All Forum Posts by: Ryan Moyer

I don't think Bill has any on 30A.  He has several in Gulf Shores.  Of course his property also ranks #1 on Airbnb in that area so his returns are better than most.

I thought you self managed?

What does that PM charge and what is their role?

Either that PM is charging more on the front-end to make up for not having to charge for things like that, or they don't value their time and they are going to burn themselves out.  Or you've found yourself a unicorn and I hope you buy them one hell of a Christmas present every year!

The 1% rule is more of a LTR rental rule, if you're talking about monthly rental income vs. PP. I would be shooting for higher for an STR as operating expenses are significantly higher.

 Yes we still have our place in Kanab.  It definitely has slowed down as I predicted above as the post-covid travel boom has worn off in the area (Zion was a big drive-to destination when flying was difficult).  We still cash flow nicely every month but our mortgage is 500k at 2.75% and the same home right now would probably cost 800k at 7% so the numbers would likely be much more difficult at current prices/rates.

Instacart is so much more reliable than Walmart+.  I have subscriptions to both but W+ could not have a worse design if they tried.  Too many frustrations to type out right now because I don't want to get riled up before bed, lol.

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!