All Forum Posts by: Ryan Moyer

Two factors at play here.

1) STRs generally appraise as residential homes, not as businesses based on multiples. In STR common markets like Gatlinburg this naturally adjusts itself as most homes are STRs so the entire market lifts to meet their cap rates, and they appraise on those cap rates in spirit, even if not technically. You don't have that action here so are left as an outlier, way above appraised value. Even if offering owner financing it's still tough for someone to risk $1M on a property that appraises for a small fraction of that.

With multiple units, maybe you could look at a commercial sale?  I'm not super familiar with the commercial side of things, are there commercial appraisals that can be done on multi-unit properties?

2) You net $85k....but since you bought in 1994 I assume that's with no mortage.  That $85k cash flow pretty quickly becomes $0 once you add a $1M mortgage to it at current rates.  So what's the incentive of the buyer to spend $200k+ cash just to break even on a property that is in a market with limited to no chance of appreciation?

Airbnb dynamic pricing has ruined the whole industry.

Airbnb's dynamic pricing isn't designed to get YOU a booking.  It's designed to get AIRBNB a booking.  Because Airbnb only makes money when the guest books on Airbnb.

Hence, they want the price to be cheapest on their platform, so people book on Airbnb instead of elsewhere, and want their properties to be able to compete with hotel prices (even after cleaning fee and service fees).  That means their pricing tool is designed to price beneath the rest of the market, which drags the entire market down, especially when combined with their algorithm changes a couple years ago that made pricing (IE lower prices) the #1 factor in ranking.

Even if you use an external pricing tool, it gets dragged down by the people using Airbnb's pricing.  But at least you have a chance, and aren't exacerbating the problem as much.

 Which kind of properties perform best there (size, amenities, etc)?  I have a bit of a soft spot for the area as a UF grad, and I still come back to the area every year or two.

 Disney can be a pretty crazy market.  A lot of people will pay $1200/nt for 4 crappy budget motel 6 quality rooms at the All-Star resort rather than $175/nt for an 8br themed out mansion with a private pool, theater, and $30,000 arcade room.

To answer your original question on investing over a long-term period, that is really this market's main strength.  Long term security.  There will always be demand in the market (it's not like some covid markets that could disappear as vacation destinations almost entirely over the next decade), and the regulation risk is as near to zero as you can get in this industry so long as you buy in the approved tourist zones (again, compared to some smaller/less mature markets where they could outlaw STRs tomorrow).

For short period cash flow there are better options.  For longer period security, tax advantages, and personal use it can be potentially be a good fit.

I have around 20 homes in this market, some themed and some unthemed, if you want some revenue numbers to use to run your metrics.  I think off-platform marketing is more important here than almost any other market.  You don't want the guests scrolling on Airbnb who see 2000 other decked out theme homes right next to yours listed in the $100-$200/nt range.  You want guests who you find elsewhere that see a decked out theme home and think it's the most unique thing ever, and don't know there are 5,000 others just like it charging less.

STR Hosts: I proactively dish out refunds like cookies to make sure I only get 5* reviews.

Also STR Hosts: Why are guests such entitled brats nowadays that demand a refund for every little tiny issue? It didn't used to be like that!

Will it match the statement amount up with the actual credit transaction for the bank account attached to Stessa?

This is the first I've heard of this.  Like the others said, I don't see how VRBO would even know you had a direct booking, or what would make them think they're privy to commission on a booking they didn't secure.

It's $558 and anyone saying otherwise is wrong :P

I own a property in the Disney market and co-host/manage another 25 in the area.

Disney I think is a good market if your goals are more aligned with traditional long term real estate goals, and a bad market if your goals are more immediate gratification and short term cash flow.

The major benefit of the Disney market is that it's about the safest market you can find from a long-term perspective. If you buy in the proper STR areas there is practically zero regulation risk. It is my personal opinion that 50 years from now STR in residential zones will be illegal in 100% of the country. STRs in their current form are simply big hotels, and legislation has been slow to catch up because in their original form they were more conducive to residence (someone crashing on your couch for $39/night).

When in that 50 year span a particular market will catch up and require hotel/tourist zoning for STRs is a coinflip, but in the Disney market it's already done. The STR neighborhoods here are built specifically for STR. The houses are not meant to be lived in full time. They don't even have mailboxes. To run an STR here you get a hotel license. They are already treated as hotels, there isn't really any risk of being regulated out.

Additionally, from a demand perspective Orlando is built around tourism.  20 years from now people will still be going there for Disney/Universal/Seaworld etc.  A lot of other markets 20 years from now could be ghost towns with little demand.

But on the flipside, that safety/security comes with lessor immediate returns, as is a normal balance with investments (more risk traditionally equals more short term gain potential).  If you're buying a place turnkey you're unlikely to be able cash flow positive or even break even, especially if you're paying a manager (although management fees are the lowest in the country here due to all of the competition).  There is just too much competition.

If you're willing to invest heavily into theming you can force cashflow, but even that is going to be tight unless you really hit it out of the park with your theming.  Because again, there are lots of people that are theming, competition is VERY high here.  A 99th percentile property in a different market is a 70th percentile home here.  To be 99th percentile you need a Bowling Alley AND a laser tag arena INSIDE the house.

So it comes down to goals.  Are you looking from a more traditional real estate perspective where you're trying to acquire an asset for long term preservation of wealth, tax advantages, to have guests help out with the mortgage payemnts, potentially have rents and home value increase in time with normal inflation, and are okay with the idea of paying some amount out of the pocket some (most?) months out of the year?  Then the Disney area may be a good fit.

But if you watched some youtube channel with someone, who seems to get a deceitfully large percentage of their info from selling courses, preaching the dream of massive upfront cashflow that you can then leverage into another down payment next year and so on while exponentially increasing your wealth so you can quit your job and live on the beach in Aruba, Disney is the wrong market for you unless you're willing to invest substantially into super tippy top end theming.

The good news if you're in the former camp is that prices have come down quite a bit here compared to most of the country with all of the saturation/competion.  Not quite to pre-covid levels but homes that were $550k pre-covid can be had in the high $600's now, down from a peak of around $900k.  So unlike markets like 30A and the like where prices have remained rather steady despite the returns being extremely poor at current home prices, I think we've probably already hit the bottom (or at least near it) on home values.

 Fox News is anti-Desantis?