what you're looking for in a company; for example local manager will offer a different kind of experience than a national manager... but of course there are tradeoffs with each. I started self-managing my own STR and then took on another and another until I ended up starting a management company because people kept asking for help with theirs. I'd be happy to give you pointers and best practices if you're looking to self manage but otherwise feel free to DM if you want to know what to look for in a good pm and how to go about searching, interviewing, and selecting one that's a good fit for you :)

@William Beck Definitely understand the sentiment here... Airbnb has captured a word in the mind of travelers and investors to the same extent that Kleenex is synonymous with tissues. This is purely a testament to the success of marketing and branding efforts. 

To your point, the regional difference is definitely at play. You'll notice Australia and European regions use the term "holiday homes" or "short term let" instead of vacation homes and short term rental. 

Personally, I take the approach of meeting people "where they're at" while recognizing that those using airbnb in place of vacation rental or STR is a reflection of their knowledge in this particular space. It's not a bad thing necessarily but gives me an idea of their experience so I can direct the conversation accordingly.

Because of the development in the space the last 5-7 years, many people's first exposure to vacation rentals is through Airbnb. In the end, however, I think it's a matter of semantics and with enough education around the topic, people can get a more well-rounded understanding of this very profitable investment class.

Hope this helps! 

@Tony Gregg and @Account Closed

I first rolled out StayFi at 2 properties as a test about this time last year. Now StayFi is installed in almost all 18 of our STRs. 

The system is great—a passive method for capturing guest data (legally and unobtrusively). And to deflect other privacy concerns about email marketing, you can also create an 'opt-in' box for guests. 

A few things to know about the StayFi portal: 

- Signage and Instructions: you need to create AMPLE signage and perhaps even make a quick video to help guests understand how to connect. We were stumbling over this in the beginning but now everything is smooth and guests "get it". The biggest lever is in the check-in messaging. 

- Airbnb Direct Connect: Airbnb has an in-app feature that allows your guests to connect directly to your wifi from the app if you put in the credentials. Some people like the convenience this offers but they won't be able to do that if you use StayFi because of how the portal works. 

- Smart Devices: Captive wifi tech is still in the dinosaur age when it comes to IoT. If you have smart speakers, TVs, thermostat, etc. that you want guests to be able to access, it probably won't work because of compatibility issues. Since they're not connecting directly to your network, they can't control things that are on your network. For example, we have a 5BR villa with embedded surround sound throughout the home and we want guests to be able to play Spotify from their phones directly to the speakers... in order to do this, they have to be connected to the wifi network (so this house does not use StayFi). I've mentioned this to StayFi before but no telling if it's on the road map.

Our email list grows on auto-pilot. Turning that data into revenue-generating activity is a whole other conversation though. Email marketing is a delicate dance but we've been able to maintain a 40-50% engagement rate with our guest list. 

Happy to answer other questions or even hop on a zoom to walk you through our setup if that'd be helpful—just shoot me a message. 

I haven't experimented with other captive tech so can't speak to those but honestly this one works so I don't see the need right now. They also just rolled out text marketing integration so you now have the option to capture that data point as well. (priced per text sent though, on top of the reg subscription) 

@Jacob Stevenson - doesn't look like grandfathering is relevant to you if this ordinance is the most current (this only applies when outlawing, banning, or updating restrictions).

The question I'd ask is if you already had (or currently have) an STR permit? Did you apply and obtain one when you first started a while ago, or rather you are looking to obtain one now? There's not enough information in your post to paint a clear picture of the laws you're trying to overcome.

I notice the mention of a local contact, which is also the case in various other cities. Is your new place close enough to where you can serve as the local contact? If not, maybe try asking a friend, cleaner, or local contractor to be "on call" for you and list his/her name on the permit (whether or not you get they get the complaint call or they get it is a separate matter because you could list specific number that routes to you e.g. google voice).  

Is the STR property in an HOA? If so, I'd check the CC&Rs for STR language and/or rental limitations.

Yes, as Nathan mentioned, calling the city/county planning department would be a great first step to get an understanding of what you're working with (and at the same time starting off a good relationship since they'll see you playing by the rules).

The ordinance also mentions reporting requirements which is typically done via an online portal on the city's website. On a similar note, you'll want to be aware of tax regulations and be sure you've got your ducks in a row in case of an audit. This basically means making sure your reservation data matches your tax data. Doesn't seem like it'd be a big issue in your area but better to start off with good habits. Not sure the specific city/county the home is in but here's an article for SD you may find helpful. 

Short answer to your question: yes, you can list the property on Airbnb or Vrbo or anywhere you want so long as you've got a permit and are abiding by the regulations for the jurisdiction. 

Not everyone follows the rules though, and cities have been slow to keep up. Most don't have the knowledge or resources to enforce. I've known people who chose to operate illegally and just bake the tentative fines into their contingency budget.

If you want to share the link to the ordinance or DM me the general locale of the property I could poke around and see what other info there is.

Congrats on the new house and best of luck!