Lessons learned in first 2 years of owning our first STR

We are a few months into our 3rd year with our 4 bed (12 person) STR in Pigeon Forge, TN. I wanted to share some of the things we have learned that we wish we knew early on when starting our STR journey that could help anyone in the early stages.

And being that I am only in my 3rd year of this, I know I'm not an expert. So any comments from seasoned STR hosts and investors are welcome! I'm happy to edit this post with any suggestions or comments on things people may disagree with.

A lot of this info consists of things I have learned from reading and engaging with the amazing people in this forum. So the fact that you’re here already gives you a leg up! Keep reading and engaging in the forums as this industry is ever evolving and there is always something to learn!

Before Buying the Property

1. Analyzing Deals
   1. Use multiple methods to analyze revenue: Many will tell you to use the enemy method and go through AirBnB and VRBO listings to find pricing and occupancy of comparable listings to estimate revenue. This is a great method, but should be combined with other methods to get a better picture. Analyzing just from the listings can be difficult since booked days won't show pricing and because pricing software formulas are complex and daily prices are constantly changing. The method that has worked best for me is using a pricing software (I use PriceLabs but other comparable softwares are just as good). Most have a Market Analysis tool that will sort through listings in a specific area and give you yearly numbers for occupancy, average rate, total revenue, etc.
   2. Only use VERY SIMILAR properties for comps: Properties you're using for comps should be almost identical to the property you’re analyzing. Not necessarily in layout, but location, views, amenities, # of beds/baths and square footage should be very very similar if you are using it as a comp. Something as simple as having an amenity like a grill/hot tub/pool table or a gathering area like a nice porch, fire pit, etc can make a HUGE difference in revenue. If you cannot have one of those things, never comp to a property that does.
   3. Prepare for lower revenue in years 1 and 2: This is something many don’t prepare for. It takes time to gain traction on booking platforms and more importantly it takes a few years for you to master your pricing strategy. Plan for approximately 20% less revenue than anticipated year 1, and about 10% less year 2. With proper management and pricing you should reach optimal revenue around year 3.
2. Visit the area before making offers:
   1. Online research can only do so much. For the amount of money you will be spending on this type of investment, the cost to drive/fly to and stay in the area for a long weekend is absolutely worth it.
   2. Pay attention to where the big attractions are: Locate all the things that will drive tourism to the area. Find areas that would be desirable for a guest to stay. You want to get a feel for traveling around the area, areas directly around attractions can be loud and hectic and it's often ideal to find a quiet area with an easy drive to the attractions, without being too far from the fun.
3. Build your team BEFORE finalizing a deal on a property:
   1. Contractor/Handyman: Home inspectors are not perfect and can often miss things or underestimate issues. Having a good contractor/handyman walk through the property and provide estimates for work to be done before closing will help you immensely.
   2. Cleaner: This is a pretty obvious one but have a cleaner picked out before you close. You can look through companies in the area on google or use a cleaning platform like Turno to do this.

After/During Closing

1. Stay in your property before renting it out to guests:
   1. Walking through the property during closing and getting pictures/videos from handymen/inspectors is not enough. They aren’t trained in hospitality and won’t pick up on little nuances about the property. Even during a short stay you will notice a lot of things that will annoy guests or that could improve their stay.
2. Fix EVERYTHING that could be an issue in the first 6 months before opening to guests
   1. Get this all taken care of before opening it up to guests. Trying to fix things as they come up in the first months will be a nightmare and will lead to bad reviews. Be proactive, it will save you money and stress.
3. Setup your listing on the platforms
   1. Optimizing your listing could be a whole post in itself but i’ll give a few tips here.
   2. Spend the money for immaculate photos from a professional photographer: Trust me, it's well worth it.
   3. Make a great, eye catching title: Mention your best amenities, and if it's close to an important attraction, mention it in the title. This along with your top photo is what will get someone to stop and click on your listing.
   4. Keep descriptions short, but informative: Most people won’t read through the whole description. Make a detailed bulleted list of amenities, proximity to big attractions, and important info about the property.
4. Get your pricing software and management software setup
   1. Pricing software: Don't try and do pricing yourself. The Value of a pricing software FAR exceeds the monthly cost. A good pricing software knows all the events in the area that drive tourism and will optimize your revenue much better and with much less effort than on your own.
   2. Management software: If you’re self managing you will want a management software. It gives you a place with organized combined calendars and allows you to set-up automated messaging. I’ll talk about messaging specifics in the next section.

Operating your STR

1. Communicate early and often with guests
   1. New booking message: Setup an automated message to go out to the guest immediately upon booking. Explain important details about the cabin here and be sure to let them know you are always available for questions.
   2. Pre Check-In message: Many guests book out months in advance. It is nice to get a brief message the day before check-in to remind them of the check-in process.
   3. Day 1 message: Some send this message the night of check-in, I prefer early the following day in case they are checking-in late but either is fine. Ask them how their stay is going and if there is anything they need. This is the first step in securing a good review. Many guests will choose not to mention any issues or reach out during their stay but then are quick to write a bad review when they check-out. Sending this message gives them a chance to mention any issues so you can get ahead of them and address them promptly.
   4. Check-Out message: Send this early-ish on the day before check-out. Include all your check-out instructions here. Keep your check-out instructions short and simple. There is nothing a guest hates more than lengthy and needy check-out instructions. Don’t hire a cleaner that asks you to have guests do laundry, dishes, etc. before their check-out.
   5. Review Request: This message is extremely important. Make sure it gets to them before the booking platforms send out their prompts for reviews (typically around 2pm the day of check-out for AirBnB). Make sure you say somewhere in this message that you will be leaving them a 5-STAR review. This sets the standard for them that 5-stars is the expectation. Many guests don’t understand this and think 4-stars is still a good review, but the platforms treat 4-stars as a fail.
2. Have several handy-men/trade specific contractor contacts for when issues arise, and make sure you have someone available on weekends
   1. You will run into surprises at inopportune times. You need to have multiple people you can reach out to for simple fixes, plumbing, electrical, hot tub specific problems, etc. and guests expect quick responses. If one of your contractors is busy, you need to have options. And not all contractors work on weekends, you need to make sure you have options for weekend problems.
3. Optimize your pricing
   1. Start low, and increase with high occupancy: Occupancy is the key early on. You do not want to price too aggressively and not get enough guests in the property, start low and increase your price when occupancy is low.
   2. Fine-tune pricing with manual overrides: Pricing softwares are awesome, but they are not perfect. You cannot just sit back and let the pricing software run the show, especially in quieter months. As you start to notice trends you will need to modify pricing during specific times to optimize your occupancy. I check my pricing and assess future dates every week. This is especially important in year 2 once you have a whole year of data to go off of. Get ahead of the quiet months and discount aggressively to try and fill up your calendar. Again, occupancy is the goal.
   3. Find future occupancy rates that work FOR YOU: The pricing softwares will provide future occupancy metrics (% booked for next 7, 14, 30, 60, 90 days). There are a million Youtube gurus who will give you specific goals for these. Don’t listen to them. Find the numbers that work for you. And when you don’t have a year or 2 of statistics to use for analysis, use the booking lead times (how far in advance guests book) of successful listings in the area (you can find this on the Market analysis tools on your pricing software). For me, I have found that being aggressive on these metrics is the best path for our property, but booking lead time is market specific. For my property, especially in quiet months, I like to aim to book the majority of a month 30 days in advance. Increasing my booking lead times led to massive gains in revenue in my 2nd and 3rd years.
4. Hold your cleaner(s) to a high standard:
   1. Most people don’t find their long time cleaner on the first try. There's a good chance you will have to fire cleaners at some point. Communication is my #1 priority with a cleaner. If they aren't notifying you of damage or problems with the property as soon as they get there to do their initial walk-through, find another cleaner. If they are combative any time a guest has a complaint about the condition of the property, or if you receive multiple complaints in a short time period, find another cleaner. There are a lot of fantastic cleaners out there, but you won't always find them on your first try.