All Forum Posts by: Ryan Moyer

I live 45 minutes from Park City and vacation there 3+ times per year and I don't invest there. If I were to make a list of "Markets to have the highest likelihood of negative cashflow in 2023" or "Markets where you're most likely to have your STR banned due to regulation in 2023" Park City would probably be near the top of those lists. So for it to end up on a "best markets for STR in 2023" list to me shows either an extreme lack of knowledge of STR in the area or someone pushing an agenda (like a Park City realtor trying to convince people to buy with them there). While this forum is LITTERED with the latter, it doesn't appear to be the case here.

What it does appear to be is simple reputation management, putting a bunch of big posts out there to appear as a general subject matter expert so when someone is looking for a lender they see them as reputable. Which is totally fine.....IF YOU'RE ACTUALLY PROVIDING HELPFUL INFO.

In this case, the info just appears to be a hodgepodge of random markets with random tourism website quotes alongside some quick broad AirDNA metrics pasted in that don't really mean much in a vacuum. Again, that wouldn't so bad except that, at least given the market that I'm familiar with on the list, it's not only not helpful, it can actually be harmful. And directing people to Park City as a "top market" is harmful to the people who listen to it. Because it's only a very specific kind of buyer (particularly someone who likes to vacation there and doesn't really care too much about returns) that the area makes sense for.

We see all these posts on this forum about whether the STR market has taken a big downturn or not, and the prevailing theme we see in the answers to those threads is that the only people struggling are the ones who were stupid enough to buy a bad deal in a bad market at the peak. The thing that grinds my gears about those replies is that, while the buyer certainly deserves some of the blame for putting too much trust in people, it's posts like these and many of the people that post on these forums that pushed people into those deals in the first place. This forum has a bad habit of preying on people that don't know any better and then blaming them for listening to them in the first place.

I dunno, I've had this post sitting here for like 24 hours not sure if I want to even post it or not, and if it's too brash. But I think that is needed at this point. I'm just tired of people being fake helpful on this forum to try and drive business. If you want to be REAL helpful to drive business then great, I'm all for that. 

Oof.

This is my place: https://www.airbnb.com/rooms/52612233

When we bought it, it was completely unthemed, but furnished.  

Managing about a dozen properties in the area (and owning one) I would say one thing that I think relates to your question before I get into the costs.  If you're working with a budget it's going to go a lot further in terms of your returns if you get a place already furnished and then just throw out what you don't need or what you end up theming, rather than starting with nothing a spending a fortune on stuff that's not going to matter very much to your bottom line.

In other markets and with other approaches, design of regular every day items can really matter and help a place stand out. Here, if you're going with the theming approach, that theming is all people are going to care about.

To put it another way, if people are deciding between a bowling alley or a golf simulator or a $10k arcade machine or a theater or an X-Wing, the dresser in the 8th bedroom or the coffee table in the 3rd living space aren't going to drive their decision.  But these houses are huge and furnishing them out is very expensive.  I've seen people in the area buy new construction unfurnished and spend $100k+ just to furnish them.  You are going to get a WAY better return on that $100k by buying an already furnished place and spending $100k on awesome theming.

Now, with that out of the way, regarding our place and our experience/costs theming it...

We didn't hire a "do it all" themer/designer.  We kind of planned it ourselves and hired subs.  It was a massive headache dealing with some of them, though we did save money in the end.

Garage Arcade - We hired someone to drywall in the garage door, build a closet around the water heater, paint, and lay carpet.  Hired someone else to do the electrical and help us source the arcade games.  Total cost was around $20k.

Star Wars room - This was the spot we hired a designer for, though it was just for this room and not the whole house.  We told her generally what we wanted (X-wing vs. Tie Fighter with a bridge connecting them) and let her run with it.  This is an oversized 10x20 room.  Cost was $18k.

Princess room - I actually designed this one myself.  The bed I was actually able to find, and then we did the room around it.  The wall is just wallpaper we got off etsy, and Disney princess fathead stickers.  We hired someone to assemble the bed, hired someone to put up the wallpaper, hired someone to run the LED lights and hang the chandelier.  Total cost was a little over $3k.

We spent another $14k having someone fill out the rest of the house including the Toddler clubhouse under the stairs, the "lightly" themed rooms like Toy Story and 101 Dalmations, and just general decor and furniture that wasn't already in place.  We could have done this for much less ourselves, but at the time we were very busy and just didn't have the time to do it ourselves.

So all-in after we added coffee bar, kitchen item, etc (the place was managed by Vacasa before we bought it so it was very lacking in things an STR needs) we were around $60k, not counting a few repairs we had to do on the driveway/pool/etc.

Had we hired a do-it-all designer and not had to manage the subs ourselves it would have been a LOT less of a headache, but probably would've hit $100k easily.  Were the home unfurnished when we started, at least $150k.

If you really want to go all out I've seen designers in the $300k range do homes that make mine look like a piece of junk.  I manage one of these, and it's an awesome place.  Those are unfortunately getting more and more common now as the barometer of what constitutes a super property continues to rise.  3 years ago I'd have said my property was 98th percentile in the area.  Now I'd put it around 75th percentile.

You're going to want to consult a cpa for a final answer, but my non-cpa and unofficial understanding is that this would be very difficult. Most people that want to make their losses active sepf manage for the year they want to do that.

It doesn't hurt to ask.  It's also worth noting to them how different Airbnb's rating system is compared to most, and make sure to note that Airbnb may de-list/ban any properties whose rating score drops below 4.5.  In their head they'll likely think to themselves that some cobwebs (that you've vowed to take care of going forward) don't mean the property should be banned from the platform, and consider deleting it.

Haha love it.  What even is this article.  They list the places and then in the description of the places they list why their metrics are  not real, lol.

Seems like a big swing and a miss is that they're including non-STRable properties into the median home price calculations.  One of many problems.  But just funny to see them make fun of their own inaccurate metrics in their own article.

1. Crestview, FL

Median home list price in August: $725,000
Annual mortgage payment: $56,687
Annual revenue potential: $147,997
Potential annual profit: $91,310

For newcomers, the challenge is finding the right opportunity, says Mandy Reigart, a real estate agent with Realty ONE Group in Destin

“If I could find properties for $725,000 that would net $91,000 a year, I would be the busiest agent in the area,” she says.

Sucks for us, but host cancelations are clearly a big problem people are running into.  I'm in a bunch of Disney groups and any time someone mentions staying offsite at an Airbnb there are a bunch of people that comment they had an Airbnb host cancel on them and leave them hanging, or know someone that had that happen, and how they would never stay in one.

I think you still have a window to cancel after an instant booking for "don't feel comfortable" and then after that window you have to have a valid reason.

Turn-key with a management company?  Cash flow will likely be zero.

The STR secret is out. If you want good cashflow you need to be looking at value-add and/or self-management.

There are still places out there where I'm sure you can cashflow with turn-key and a PM, but it's not going to be a big return.

You didn't answer the real question most of us have. Why is your name Katelyn Tarr but you signed it Elizabeth Sickles but your LLC is Elizabeth Moara? How many names do you have?

Honestly we were screwed long before that.

The fed lost its way.  They allowed political pressures to dictate what was supposed to be acting as an apolitical entity into violating its mandate.

The feds mandate involves inflation and unemployment.  It does not involve the stock market.  Yet they dictated policy from 2018-2021 based solely on the stock market, at the expense of inflation.

In 2018 the fed cut rates as was necessary.  They had already been too low for too long.  The stock market dropped 28% over the course of half a year, they got tons of pushback from politicians who cared only about how things made them look and not the long-term health of the economy, and they were strong-armed into stupidly slashing rates again in 2019 even though inflation and unemployment were perfectly healthy, just to make the stock market look good as an election approached.  

Then covid hit, the market tanked again, and the fed once again put the markets first.  Only this time, because they foolishly already had rates extremely low for no real reason, they didn't even have that tool to work with.  So we got UNLIMITED QE.  The promise to literally print unlimited money to prop up markets on top of an already overheated economy.  And people act shocked that inflation was the result.  Slash rates to near zero for no reason, print unlimited money, gee where is this inflation coming from? 

This is why I've posted probably a dozen times in this forum over the last 18 months that the fed is going to keep rates higher for WAY longer than people are expecting.  Many people were expecting them to start cutting rates again months ago.  A year ago, for some people.  Crazy.  The fed learned their lesson from 2019 and 2020, and if anything they have a tendency to overreact to past mistakes.

And it's been working.  The US is way ahead of the rest of the western world in curbing inflation, yet home prices haven't collapsed.  The markets, with political forces acting appropriately this time and letting the fed act on their own accord instead of panicking, have had a decent recovery.  There's no reason for them to start cutting rates any time soon.  And they won't until absolutely necessary this time.