All Forum Posts by: Ryan Moyer

The reality is that this isn't people crashing on the couch while we're out of town anymore.  Most of us are running lodging businesses in areas that are zoned residential.  As long as you're doing that, there's always a risk, and 50 years from now it will probably be illegal everywhere to operate STRs in residential zoning, just like it's illegal to operate a steel mill there.  Every market in residential zoning has an expiration date, we just don't know what it is yet.

The obvious solution is to buy in already regulated areas with tourist/commercial zoning.

The returns are lower, but at least they can't go to zero overnight.

You're not wrong, but there is certainly some irony to several (4 out of 5?) of the "great photo" examples having calendars that are wiiiiiiide open, with barely a booking on them.

AirDNA only know whether a night is open or booked.  They don't know the source of the booking.  So whether it books on the hotel site or Airbnb, AirDNA will see it booked either way.

The only potential discrepancy is if they're listing it for a very different rate on the hotel site than on the Airbnb site.  So it's listed for $79 on the hotel site, and $189 on Airbnb, if it gets booked on the hotel site AirDNA will just use the Airbnb price of $189.

But most people have prices the same, or at least similarly close, across platforms.

The numbers don't make sense to me, based on their descriptions.

The most dubious is "First page search impression rate"

Airbnb defines it as the percentage of time your listing shows up in the top 10 results when a guest searches for a location/date.

I have 30 listings in a market with 20,000+ homes available, and they all have a "First page search impression rate" of 40-60%.  Nevermind the unlikelihood that any ONE of them is appearing in the top 10 that often (especially at the rate we're getting bookings, I know we're not showing up on the 1st page nearly that often), it's statistically impossible for 30 listings to show up in the top ten 50% of the time even if our 30 listings were the only ones in the entire market, instead of there being 20,000 other listings.

It makes no sense.  Some of these listings are dead on Airbnb, way down on page 17 on Rankbreeze etc (others doing much better).  Airbnb basically lists that metric as 40%+ for every single Airbnb property even though statistically it's only possible for most properties to show up in the top 10 well under 1% of the time.

How the hell can 20,000 properties in a single market all show up in the top ten 40% of the time?

Two factors at play here.

1) STRs generally appraise as residential homes, not as businesses based on multiples. In STR common markets like Gatlinburg this naturally adjusts itself as most homes are STRs so the entire market lifts to meet their cap rates, and they appraise on those cap rates in spirit, even if not technically. You don't have that action here so are left as an outlier, way above appraised value. Even if offering owner financing it's still tough for someone to risk $1M on a property that appraises for a small fraction of that.

With multiple units, maybe you could look at a commercial sale?  I'm not super familiar with the commercial side of things, are there commercial appraisals that can be done on multi-unit properties?

2) You net $85k....but since you bought in 1994 I assume that's with no mortage.  That $85k cash flow pretty quickly becomes $0 once you add a $1M mortgage to it at current rates.  So what's the incentive of the buyer to spend $200k+ cash just to break even on a property that is in a market with limited to no chance of appreciation?

Airbnb dynamic pricing has ruined the whole industry.

Airbnb's dynamic pricing isn't designed to get YOU a booking.  It's designed to get AIRBNB a booking.  Because Airbnb only makes money when the guest books on Airbnb.

Hence, they want the price to be cheapest on their platform, so people book on Airbnb instead of elsewhere, and want their properties to be able to compete with hotel prices (even after cleaning fee and service fees).  That means their pricing tool is designed to price beneath the rest of the market, which drags the entire market down, especially when combined with their algorithm changes a couple years ago that made pricing (IE lower prices) the #1 factor in ranking.

Even if you use an external pricing tool, it gets dragged down by the people using Airbnb's pricing.  But at least you have a chance, and aren't exacerbating the problem as much.

 Which kind of properties perform best there (size, amenities, etc)?  I have a bit of a soft spot for the area as a UF grad, and I still come back to the area every year or two.

 Disney can be a pretty crazy market.  A lot of people will pay $1200/nt for 4 crappy budget motel 6 quality rooms at the All-Star resort rather than $175/nt for an 8br themed out mansion with a private pool, theater, and $30,000 arcade room.

To answer your original question on investing over a long-term period, that is really this market's main strength.  Long term security.  There will always be demand in the market (it's not like some covid markets that could disappear as vacation destinations almost entirely over the next decade), and the regulation risk is as near to zero as you can get in this industry so long as you buy in the approved tourist zones (again, compared to some smaller/less mature markets where they could outlaw STRs tomorrow).

For short period cash flow there are better options.  For longer period security, tax advantages, and personal use it can be potentially be a good fit.

I have around 20 homes in this market, some themed and some unthemed, if you want some revenue numbers to use to run your metrics.  I think off-platform marketing is more important here than almost any other market.  You don't want the guests scrolling on Airbnb who see 2000 other decked out theme homes right next to yours listed in the $100-$200/nt range.  You want guests who you find elsewhere that see a decked out theme home and think it's the most unique thing ever, and don't know there are 5,000 others just like it charging less.

STR Hosts: I proactively dish out refunds like cookies to make sure I only get 5* reviews.

Also STR Hosts: Why are guests such entitled brats nowadays that demand a refund for every little tiny issue? It didn't used to be like that!

Will it match the statement amount up with the actual credit transaction for the bank account attached to Stessa?