All Forum Posts by: William Beck

Yeah I got a side-by-side comparo from my client with the following screenshot. I've edited for confidentiality sake but I'm quoting what the local property manager shared. 

This is good stuff to know and share with the BP Community: 

Hi ____,

Thanks for reaching back out!
It's also important to know that Vacasa is able to offer a lower fee because they charge guests extra booking/management fees that they keep 100% of, which means they have to charge a lower nightly rate. Here's a side-by-side example of a Vacasa property in the ____ development (left) alongside my listing (right):

You can see that while the total price for both properties is similar (within 5%), with Vacasa, they've marked up the cleaning fee to nearly double and have also added an 18% "Booking" fee In order to then stay price-competitive with other listings in the market, they've had to reduce the nightly rate to $85.33 per night, compared to the $124.95 in my listing.
In other words, assuming Vacasa pays their cleaners the same as I do (reportedly they pay closer to minimum wage, whereas I contract with highly-skilled professional cleaners), Vacasa is making $148.52 on this $534.29 booking and the owner is only making $204.80, whereas on my plan, I'm only making $93.71 out of the $553.37 booking and the owner is keeping $281.14. So despite the lower fee, Vacasa ends up keeping more of your money due to hidden fees.

*Updated post with better high def images of the booking summary breakdown*

@Collin Hays I might need to consider a weight limit for guests! We'll see how that goes.  Too many funnel cake places in Branson. ha

I actually had a client point out the additional fee thing to me and it's definitely a thing. Very interesting. I used to work for Evolve 2 years ago and sell the service so I can say for sure that they have a slightly different fee structure, but they have their own challenges. They are always changing though which was the only constant when I worked there from 2017-2020. I have a property I still have them manage. Evolve does do a mandatory damage claim policy that the guest pays for (And I don't know how much Evolve is keeping as a % of that fee ) But I've used it at least half a dozen times and I really dig it. It's probably saved me $7000 out of pocket. 

It's helped pay for, without a deductible on my primary insurance: 

-A new King Bed after guests broke the other bed when they showed up and most likely jumped on it

-A new Queen Bed  and Box Spring after similar situation in the upstairs bedroom

-A new Dining Table after guests left a bunch of super hot pots/pans on it and bleached the wood

-Repaired door frame after a guest must have broken the front door

-A new sleeper sofa after guests bent the pull out metal hinge to the point where it would no longer retract into the sofa. 

-New chairs on the patio after guests broke those

So I definitely like having that. Are they managing it well enough to offset that amount vs. me self managing? Probably not. Anyone who's interested in getting the absolute maximum performance out of their property will absolutely do better if they self manage. There's no question to that. But I do think Evolve and Vacasa are the largest players in the space for a reason, it's just not for everyone. That is still pretty questionable that the fees are getting snuck in there like that though. 

@Greg R. I used to include the Coachella area but that whole state is a regulatory minefield and not super owner-rights friendly... and taxes. I know some people who've crushed it in Joshua Tree too so it's not a no-go zone, it's just harder. 

What's the % Vacasa quoted and what's the local PM Charge? I know Vacasa does a different % based on market which could be worth looking at. 

Find someone who wants to help you out! Just reach out to anybody on this platform that knows their stuff. *Not everyone knows their stuff so it becomes a vetting process of who can help. Just take every bit of info with a grain of salt but there is a ton of wisdom on these forums. 

I think figuring out cap rate, cash on cash and all the numbers is something that comes after you've picked a market. I used to get the question "What's the cap rate for the _______ market?" I would just roll my eyes because... what does that even mean? I know some management companies have put out articles for "Which market has the best cap rate" and they just pick a smattering of areas and throw in arbitrary #'s. These calculations are only property specific and shouldn't generally be used for an area because there are way too many variables, what size property? where is it located? does it have nice furnishings and amenities or is it very basic/entry level? How is it being managed? 
First figure out your budget. Second research the market that fits that budget. Don't forget about regulatory research (Hopefully a good real estate agent should help here) Then you can start to analyze property deals. I would only disagree with Bruce about the point of having to buy something that isn't already an STR. There are a lot of advantages with buying something fully turnkey in that you don't have to mess around with contractors or furnishing logistics from afar if it's totally set up as a nightly rental. I would agree that there is some opportunity to buy something that's operating as an STR and needs updates to get it to perform at a higher level, where you could potentially buy it at a lower price to get a better return via upgrading on your own. But it's totally up to you.

Octagonal fire pit swings

Just don't buy in an area that doesn't allow you to do it. Surprisingly there are a lot of areas out there where you think having a vacation rental would work fine but it doesn't. 

Definitely a lot of bang for your buck here in Branson! This is one of the top STR markets in the country. There are restrictions no doubt. I like that is protects against saturation though. That way there won't be a runaway oversupply of vacation rentals that comes and wipes everyone out. I only work with investors in this market for STR purposes so this is definitely a great place to invest.