All Forum Posts by: Ryan Moyer

Quote from @Kyle Wheeler:

What stands out most to me is how a small drop in visitor numbers creates a large drop in occupancy. That's the nonlinear risk in STR investing that doesn't get enough attention.

It's absolutely insane to me how few investors understand these dynamics.

Even here on this very forum in 2021-2022, when I was arguing that this future was likely, there were SOOOO many people that were equating a 5-10% drop in visitors to a 5-10% drop in cashflow and saying it wouldn't be a big deal because they could give up that amount of cash flow.

Quote from @Dan H.:

Quote from @Ryan Moyer:

Quote from @Dan H.:

My highest occupancy STR has 6 nights of vacancy until the end of August. 2 of those nights are single nights so may not book. The other 4 nights will almost certainly book. So 2 nights vacancy over the next 2.5 months, >$400/day average rent for this period (not including OTA or cleaning fees). This is my best performing, but does show what is possible.

https://www.airbnb.com/rooms/743466187461028591?adults=1&...

Good luck

 It's all relative though.  I'm assuming you probably got into that property at a lower price/rate than current values, because I would think that is a $1M+ property and at $1M with 8% interest $400/nt isn't going to cut it even at 100% occupancy.

 It is 2 units.   That is the higher occupancy unit but the other unit’s rent is similar.   Its adr is less due to lower occupancy in the high season.

In addition, I suspect using your numbers 14.5% rent (not including cleaning and OTA fees) to purchase ratio ($144,800 rent for $1m) for the year would do great.

This property was purchased Dec 2021 for $1.2m (this was $150k below appraised value).   I did value adds.  It is likely near $2.1m today.   Rents (not including cleaning) will likely fall between $160k and $180k which seem low for value but reasonable for price paid. the two units together are ~1300’ so sustained maintenance and cap ex are small.  

value add had cost of ~$120k (one unit light rehab other unit extensive rehab).   So $1.45m for $2.1m valuation so $650k equity gain above costs.  

Rents $160k (using lower end or my expected rent range), piti $79,584, so $80,416 to cover expenses not included in the piti. 

It seems like the numbers have worked out fine.

By the way the other property I purchased in Dec 2021 has over $1m of equity over cost.  When I purchased it there was large negative cash flow (rent was $6.2k/month).   Rent now is just over $200k/year, piti $113.7k/year.   Also seems to be doing alright.

I agree that since q2 2022, RE is more challenging. This is nationwide as the rates have increased everywhere. In Florida the insurance/HOA has also increased substantially. I would do either of those Dec 2021 purchases at today's rates, but granted my piti numbers would be much higher and therefore my cash flow would be much less. Note I would still have the equity gains. I suspect I would have very modest positive cash flow (I have not run the numbers).

Good luck

So long and short of it though, at current prices for a new investor coming in if they were to buy your place from you they'd be looking at a $2.1M purchase versus $160k gross rents. Yes it was a great bargain when you bought it before STR became super mainstream but that is true of all STRs.

Compare that to my property in Florida is only slightly off in gross rents at $145k, but if I were to put it on the market it would sell in the $700k-$800k range.

Now, unlike most around here, I don't have any particular love for Florida nor any particular disdain for California.  I actually quite like California and would love to own there, and certainly wish I owned your house at pre-covid pricing compared to mine if I could go back in time.  

But you can see for an investor walking into the market NOW and looking at $160k gross on a $2.1M purchase versus $145k gross on a $750k purchase and there's just no comparison, even with insurance factored in.

Quote from @Collin Hays:

Quote from @Ryan Moyer:

Quote from @Collin Hays:

Quote from @Ryan Moyer:

Quote from @Collin Hays:

I’m living this nightmare now.  We had one home listed on Airbnb at the homeowner’s request. Then they sold the house and I had to cancel all reservations. Now Airbnb wants to fine me cancellation fees for all if that.  Been fighting for days now. 

This is my concern as well.  At least when people sell the home they may have a large influx of cash to cover the penalties.  But as a PM if an owner drops us or sells their home how is that going to work?  We get all the penalties and no cash to cover it.

Of course now we build it into our contracts that the owner has to cover those fees, but we have legacy homes where the contracts were signed before these host penalties exist so obviously nothing about it in those contracts.  Now one of those owners is listing their home and we have $100k+ of future reservations on the books that would amount to probably around $20,000+ in cancelation penalties.

I think Airbnb/VRBO really need to come out with an official and very public policy about how this affects PM's, otherwise it seems like they could be quietly making an entire industry that they rely on (property management) unfeasible, because as managers the properties are under our account, but we don't fully control them.

And that's just the fines.  If they de-prioritize the account in search results because of the cancelations, that could potentially tank the listings of all the other owners using the same PM.

It's a mess.

Airbnb sticks it to PMs - and homeowners - every chance they get.  I’ll close shop if I ever have to use them - it wouldn’t work. 

 True enough and I agree, though in this case we're actually talking about policies where VRBO is even worse towards PMs and homeowners.

Remember, the host cancelation penalties were VRBO's idea before Airbnb.  And they remain the one who are more strict about them and lenient in forgiveness of them.

 Never had an issue with VRBO in this regard. 

Sure but that doesn't mean the policies don't exist, just because you haven't run into a scenario where those policies needed to be enforced.

I'm all for piling on to Airbnb hate as much as anyone, but it just seems a little silly to use an anti-host policy that VRBO invented, and that VRBO is more strict with, to criticize Airbnb as anti-host.

Anti-host cancelation penalties only exist because VRBO invented them, not Airbnb.  VRBO's punishments are more harsh (they suspend the listing for 7 days on first offense, Airbnb does not), and VRBO is less lenient in waiving them (Airbnb will waive them on sale of home at least for now, VRBO will not).

Airbnb is no friend of hosts but VRBO is not much better these days.  VRBO has taken note that the best way to improve revenue and please shareholders is to appease guests at the expense of hosts.  Host cancelations were a real legitimate problem for guests that probably needed something to be done, but VRBO damaged the industry (for hosts) by making their first move a massive overcorrection in the opposite direction.

Quote from @Collin Hays:

Quote from @Ryan Moyer:

Quote from @Collin Hays:

I’m living this nightmare now.  We had one home listed on Airbnb at the homeowner’s request. Then they sold the house and I had to cancel all reservations. Now Airbnb wants to fine me cancellation fees for all if that.  Been fighting for days now. 

This is my concern as well.  At least when people sell the home they may have a large influx of cash to cover the penalties.  But as a PM if an owner drops us or sells their home how is that going to work?  We get all the penalties and no cash to cover it.

Of course now we build it into our contracts that the owner has to cover those fees, but we have legacy homes where the contracts were signed before these host penalties exist so obviously nothing about it in those contracts.  Now one of those owners is listing their home and we have $100k+ of future reservations on the books that would amount to probably around $20,000+ in cancelation penalties.

I think Airbnb/VRBO really need to come out with an official and very public policy about how this affects PM's, otherwise it seems like they could be quietly making an entire industry that they rely on (property management) unfeasible, because as managers the properties are under our account, but we don't fully control them.

And that's just the fines.  If they de-prioritize the account in search results because of the cancelations, that could potentially tank the listings of all the other owners using the same PM.

It's a mess.

Airbnb sticks it to PMs - and homeowners - every chance they get.  I’ll close shop if I ever have to use them - it wouldn’t work. 

 True enough and I agree, though in this case we're actually talking about policies where VRBO is even worse towards PMs and homeowners.

Remember, the host cancelation penalties were VRBO's idea before Airbnb.  And they remain the one who are more strict about them and lenient in forgiveness of them.

Quote from @Nathan Watson:

@Josh Havekost, any updates on your situation or experience with Home Team Vacation Rentals? I have been exploring them and other groups like The Short Term Shop to get started in STR investing.

Would you mind providing a full breakdown of HTVR's fee structure for potential investors like myself considering them vs other groups? You mentioned 20k finder's fee (is this for each property sourced or a one time fee for their program/etc), 10% maintenance fee on gross income, $18/SF design fee. Is there a separate furnishing fee or any other fees/charges you experienced? 

For anyone else, have you experienced a similar pricing structure when setting up STRs apart from HTVR? Or, do you simply work with a realtor comfortable/familiar with STRs to source deals in your desired market, let the seller pay the realtor's 6% fee, find a designer to do design/furnishing, then decide between self managing vs hiring property management and paying the associated fees? 

I don't mind paying someone for value if it saves a significant amount of time and work. However - people love to buy, but they hate to feel sold. If you feel like you are being nickled and dimed every step of the way, there may be a reason you feel this way. Then again, purchasing a true "turnkey" property means you are typically paying a higher premium in exchange for someone else delivering you a cash flowing, low maintenance asset.

I would gander to guess that 99% of people do it the latter way you described.  They find the deal, hire their own designer, etc.

The reality is that it's expensive either way.  $18/SF actually seems pretty reasonable if they're talking about both adding Airbnbable amenities and outfitting the property as an STR.

Because even just outfitting it as an STR is more expensive than you'll prepare yourself for.  I don't know how many pillows or towels or sheets you think you need, but even if you're trying to hilariously over predict the number, you're probably guessing too low.  A well stocked kitchen, carbon monoxide detectors, fire extinguishers, etc.  That's always my least favorite part of taking on a new managed property is going through what is needed with the owner, because it's always expensive and they're always under-equipped.

After the initial setup it's the same.  I think it's impossible to operate an STR without feeling nickel and dimed, even if you're self managing and nickel and diming yourself, just because there are so many expenses that you would never consider before you actually did it.  That's more true now than ever before as Airbnb has further and further stripped hosts of their ability to reasonably recoup costs from bad guests without sabatoging your own business.  3rd party damage insurance like Waivo or Safely is a must these days but that's yet another cost that feels like nickel and diming.

It's just the reality of the business.  People just didn't care as much pre-2023 when everyone was rolling in money.  And setup costs didn't hurt as much when you were cash flowing $8k/month right out of the gate because you knew you'd recoup it fast.  It's a different ballgame now with returns depressed, but the reality of the business hasn't changed and there's not really any way to skip over that part without damaging your future returns by more than you're saving up front.

Quote from @AJ Wong:

Quote from @Ryan Moyer:

"One is an oceanview estate on acreage with a remarkable architectural styling on the north coast projected to produce $230K+ at at asking price of $1.8Mish and another in house listing on the north coast asking $1.649M that should yield $180K+/- in gross annual income. The final prospect is a $2M+/- direct water access estate on the southern OR Coast that projects well at $180K+ in gross annual income."

These are terrible numbers, especially at current interest rates.

I know little about them but it seems like all marketing fluff.  Floral prose to pretend like wholly average or even below average income/price ratios are some kind of special.  The Peter Lik of property management.

Terrible? The majority of our investors are seeking a long term second home that covers costs and even these could be double digit COC returns if structured properly. They are the only ones that are eligible, I didn't say they were the most lucrative. If you don't know about them - research before commenting.

If the owner's goal is to have a second home that subsidizes some of the mortgage part-time, then sure—that might be fine. But if we're talking about STR investing from a return-on-capital standpoint, the numbers aren't compelling.

$180k gross on a $2M purchase isn’t just “middling”—it’s frankly poor. You don’t need standout marketing to generate that. Bill Faeth, for example, grossed $500k in his first year on a similarly priced home. That’s what “great at marketing” actually looks like.

If the claim is that Wander excels at marketing themselves to prospective owners, rather than marketing their properties to prospective guests, I’d agree. That’s where the Peter Lik / Monster Cable analogy fits—positioning average returns as premium experiences to people who might not know better.  

I also looked into owner reports across Reddit and other forums, and there aren't many but they generally say the same thing: increased expenses, lower-than-expected bookings, and high upfront investment just to meet Wander’s standards.

Their Trustpilot page is also worth examining—27 reviews, all from one-month span, all from brand-new accounts with no other reviews. That’s not a coincidence. Combined with the fact that they’ve removed their Google reviews presence and now control all visible guest feedback on their own website (other than the obviously faked Trustpilot push they gave up on), it gives off a tightly managed PR strategy rather than organic transparency.

I’m not saying they can’t deliver a good guest experience—but from an owner/investor lens, there are multiple red flags worth serious due diligence. The math, the marketing, and the lack of organic third-party validation just don’t align with the kind of performance being sold here.

"One is an oceanview estate on acreage with a remarkable architectural styling on the north coast projected to produce $230K+ at at asking price of $1.8Mish and another in house listing on the north coast asking $1.649M that should yield $180K+/- in gross annual income. The final prospect is a $2M+/- direct water access estate on the southern OR Coast that projects well at $180K+ in gross annual income."

These are terrible numbers, especially at current interest rates.

I know little about them but it seems like all marketing fluff.  Floral prose to pretend like wholly average or even below average income/price ratios are some kind of special.  The Peter Lik of property management.

Quote from @John Underwood:

Quote from @Dan Ikon:

World Cup is huge - it's even bigger than Olympics, and Miami is one of the host cities.

I was involved in accommodation rentals in previous cups - in Moscow, and before that in Germany. What's important - the demand for STR went up well before the first kick and stayed high for a whole Summer.

Why should Miami be different? Do we anticipate a spike in STR demand (and profit)? Is now a time to move in STR acquisitions? I'm kinda surprised none is discussing it.

 If you have a place then you should take advantage of this. I wouldn't buy a place just for this as this will just be a flash in the pan.

And it may not even get the flash anymore because with the STR secret long made mainstream by now, what happens with these compression events is that all the locals leave town so they can put their place up for rent and it floods the market with insane supply that way outpaces demand and kills the premium rates that used to be driven by a supply shortage.

We saw this recently for the NFL Draft and Super Bowl. STR owners were salivating and they were a huge disappointment. One of our Orlando clients lives in Green Bay and asked us to create a listing for their Green Bay house for the draft. But everyone had the same idea and it ended up being a huge bust because the whole town was available on Airbnb.

Quote from @Collin Hays:

Some people are actively seeking out losses to "help with their taxes."  

 The area the OP is referring to is actually one of the worst areas to buy for tax purposes because the majority of the home value is in the land, which can't be depreciated.

That's not to say it isn't helpful in making their decision, but if taxes were priority #1 they would be buying in an area where the house vs. land value is more slanted to the home, the opposite of 30A.

The most likely thing is that they are very wealthy people buying them as true vacation homes, and the rents merely subsidize the mortgage when they're not using the home themselves.

I think the easy answer is that some people buy vacation homes as actual vacation homes, not cash flowing rental investments.

Even before short term rentals became main stream there were thousands of people buying homes for personal use, and just letting them sit empty for 340 days of the year.

So if people can use them for the 25 days or whatever they want, and rent them the other 340 days to subsizide the mortgage then that is even more appealing.

In short, no one is buying in those areas for cash flow.