All Forum Posts by: Ryan Moyer

Isn't Rodanthe the most scary spot of all?  There are 5br beach homes available there for outrageously low prices like $600k-$800k because in 5 years they'll probably no longer exist, swallowed by the sea.

Disney has always been at the forefront of inclusion, diversity, hope.  That is essentially their brand.  It's not anything new.  The people complaining about it now are the same type that complained about Disney movies with girls as the lead 50 years ago.  They just have a louder megaphone now, with social media rather than the Thanksgiving dinner table.

But that group has always existed, and they've never been Disney's target demographic.  They weren't going to Disney anyway.

Disney is an area that blew up during post-covid revenge travel, and has settled back some as that temporary travel trend recedes.  Disney tourism is down basically the same amount as tourism for the entire state of Florida.  The areas that blew up the most out of Covid are the ones seeing the largest pullbacks now.  It's not two posts down from this one that this same exact thread exists about the pullback in travel in the Smoky Mountains.  

It's no different in Disney or the Smokies or the Emerald Coast or Gulf Shores a dozen other markets that were very strong coming out of Covid.  Temporary travel boom led to huge increases in supply, and as that temporary boom normalizes we're left with top/standout properties that still perform very well, and average homes lost in the shuffle of huge supply alongside normalizing demand.  It's the most basic principle of supply and demand.

Being in this business requires sorting through a lot of fluff.  I'm sorry, but this is fluff.  Here on the ground, the only actual feedback or cancelations we've gotten are actually the opposite with some bookings being lost to Hispanic travelers that are afraid of the governor's immigration policies (actual guest message), but even those I'm sure are barely a rounding error and mostly fluff in the grand scheme of things.

So you have a bunch of markets acting basically exactly the same.  Smokies, Disney, Miami, Gulf Shores, etc.  But one of them happens to not align with people politically so they point at that one and say "See, I told you so!  It's because they don't agree with my politics!".  People just can't help themselves.  But it's fluff.  If you're worried about Disney itself I wouldn't be.  When people get tired of the stuff they have they'll throw another $5 billion at something new.  Visitors are down a bit from peak revenge travel, but still way up overall. The wait for 7 dwarves mine train right now is 120 minutes and the extra cost lightning lanes are sold out for the day. 

They'll eventually have to give back some of the price increases they jacked up 100% during overwhelming covid demand, and things will level out.  Which will probably start after the next earnings report.

So shed no tears for Disney, they'll be fine. The bigger concern is the 40,000 vacation rental properties there alongside the hundreds of massive hotels. If you want to do STR here you've gotta be prepared to stand out. There is just too much supply to be average here, which some people were able to skate by on during the post-covid travel explosion in the area. But ask the person buying an average 3br home in Destin with no pool for $1M or an average 3br forested cherry cabin in Gatlinburg with no view for $800k right now how they're doing and they'll say the same. And last I checked, neither the ocean nor the mountains and streams of Tennessee implied any stance about anything.

Just my $0.02, as someone hosting and elbow deep in this market every day.  Take it for what it's worth, and at the end of the day make your own decisions.  Because the biggest mistake anyone makes in investing is listening to people like me or any of the rest of us on the internet too closely.

I think returns there are better than most Beach markets. But that comes at the expense of being on an ever shifting barrier island. There are homes there that used to be 100 yards from the water and are now swallowed by the sea, so it's important to do your due diligence on the risk of certain areas of the constantly changing Beach. 

 No, Safely/Waivo are on a per booking basis, and would be purchased by the property manager.

Waivo I believe offers ONLY damage protection and is no help with liability.  Safely offers damage protection and (for an additional cost) liability as well, the covers ONLY the booking the policy was purchased for.  

With Safely you would pay, for instance, $70 per booking and Safely would cover you for damage and liability (again, check with them directly on this, I am not associated with the company so I can't say for sure they do liability!) for that booking.  They then set it up so each booking is automatically charged $70 so each booking is covered.

If you're getting lots of bookings it's likely far more expensive than traditional liability insurance for your LLC that is paid on an annual basis. But again, the problem is finding someone to write liability insurance for an STR property manager right now.

Unfortunately this is an extremely difficult area right now. There were only a handful of nationwide insurance companies willing to rate liability insurance on STR management, and almost none (none?) will do it anymore.

Definitely be careful, as most nationwide brokers will incorrectly rate you for traditional property management insurance, which almost always applies to LTRs and specifically excludes STRs in the fine print.  I would say 9 out of every 10 I talked to didn't realize this and were happy to sign me up for a policy that wouldn't cover what I very explicitly described to them.  The other 1 out of 10 understood, told me there were no options, and then went on a rant about how most insurance brokers don't really know what they're doing and just care about making the sale.

In most cases you have to find a small local company/agent for this kind of coverage.  But in many cases they will just ending up routing you back through a broker which brings you back to the above scenario, so you've really gotta pick and choose well.

Keep in mind that if you do find one, there will be things you need to do on your end such as specific signage, obtaining certificate of insurance from any vendors you work with (cleaners, handyman, pool guy), etc.

Safely I believe also includes liability as an option in addition to their usual damage protection at an extra cost, though in that case you're paying on a per booking basis rather than a yearly fee, and it's likely going to be quite a bit more expensive.  The advantage to this is you don't have to worry about your vendors keeping up with their licensing/insurance as much as Safely doesn't care about that.

Customizations -> Seasonal & Minimum Prices -> Custom Seasonal Profile

Then you just enter a date range and fill out the fields for min/max/base prices, and it will overwrite the amount you put in those fields globally for any date ranges you include in the seasonal profile.

From the perspective of the STR market, it is like most markets right now. The high end properties are doing well, the average places are struggling. Maybe even moreso than most places, just because there are SO MANY average places here if you're not standing out then you're competing with 30,000 rentals on pricing.

As far as Disney itself, the solution is simple, dropping prices, which I think they'll do after this next earnings report (depends on when the earnings report covers, as April was still packed at Disney).

They just have to re-adjust their pricing approach as travel normalizes a bit with the covid boom wearing off.  The Covid boom was INSANE here, with them doubling ticket prices and on-site hotel prices, starting to charge for things that used to be free (fast pass/genie), etc.  And after that there was STILL so much demand that they had to implement the reservations system because the biggest problem was that even at the jacked up prices, the parks were still overcrowded.

They literally couldn't charge enough money to keep the crowds down.

That is finally starting to return to normal.  They're already ditching the reservation system, and they'll likely start rolling back pricing some too in order to once again find that magic number in the middle to maximize revenue.

Appreciate you sharing actual numbers, that's awesome!

What would these cabins sell for on the open market today?  Just doing some browsing on Zillow, for instance, that first property as a 4br cabin with a view would be $1M or above, no?  Possibly upwards of $1.5M compared to some of the comps currently listed (though not sure if those ones are actually selling).

Of course $117k gross looks a lot different on a $525k mortgage at 3% than it does on a $1M-$1.5M mortgage at 7%.

Anecdotally, I've found VRBO to be very momentum driven.  I have similar properties in a similar area to each other and some get tons of bookings on VRBO and others have never had one.  Once a property picks up a few and it goes well, it tends to stick for a while.

 I think they're saying 43k of net profit before factoring in the mortgage, which will then put them well into the red.