All Forum Posts by: Ryan Moyer

As I understand it, it is going to be difficult for you to prove material participation when you have a W-2 job whether you're in state or not.

Isn't one of the requirements of material participation that you can't spend more time on something else?  IE you have to spend more time on the rental than your W-2 job, which seems unlikely.

Most people use material participation when they have a non-working spouse. Then the spouse can be the one that materially participates in the STR, but the depreciation can be used against the working spouse's W2.

Not a CPA, so I could have that all wrong.

I don't have mine in an LLC, nor do many others.

I'm not a lawyer, but I've heard from many that an LLC will do little to actually protect you here, especially the way 99% of people using them for real estate have them structured.

But what it WILL do is make everything a lot more complicated, and get you worse terms on your loans, etc.

It didn't seem worth all the extra effort/cost to me for something that likely won't actually help much if push comes to shove with litigation anyway.

 Every growth stock is down a ton over the last year.  ABNB is down less than AMZN or GOOGL.  This is just growth stocks re-adjusting to more realistic multiples after everyone foolishly thought Covid growth was going to last forever and way overbought growth stocks to unsustainable multiples.

Airbnb demand can absolutely be going up while the stock price is going down.  It's just such a bizarre statement to say they can't.  There are dozens of different ways a company's stock price can go down while its demand/revenue is up.  And it happens hundreds of times per year.

While it all just gets lumped into "STR" or "Airbnb" this is really more of an urban rentals thing, not a vacation rentals thing. And most of us here have vacation rentals, not Urban "Airbnb's".

It's definitely true that the hot new trend on social media the last few months has been to hate on Airbnb.  If you want to go viral, just find an Airbnb listing where the fees are a huge percentage of the total price, or where the host has some absurd check-out requirement.  But that doesn't really apply to most people here.  These posts are things like "$49 for the room night, $75 cleaning fee fee, I think I'll just stay in a hotel!" or "the fees are 2x the price of the room rate, no wonder everyone is going back to hotels!".  And yes, it's true, these posts get millions of likes and hundreds of thousands of shares so they're definitely being seen.

But these are people going to Houston for a night or two and comping Airbnb out to a hotel.  Not really our market here.  Though yes, I do agree, too much of a stain on the name "Airbnb" would hurt us since as much as we like to say just get bookings other ways, many of us to rely on Airbnb for a large percentage of our bookings.

And FWIW, I would not at all be surprised if a lot of it was hotel lobbying to drum up these social media trends.  But again, there's no hotel that can give people anything close to what my properties offer, so there's no sense in me worrying too much about a battle between $49/nt apartment rental arbitragers with Hilton.

They're pretty much in a lose/lose situation.  Hosts hate them because they think Airbnb is too guest friendly.  Guests hate them because they think they're too host friendly.

We all live in our little host bubble, always talking to other hosts.  But if you step out into a situation where it's a bunch of people that don't own any properties talking about Airbnb.  Holy cow, they think the platform exists for nothing more than to cater to the hosts every minute of every day.  It's eye opening.

I do think they overreact to social media trends.  99% of my guests are nothing like the wave of social media complaints with "chore lists" or "fees", yet that is what they choose to react to.  Oh well.

I agree that support has not been able to keep pace with the growth of the company.  I had a call yesterday that would have been hilarious had it not been so frustrating.  I was trying to put up a new listing and got some generic error message like "could not verify listing publication" or something.  I called in and the support guy was basically like "yeah I don't really know, I'm not like in the backend or anything I can just see the same stuff as you, so not really any way to troubleshoot it, good luck though!".

It was like I was talking to a friend that had used Airbnb a few times before, not an actual support person.

These people definitely exist.  I've seen some, hired some, but at least the ones I've seen/hired were specific to their local market.

I've never looked for a broader, nationwide one, but I'm sure they're out there.  And I'm sure there's someone offering this in Gulf Shores specifically.  It's just a matter of finding them.

Other options would be finding a full service co-host and negotiating something with them to take a smaller commission (or salary) to just handle that part of it.  I'd bet there are thousands of people out there willing to do it.

And another option, which you already mentioned, is a VA. You would have to train them though, and I'm sure there would be growing pains. But ultimately I bet you could make it work.

And FWIW, of course there are 3rd party property managers that will reply after hours.  I've got 15 unsolicited fliers sitting on my desk right now from PM companies that want to take over my properties and offer 24/7 guest communication and maintenance.

Bottom line, don't be discouraged, there are people out there that will do this.  It's not a typical thing so doubt many recommendations will come through and you'll have to find them.

It depends on the market.  You'll probably have to do some research on the market and see if you can pin down if the permit affects pricing in that market, because in some markets it absolutely does.

I'm sure you'll get people telling you these are residential homes, so their priced is based on what a similar home sells for and the permit doesn't factor into that.  And technically that may be true in principle, but is not always the case in practice.

In Hurricane UT where the waiting list for a permit is 10 years, a home may sell for 50% more if it has a permit.  The same exact home, right next door to each other.

Henderson, NV is another spot like this. One of the only legal STR areas outside of Las Vegas but permits are very limited. Maybe not 50% there, but easily 25%. In fact there was a home listed there recently where the listing was very clear that they were listing it at $150k over non-permitted comps and that the home would not appraise but was marked up because of the permit, and it received multiple offers and sold for over asking. That was just recently, not back when everything was getting multiple offers and selling over asking.

Not my intent to throw shade here, because Rob seems like a great guy, and I haven't seen his course, but he recently did his video where he shared his STR revenue and it was really underwhelming compared to what most hosts are doing on similar properties. You can also do the math pretty quickly compared w/ prior videos of his that shared his overall revenue and see that the VAST majority of his income comes from teaching, rather than doing.

He did $57k revenue last year on a 3br view cabin in Gatlinburg.  That's the lowest I've seen on a cabin like that and many hosts are doing $100k+ on similar properties.

His only property that he bought in the current market (after the boom) seems to be just bleeding money.  He didn't share the revenue on his $3M Scottsdale home he bought with David Green but he flipped through the calendar on the video and you could pause and do the math.  $12k-$15k monthly revenue on a $3M property (plus renovations) that probably has $30k+ in monthly expenses.  And that was in high season.  He underwrote that property for $450k+ gross revenue and he might not even hit $200k.

Again, I haven't seen the course so maybe what it provides is still really worth it. It's possible that his STR returns are poor (relative to what other people are getting on similar homes) because he puts so much time into the course (or the youtube vids). And maybe it's meant more as just a foundation as to how to logistically host an STR rather than how to do it really well. But it's just something worth considering that the person teaching how to host appears to pretty heavily underperform even average investors in the space other than the timing of being fortunate to buy a handful of homes right before the market blew up.

So you're saying Brandon's does $5k revenue per month?

I'm sure Brandon bought his place long ago at much lower prices and rates than are out there currently. I can't imagine that there's any STR-legal property for sale on Maui at current prices that would cash flow with $5k/month revenue, especially at current rates and with those big HOA fees.

I don't own anything there. I've heard from 3 separate investors in the area that 1br oceanfront condos are the sweet spot, and have done a lot of underwriting to try and make it work. Those condos are up around $1M - $1.2M to purchase now though. Occupancy rates are massive (up in the 90's) with nights rates getting as high as $400ish for the nicely renovated ones. You figure $330ish ADR for the whole year at that high occupancy and you're around $100k-$105k which is about what people are saying they get out of them. But again, at $1M+ purchase price with high rates and $800+/mo HOA fees and it's hard to make that pencil out. But on the plus side they'll probably keep appreciating in value forever as it's not like many more are being built.

The biggest problem with ski resort areas, especially western ski resort areas, is that there is limited supply and too many buyers that want to buy a home for themselves, and are willing to pay prices higher than would make sense as an investment.

Somewhere like Gatlinburg the prices are driven by investors.  Everyone buying there is buying to make money on STRs, so prices are mostly capped at the point where they would stop making sense as an investment.

But out in these western ski markets there are tons of people that just really want a house there for themselves, and they are willing to pay $4M for a property that only does $100k gross STR revenue that doesn't even cover the mortgage because for them, the STR revenue is just a bonus.