All Forum Posts by: Zachary Brown

Interesting to see the Agents suggesting to sell and buy something new and the investors suggesting to hold and self-manage. 

The market you are in is critically important. In my market for instance, I'd be thrilled with those kinds of returns as my area's more focused on appreciation than positive cash flow at the moment. However, that differs depending on the market you are dealing with. 

I think ultimately you have to be comfortable that in your market the decision made makes sense. 

Quote from @Ryan Moyer:

Quote from @Jay Thomas:

It is becoming increasingly clear that Airbnb has a bias towards favoring guests over owners, and it's not just a perception. Real estate brokers have voiced their concerns about how this can negatively impact the market long-term, as it opens up an avenue for short-term renters to take advantage of homeowners who are seeking long-term tenants. It's also led to an increase in bad apples on Airbnb, such as those who cause property damage or break rental agreements. The reality is that Airbnb needs to adjust their policies and make changes that better protect both owners and guests alike if they want to stay competitive in this arena. Otherwise, they risk losing customers to other real estate services that are more balanced and accommodating.

Speaking of bias, hosts think Airbnb overwhelming favors guests.  Guests think Airbnb overwhelmingly favors hosts.  It's really a no-win situation for Airbnb.

That does seem like a tough spot to be in for sure. Truthfully I've never felt (as a guest) that hosts were favored over me. I actually have noticed more about Airbnb being the problem vs the actual host. For instance, they did Airbnb Plus, which was an Airbnb creation that hosts could become eligible for I believe. However, the vetting wasn't very good or something because we had a stay that was listed as that and then didn't meet the qualifications. Whether that's Airbnb or the host's fault can be argued, but I was more upset with Airbnb than I was the host. Anyway, will be interesting to see where it goes in 2023! 

Quote from @Jay Thomas:

It is becoming increasingly clear that Airbnb has a bias towards favoring guests over owners, and it's not just a perception. Real estate brokers have voiced their concerns about how this can negatively impact the market long-term, as it opens up an avenue for short-term renters to take advantage of homeowners who are seeking long-term tenants. It's also led to an increase in bad apples on Airbnb, such as those who cause property damage or break rental agreements. The reality is that Airbnb needs to adjust their policies and make changes that better protect both owners and guests alike if they want to stay competitive in this arena. Otherwise, they risk losing customers to other real estate services that are more balanced and accommodating.

Thanks Jay! It's so interesting seeing this from the other side. I've always only ever been a guest, never had to think about it from the owner perspective. I did not know that's how owners felt about Airbnb for instance. As a guest, while I tend to agree Airbnb does tend to take care of their guests if you push hard enough, some of their policies are challenging to work with. Will be interesting to see how the platform adapts into the future. Thanks for weighing in!

Wow thanks for all the feedback folks! It's fantastic to see all the different angles of this discussion. One theme that seemed to ring throughout is that owners don't feel protected by Airbnb and may be looking elsewhere. That's helpful feedback for me to understand as a potential investor, so I appreciate it greatly. Thanks all! 

I'd love to hear from folks about what they think of Airbnb and it's use for STRs. As an avid user of Airbnb over the years, when it started, it was viewed as this amazing alternative to hotels that offered a very comfortable home type feel that you couldn't get with a hotel. I used it for years and always had very positive experiences as owners were very motivated to get five star reviews and build their value. However, more recently, I'm concerned that they've lost some of that charm and are going to suffer due to the structure of the platform/website. The glaring issue of course is the pricing. Airbnb's listing of properties at x price on the main page and then adding in sometimes outrageous fees when you click to reserve the property has to be the #1 issue I've seen from most folks as they find it frustrating and misleading. This coupled with the the fact that individual Airbnb Owners seem to have become jaded over the long term of owning properties, which has led to higher cleaning fees, hidden fees or exorbitant fees being threatened or charged to renters in an unprofessional manner I believe is going to cause a shift back to the hotel industry over time if they are not able to change course relatively quickly. 

One example I can provide of this is an Airbnb (3bdrm 2bthrm, $150 per night, 1 guest) I recently booked in Cary NC. Immediately after booking I received a message from the owner that was maybe a page or 2 long which outlined rules and potential fees we could get charged based on our activities in the unit. Some were reasonable, some were not, but here are a couple examples I found a little jaw dropping. $300-1000 fee for late checkout. Now obviously owners have risks with late checkout, that makes sense, but $1000? That seems extreme. $40 fee per person per night for any guests or visitors not listed on the reservation who are spotted by the properties external cameras. Again, management of the property to ensure abuse isn't occurring make sense, but external cameras feel very intrusive and uncomfortable. $2000 fee for pet damage, $3000 fee for any smoke damage. These are all threats made by the owner to let the renter know this is possible if damages are caused, so not flat rate fees, but implied. All of this coming after the booking is completed, not listed in the actual listing prior to booking, is so unfortunate and in my opinion so unprofessional. 

Finally, I'll just note that Airbnb has such strong market power that many folks don't see an alternative if they don't want to go to a hotel. I'm curious if that will change and we'll see another player de-throne Airbnb in the future. VRBO maybe? 

All of the above to say, what do folks think will come of Airbnb going forward? Are others seeing these issues as well? Forecasts/predictions? How will they impact the STR space in terms of investing? Appreciate thoughts from folks as this is on the forefront of my mind as I look at potential rental properties!

Excellent summary of information, much appreciated sir! 

Hello Jared! I'm a newbie to the REI space and am looking to buy rental properties in the Cary/Raleigh surrounding areas. Probably can't afford anything inside those city limits, so looking more at the outlying cities/towns, but still looking for reasonable appreciation value. I've been doing some research as well and am not seeing a buying opportunity at this time, although I'm keeping my eye on the opportunities that are out there to make sure I don't miss the right one as I'm just looking for the right opportunity, not the right time to buy into the market. Always happy to make more connections, so great to meet you!

Quote from @Steve Healey:

Hello Zach! I'm from Cadillac as well, and you may even recognize the name! ;-) Sherri and I have a duplex and an AirBnB STR. I've actually been looking in the Asheville, NC area. We have a couple years experience under our belt in long and short term, and your in my next target area. Perhaps there's some mileage in us connecting.

Congrats on the baby girl!!

 Hey Steve! Great to see a familiar face! Yes let’s definitely connect! I’ve been getting lots of great information and connections here, happy to help if I can! 

Quote from @Phillip Bradrick:

Hey @Zachary Brown, You've gotten a lot of good feedback and there are obviously many perspectives on when and how to jump in.  Finding on market, turnkey properties that cashflow is very unlikely to find unless you go to outskirt markets.  I would recommend possibly building a relationship with a investor / contractor that you could do some creative partnership with.  If you can find someone with hustle and construction knowledge they may be able to help you take down a distressed property allowing you to create cashflow and increase equity significantly.  In the peak of the market, the amount of off market properties were very few.   In the past few months, I have seen a significant uptick in off market properties crossing my desk.

I agree with @Kai Kopsch if you show some patience and work both on and off market properties you can find deals it just takes time.  Also, I am an RE agent and I know if you are working with one that sometimes the amount of effort to find a good deal, especially an off-market deal just isn't worth the commission.  I would chat with your agent and see how you could feed him possible leads on deals and help find that perfect investment.

I'd also come up with the minimum cashflow/ equity you are willing to take and stick to your guns until you find a deal.  I bought a duplex in the peak of the market last year for 25K under the asking price.  I was shocked by it myself but they had so over played the marketing that the many investors that looked at it all walked away thinking it would go for over asking price and we were able to scoop it up at a great discount.  Those deals are few and far between but with a good cash position like you have, I think there is more opportunity now than there was for the past few years.  

I hope this is helpful as you think through your next move.

 Thanks Phillip this is very helpful. I have gotten connected with some wholesalers and am on their mailing lists now for off-market properties, so I'll keep an eye on those to see if the right opportunity pops up. I agree, it seems in this market having the right connections is critical as a good contractor could alleviate many of my concerns in buying a distressed property. For now, I'm going to focus on continuing to build my network and find the right combination for a solid investment. Thanks for the feedback, much appreciated and great to connect! :) 

Quote from @Kai Kopsch:

The good news moving forward is that the housing market in Charlotte and Raleigh is cooling off, which means there will be less pressure on home buyers to put in an offer immediately. I helped a BP member a week ago to close a home in Charlotte that can be described "as the deal of the century"! There more deals out in this market shift. The fundamentals in Charlotte and Raleigh strong, meaning job growth continues to be robust, people continue to move here, and the cost of living is relatively low. We only have 1.6 months of inventory in CLT;a stable market is six months.

 Kai that is very interesting as I've been told Charlotte is the hottest market in the entire country right now. Great to see that there are still unicorn deals like that, but surprising. It's certainly an interesting market as out of state investors see it as very affordable and invest regularly whereas in-state investors have some pause as we don't compare against the more highly valued markets (NY, SF, CA). Appreciate your feedback!