All Forum Posts by: Ryan Moyer

VRBO fees and taxes are charged on all revenue including the host fees, so it's not a way to "get around" any of that.

Those are usually fixed costs (cleaning fee, etc) that don't scale with length of stay which can make staying at an STR (particularly on VRBO which tend to be larger places on average) difficult for a very short stay. Just the nature of the business and not having the scalability of hundreds of small rooms with $7/hr cleaners that can blast through them like a hotel has.

 Unfortunately no easy answer here as this is going to be highly dependent on average length of stay and seasonality of the market.

For instance in a beach market that does primarily week-long stays in the summer to generate its revenue and is mostly empty other than that, there may only be 12-15 cleans all year and hence it's going to be a very small percentage.

Whereas in a year-round market of a smaller home where you get lots of shorter bookings to fill out the calendar, it could represent a much larger percentage.

One thing you can do is look at ADR and Occupancy percentage.  That should come out lower than total revenue since it is not factoring in cleaning fees, though I believe you get much more generalized data on ADR and can't drill down as much.

This is less and issue of a husband/wife needing extra space from each other and more having or losing the ability to let the kids or another couple have the other room.

I am sympathetic to your plight, as I understand it can really hurt to build a reliance on something and then have that taken away.

However, I don't really see a way out of this.  It sounds like, in an absolutely best case scenario, you're trying to violate the spirit of the law on a technicality.

It seems pretty obvious that the spirit of the law here is that they don't want people operating commercial hospitality businesses in residential neighborhoods, but want to find a balance where they can still allow actual residents to rent out a room or their space on occasion when on vacation, etc. With 90% occupancy, it's pretty clear that you're running an STR business in practice. Whether you sleep in another home you own or your car is really immaterial to that, other than creating a technicality by which you're hoping to be able to claim the home as a primary residence so you can run a business in a non-commercially zoned district.

Even if you are able to prove the technicality and get by on it for a renewal, that won't be a long-term solution as they'll just update the law to more clearly define these limits which they probably previously assumed to be rather obvious. It's unfortunately, but it will be this way everywhere eventually. If you're renting out a property 90% of the time that is a business. The same as a steel mill or a hotel or a car wash. It's taken municipalities a while to catch up since "STR" used to mean renting out your couch occasionally, but eventually all of these STR businesses will be required to be in commercial/tourist zones the same way every other business has to be.

UPDATE:  Well, interesting timing, as there was just a big win in Austin in ruling that STRs couldn't be restricted to require owner-occupied, so maybe there is hope.

I wish I had an answer.  There are tons of STRs out there with these things so there must be someone out there willing to underwrite it.  Heck we were just looking at staying at a place in Texas that had 2 full size waterslides (like the kind you'd find at an actual water park).

I hope you can find someone.  Certainly preferable to just demo'ing all the fun stuff!

Evolve isn't really a property manager.  They're more of a booking agent (and a poor one at that).  They handle the listings, getting the bookings, etc.  That still leaves you to take care of the maintenance, the guest communication, the cleanings, the 2am clogged toilets, etc.

If you're worried about being afar, Evolve only handles the very easiest part about being afar.

Realistically though, all of it is completely doable remotely.  The vast majority of people here manage their properties remotely.  Heck, it was so doable to manage my own that I started a property management company in a city 2000 miles away from where I live.

The tricky thing about it is that "property manager" is not an official term for STR. It's just what most of us call it. But in the actual bylaws in many states, STR hosts are not considered "property managers".

It varies state by state of course, but in many cases people see the part in the law where "property management" requires a broker's license, but don't look at the part where stays under X number of average days are not considered "property management".

Florida is a big one I see people get confused on all the time. If the average stay is under 30 days it is considered "public lodging". If it's over that then it's considered "property management". "Property management" requires a broker's license, while "public lodging" requires a hotel license. Many people end up thinking STR property management in Florida requires a broker's license because conversationally we call them "property managers". But legally they're not property managers, they're "public lodging".

Great job!  Will be interested to hear how it rents, but I'm guessing it's going to do great.

I did a HELOC on an investment property with TD Bank, but that was probably 8 months ago so not sure if they're still offering it. It was right around the time that Penfed stopped offering theirs.

They were absolutely horrible to work with, but it eventually got done.

I'm having some trouble with the math here.  How does "at least break even, maybe make up to 2-3k profit monthly in some months" on 7 homes equal out to 500k in annual profit?

Other than that, I don't see any issue with swapping equity from a boring home to a lakefront one if the interest rate isn't going to notably impact your returns.  The lakefront properties will almost certainly appreciate better over the long term.