All Forum Posts by: Ryan Moyer

I'm not sure this will ever change, and I'm not sure beachfront will ever be a 10 cap again unless you're looking in a very undesirable STR area.

People have traditionally bought beach homes as true 2nd homes.  This limited prices somewhat as they had to stay reasonably priced enough that people could afford to pay an entire additional mortgage to have a family beachfront vacation home.

Now that the STR secret is out, it's more affordable than ever for people to own one as a 2nd home, even though the actual home prices are much higher. The people that used to look at having to pay $5000/mo to have a beach home see it as a great deal to be able to buy one now and "only" have to pay $1000 out of pocket each month after a PM rents it out for them. Or, if they can break even, "what a deal" in their mind.

It's the same problem in ski markets.  Very desirable true second homes are tough to make cash flowing investment properties.  Because investors might need that home to cost $1.2M in order to cashflow as a 10-cap, but there are too many people at that are willing to pay $1.8M and break even and have a true vacation home for their family that drive up the prices.

 There's no fundamental difference in any of these things when using a google voice number though.  If they call the google voice number, your phone rings.  If they text the google voice number, you get a text.

One nice little bonus to using google voice is you know when a call comes through google voice it's something you have to answer.  Like most I get tons of spam calls on my personal number and it got annoying having to answer every call (instead of screening calls I was pretty sure were spam) just in case it was a guest.  Now I know if it isn't coming through the google voice number, it's not a guest, and I don't have to answer.

Still an option, just less common and also more expensive than before.

The same reason we would all throw a hissy if our neighbor told us they were bulldozing their house and putting in a steel mill there.

People don't want commercial businesses that have the potential to be disruptive in the middle of their quiet residential neighborhoods.  And they're fine to think that.

Of course, zoning laws prevent your neighbor from building that steel mill. And in time, they will prevent you from operating that STR as well. They've just been slow to catch up to the STR changeover from someone crashing on your couch to full-on short-term rental only properties that are essentially a boutique hotel. But more and more areas are catching on and changing every day, and 50 years from now there's almost no chance you'll still be able to run an STR in a residential neighborhood anywhere.

Buy STRs in tourist areas where commercial STRs are expected and necessary.  Or chase the returns in a private neighborhood where businesses aren't supposed to operate.  The choice is yours, but no one is going to weep for you when that residential neighborhood that doesn't allow commercial use starts cracking down on people trying to use their property commercially.

Just use your cleaner. It's 2 minute application and a $25 application fee for them to register as a "local contact" with the county. 

They don't have to do anything different beyond their normal cleaning. Just need their name on that piece of paper. 

I own in Kanab and one thing you're going to have to pay mind to other than underwriting is the availability of cleaners and handymen.  You can maybe find someone based out of Panguitch but it would be worth calling a few and seeing if there's anyone even taking on new work there as, outside of that, you're looking at over an hour to the nearest decently sized city.

I never underwrote as far north as Hatch when I was looking but I swear there was a house for sale there recently that was used as an STR and they shared their STR revenue. I can't find it now but maybe try to find the listings for some of the recently listed homes and see if you come across it.

What is the source of this article?

Whatever it is, it doesn't seem to factor in home prices at all.  Yeah, rent in Jackson where you can do $7500/mo in gross rents!  On a property where you have to pay $15,000/mo on the mortgage alone.  What a deal.

I can't get any bookings there.  No idea why.  Properties are booking very well on Airbnb/VRBO, but several properties without so much as an inquiry on BDC.

Not even getting scam offers.  C'mon scammers, am I not good enough for you?!

I think there is a difference between merely "420 is okay" and what the OP is describing here.  Sounds like OP is wanting to go all-in with it, basically theme the whole place out with it (and provide exotic supplies) akin to the way some people do with Airbnb sex dungeons, where essentially the idea is people are seeking it out explicitly and you're ONLY catering to that crowd.  You're okay with families never staying there because you're planning on staying pretty booked with your specific guest avatar.

I suppose it could be worth a try, but I would think the main barrier would just be the avatar of renter you would need.  Without any intent to offend, as I've indulged plenty of times, the avatar of guest that would want an over the top in their face 420 themed place is less likely to be a wealthy crew.  That's not to say there aren't plenty of well to do people that enjoy partaking, but rather that they're less likely to want an over the top in your face place with it.

So for instance, a Colorado ski town where lots of college or just out of college aged kids like to go on ski trips something like this could definitely appeal to them, and there would be LOTS of that type of traveler.  But the problem is that kind of group is usually a very budget conscious group as well.  So even if you can keep occupancy high the ceiling on nightly rate may be limited in a 2-season market with very high home prices.

What market is your STR in?

Breaking even on an STR you have no mortgage on is a pretty poor return relative to what is available out there, even in the current market, especially given that you've got summer 2022 in there which was probably the hottest few months in STR history and may not be repeatable this summer.

As to your question about year 1 vs. future years that mostly has to do with startup costs, so you should be able to subtract that part out and see what to expect going forward. Other than that in a normal market you do generally expect rates/occupancy to increase as you get more reviews and get repeat guests, but that is somewhat canceled out by the notion that you had summer 2022 last year and we may not see that hot of a market again for a while (STR supply/demand really hit a tipping point around Sept 2022).