All Forum Posts by: Ryan Moyer

It sounds like you have a pretty good handle on things in this market. 

There is definitely a market for people that just want a nice home here, and don't want to stay in a themed place.  But it's a smaller market than people that do want the themed homes, and there is a large supply of those homes available.  They're building really nice homes with really nice countertops and nice furnishings by the thousands.

Something like this would be a pretty standout living room in most markets.  But here, it is pretty standard on every new house that goes up as they build them as fast as they can.

So yes, I do think major "standard" renovations (IE floors and counters etc rather than theming) will bring you more revenue than you're getting currently, but not as much of an increase as you'd see if you did the same thing in a different market, and probably not enough to justify the cost purely from an ROI standpoint. But if personal use and getting to stay in the house and all those nice upgrades is worth it you then it may still be worth it. No one can really answer that part of the equation other than you.

I'm up in Ogden and have looked at these markets.

When I underwrote it, the numbers didn't work well in St George.  Also be careful there, in many of the areas you have to use the city's preferred property manager (you can't self manage), which is going to be 30% of your revenue and demolish any hope of returns, so double check that on the property you're looking at.

On the flipside, St George is an awesome place and people love going there, so if you have goals outside of cashflow like appreciation or personal use it could be good to get a hold of something there.

Mesquite is interesting, we've been looking there as well. People basically go there to play golf when it's too cold up here. Less competition there for sure. My main concern would be that it may end up being a bit of a covid market, where visitation was higher than usual the last couple years with people just looking for somewhere safe to drive to when they couldn't fly, which increased STR returns in the area temporarily and drove up prices a bit. So now that people can go back to Hawaii and Europe and all that jazz, is Mesquite going to be on their radar. So probably better returns in the short term, but the question is will the market really drop off there in the near future?

 I cringe every time I hear these.  The most useless thing anyone ever says in this business.

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.