All Forum Posts by: Sofia Sharkey

@Timothy Lou it’s very hard to provide a ballpark without the specifics. Also, this really depends on the management company you hire. Do they offer dynamic pricing that maximizes your profits or will they just accept most bookings as they come to keep calendars filled. Here are my suggestions:

1. Call that reputable management company and ask them to send you comps for the area you want to buy. They should be able to tell you how much on average your future property will make. Then you can run your numbers

2. It will be more upfront work than LTR but, if you hire full house management, they can help do 90% of the work and still make your numbers work

3. Checkout my profile to see an article I posted on how to vet STR management companies, what questions to ask, etc to make sure you go with someone who knows what's they're doing

4. A well established full house management will do at least the following: guest communication, house inspections to check cleaning and that nothing is missing, claim support IF there are issues, guest screening and "party prevention", restocking of supplies, coordination for maintenance, safety and security of the house, work with you on city regulations, dynamic pricing, manage the listing online, cleaning management, monthly reports there is a lot ... but there are great STR management companies out there providing a ton of value.

@April Clark while this sounds like a nice plan in theory, I’d adjust the following to make sure you can carry it out to reality.

1. It’s a numbers game. Depending on the purchase price and the projected returns, you can decide how much to put into the furnishings for instance. For $250K PP and 10K furnishings I assume you’re looking at a one bedroom. What’s the return on one bedrooms in the area? If that math meets your goals, great. If not, you’ll need to adjust. I don’t trust Airdna numbers because in my area it’s inaccurate, make sure you’re doing your own or checking other sources so you get a realistic picture.

2. Be mindful of city regulations. I’m not familiar with your market but I know that STRs can be heavily regulated and only allowed in specific areas, account for that.

3. Management will be easy for one property, but this is far from passive if you are doing things yourself. A lot of the software for STRs that is super helpful is worth after 4 properties or so. In the beginning you may not need it because a goal of software is to keep everything in one place but with one E property there is little room to streamline.

It’s great that you have a refined idea and equity that can help you get started. Good luck!

@Luke J Nelsen while Airbnb’s security deposit is a joke, they are working on fixing that. I was talking with an account manager last week who mentioned they are looking for a solution that allows them to charge guests automatically if a claim is submitted by the host. I don’t know the ETA on when that will be available to the public but it will definitely make guests more and accountable for damages and automate the process for hosts. So while this is not a solution right now, it’s nice to know they are working on a fix to be implemented soon.

Good luck with your cabin!

@Benjamin Enriquez the coin operated washer and dryer are for the entire plex located in the bottom floor. There is no washer & dryer in the airbnb unit.

@Justin Staples very broad questions but I’d say you should have great pictures to capture more bookings, create house rules that protect your property from damages, provide a very clean place and great communication, and if you are on top of that, Airbnb will naturally promote you as person who responds fast and provides a clean place, etc which helps your place get promoted.

@Reed Meyer I have a few places under arbitrage that do very well so I have liked that strategy to raise capital and increase cashflow when you don’t cash have for a down payment. However, I self manage my arbitrage units and I would not arbitrage if I had to pay for management. I’m sure you could still make a profit but probably not worth the squeeze. For this to work you need to get under market value rent, a hot location, a great manager who knows how to work the numbers, cheap cleaning, and no low months. From an investment standpoint, you don’t have much leverage and you have high risk.

I personally know a “str manager” who does management for arbitrage and I can tell you that he and his clients were hurting badly with covid, the reason was market value rents and no bookings resulted in losses. It took them many months to get back on track and even then the profit margins are super low for both parties.

I’d ask myself, how can my money work harder and make better margins?

@Alex Olson larger spaces work but it depends on the neighborhood. I agree that targeting residential neighborhoods to buy large houses for STR in KCMO is not a great idea.

@Benjamin Enriquez if you can provide the washer and dryer, then do it. I have one unit that has a coin operated washer and dryer but it’s in a multiplex, guests are warned up front and I’ve never heard a complaint. All my other places have washers and dryers in them and they work fine.

@Michael C. Great input - thanks for the tip!

@Barbara Chaney the issue with Airdna is that it works with averages and many people use these houses as their second homes. They block the calendars for their own stays or sometimes are newbies figuring out the pricing and systems so they may not be booked. Those things skew the numbers on Airdna. Check out the Airbnb profiles of popular STR management companies in the area you're interested in. If not management companies, look for hosts who have 10+ units. Those accounts are managed by seasoned people and the calendars will be more accurate - after you get a general idea, you can look at your immediate area and compare.

Another thing to keep in mind is cash flow vs occupancy. Many people aim to stay booked and lower the prices too much, that attracts unwanted guests. Figure out the range that makes sense for you and know that great cash flow doesn’t always mean 99% occupancy.

Cheers!