All Forum Posts by: Stefan St. Marie

Ooh, just met an operator there and they're doing really well. 
https://www.bearbranchcabins.com/

Sounds like the A-Frame design is doing much better since that's a trending renter demand. Seems like that has a bigger difference than you'd expect. 

Valid point Mindy, 

And no the numbers shouldn't be the same, but thats what the buyer wants to know. 

What were the actual performance numbers, and what might have been the cost of management if it was professionally managed. A self-managed buyer might do worse on revenue but they also won't have the management fees so they might earn more or about the same. 

I believe at the end of the day, taking the gross revenue number and breaking down the costs associate are what matters. 

The main question a buyer has is this - "how much of my mortgage will this cover"

I see this a lot, and I think there's been so many bad projection tools on the market that the "what did this house earn" is a valid question.

For investment properties there is a true number and buyers want to know how that compares to the projections. 

What we need though is a standardized way to measure the metrics. Usually expenses are always understated and revenue is over stated. 

Is the "gross revenue" $708.10 or $541.26 for this booking?

Is it what the guest pays?
Or what the host receives?
And is cleaning fee part of revenue?

What is the industry standard for underwriting?

Looks like I should have asked more questions :) 

Okay some of the comments are assuming you plan to be the main operator and you won't hire a property manager. 
If you want to go that route then it would be best to get some experience first. 
Either with the cohosting route that @Manny Vasquez mentioned or doing something like rental arbitrage. Personally I think the margins are too thin on arbitrage to make sense, but its an inexpensive way to get experience fast!

So if you're going full hands on and operating something yourself then I'd suggest something within 20 min from where you live. 

Whatever you land on, make sure you save enough capital for furnishings and improvements. 
The name of the game these days is having amazing design and amenities to stand out from the competition. 

Are you planning to use this as a vacation home from time to time?
Or going strictly on the ROI?

Location is a big one for STR renters.
So I'd put that above condition.

If you're buying an STR then chances are you're buying it in a market you don't live nearby right?

While personally I'd go for something that I can add value to, its pretty difficult to buy a fixer upper in a market you don't have connections in. Your savings on the purchase price could get wiped out by paying premium on retail price for contractors you don't have a relationship with yet. 

That being said, I'd say look for turnkey STRs with bad photos and from people that seem like they self host. 
Also consider if they're missing some key amenities you can add for that value-add. 
Also, most people buy STR so they can also enjoy it. So I'd say look in markets that have year-round demand so you're not using it during peak pricing.

Good points, looks like there's really not many good comparables in this area. 
The homeowners did their own analysis and looks like Rabbu (above) is about half of what Airdna is showing. 

Turnkey vacation home for sale on Madison Lake, MN

$1,350,000 | 5bd, 8ba | 6500sqft 
$273k Projected Gross Rents

Private oasis, secluded 2 acre wooded lot on 253 ft of shoreline on Lake George in Madison Lake, MN

Address:
60305 Frankiedankie Drive, Madison Lake, MN, USA

Revnest listing (contact owner):
https://www.revnest.com/properties/117