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Hi everyone. I’m getting ready to finally put up a structure on a property I bought 2.5 years ago and was hoping to get some opinions/advice before contacting folks who charge for their time since this will be my entry into the STR world. I’ve already learned quite a bit from reading other topics here and I’m grateful that so many of you are willing to share your knowledge.
First, has anyone ever been able to find any statistics on the what percentage of rentals are done by couples, groups of 4, etc.? There are tons of statistics out there but I haven’t been able to find anything on this which I would think is much more meaningful than a lot of what I could find. Worst case, perhaps if any of you own something similar to what I will have you could provide some info from your experience. My property is 100 acres of mountain-like property with a stream and waterfall in TN and I’m hoping to get mostly week long plus stays. My impression is that mountain properties seem to not get the large groups as often as beach properties. Since I will be building or buying a cabin I’m trying to decide how many beds and baths I want to do.
Along a similar note, I’m curious if anyone can provide any info on property types and liability/risk. I want to place the rental close to the waterfall since that is the main attraction. I also will be staying in camper near it myself, eventually building myself a house once I can save up the money. I will obviously protect myself with the appropriate insurance but I’d guess I could still be at risk of losing the property in a lawsuit. Since I don’t want to have permanent unwanted neighbors that close to me, I’m wondering if doing a mobile cabin on wheels would make a difference versus a modular home or site-built home. It would be great to only lose the building as a worst case scenario, so I’m wondering if the type of structure would matter. I’d prefer to not divide up the land. Can the structure itself be put in an LLC and have it rent the ground from me? Could I own that structure and have the LLC rent it from me? I really appreciate any info any of you can provide.
I have no idea what is most popular in terms of the number of guests that are most common in your area, but I can tell you that less guests means less problems, less potential for damage, less wear and tear.
I don’t know what sort of zoning and building restrictions apply to your property, but I’ve often thought that if I had a large piece of property and wanted to start a short term rental business, it would be cool to erect several tiny houses, each housing maximum 2 guests each. There could be a communal hang-out/barbeque/firepit area, which, as you will be living onsite, you can keep clean and safe.
The tiny houses could be on skids or wheels if you wanted them to be moveable in the future, or so they weren’t considered to be permanent structures by the local building codes.
Thanks for your response. I agree. I probably should have mentioned that I’m probably not going larger than 3 beds and 2 baths. The big consideration is all of the pre-built stuff seems to top out at 2 beds. I could get around that by doing a basement with a bedroom in it.
I’ve certainly thought about what you propose but I’m not certain that I would have the demand to keep multiple structures rented. I’d like to think that I could eventually get there but one slightly larger cabin should be sufficient income if I can keep it rented most of the time. I also wonder how much difference the “100 acres to yourself” angle would make. While I will be there, I’m hoping that I can convince people that you won’t even know I’m there, unless there is an issue. I intend to place both structures so that there will be no visibility between them and since I’m there all the time, I won’t be out exploring like other visitors would. Thanks again.
Thanks for the advice. I’ve talked to some local officials about various things and it’s my understanding that I can do what I want for the most part as long as I don’t disturb more than 1 acre of land. After that, things get more complicated because of the water.
So much depends on your state and town/city rules and insurance available in your state that this forum may be too broad to help as much as you would like. In my state if you live on a property and you can file a homestead with the county and no lawsuit can actually take your home. They might get some land though. Be sure to investigate insurance costs - they can be steep.
Don’t overly concern yourself with that.
Properties with off-site hosts are the ones that tend to experience the most problems- partiers, sneaking in extra guests or pets, etc.
Wording like " Please note- this is an onsite host property. While my dwelling is not visible from the guest cabin, and I fully respect my guests’ privacy, I am readily available to be of assistance if you need it."
This will ward off guests who have devious plans and puts guests on good behavior. And it seems that checking guests in personally, as long as you make the orientation quick, and don’t get too chatty unless the guests seem to want to be chatty themselves, also encourages respectful behavior.
As to demand in your area (and competition) I would seek out @JJD here for assistance. Of course, even if you knew the competitive landscape today, that could change. [Everything changes.]. Meanwhile, I would encourage you to look at Airbnb and VRBO listings in your area to get a sense of competition.
I’d also seek guidance from local realtors on what kinds of properties are built and being built and what features in the area are especially appealing. After all, one day you might want to sell the property as a single family home so you’d like to build in features that would make that appealing in multiple marketplaces.
A few recommendations, some mine own, and some gleaned our outright given to me by the many experienced Hosts here.
My personal preferences:
Bathrooms – I’ve done a search in my area by which I can see that the current supply of homes that can accommodate six or more people is far less than those that can accommodate fewer people. Including a bathroom with each bedroom would be an attractive feature that not only could accommodate larger gatherings but also could enable you to rent each room individually, which I think would give you great flexibility.
Views/Windows – Get big and energy efficient windows. Why? For light, for views, for cost savings.
Energy efficiency – This will pay off, especially as guests will be less diligent than owners, and you don’t want to be overly controlling. If bedroom temperatures could be individually controlled that would be wonderful.
My personal recommendations
Get a lawyer experienced in real estate and a good accountant. That lawyer should draft a lease that will protect you to the extent possible under the law. The lawyer will also advise you on an LLC, which will provide further protection. Whether to put just the structure in the LLC or also the land, the lawyer can advise you on the legal matters; a good accountant can advise you on the tax and financial implications. Your lawyer can also discuss zoning and other legal issues you might not have identified yet. Remember that laws can change. I am guessing that you are not in an area that might restrict STRs but you might want to get a sense of that.
Some tips I’ve learned here
Consider OwnerRez as a platform that will give you control over the whole rental process, including requiring the signed lease and the guest procuring insurance with each rental. Resources here might be @busymumsy and @PitonView.
Consider (this might not be needed given my sense that your property is unique and isolated with few competitors but I don’t know if that’s accurate) a pricing service like Wheelhouse. It’s not much money, about $200/year.
I’m assuming you will be the Host and will manage the property and have access to really good housecleaners and handy service people. Many housecleaners will not do what an STR housecleaner needs to do: laundry, dishes, noting stains/damage, putting things back where they know (guests might move things around, put pots and pans in the wrong cabinets, note the supplies and what needs to be ordered. Maybe you’ll do some of these things,
I think you can get a free coach through Airbnb. Ask @Annet3176 . I think she is one herself. If she’s available, she’d be terrific.
@muddy’s idea on several tiny houses is intriguing. Having more structures is intrinsically more expensive but it’s an appealing idea. I would like the idea of some central inside area as well as an outside area. Could the property, designed that way, be appealing for corporate retreats? or for events (outside Airbnb) where speakers/gurus and others come for workshops? You’ll find creativity like that here, so keep staying tuned as others respond to your very interesting post.
I just read your response to her, so I understand that’s not the way you want to go now.
Ask around about ‘channels’ in addition to Airbnb that might be appropriate for your kind of property. You don’t want to rely forever on any one platform such as Airbnb. I wonder if there is another channel for your kind of property. Certainly consider VRBO but thee might be others.
Get a commercial insurance policy like Prosper.
I’ll stop here because you have homework to do – finding your lawyer and accountant, studying your marketplace online and with realtors, getting a coach, exploring OwnerRez. Reaching out to some of the Hosts here.
@Brewski Since you are going to be building from scratch, design the place with ease of cleaning and damage-proof surfaces in mind. Think tile, polished concrete, or wood floors, no carpeting. (Small colorful area rugs can be thrown in the wash). Curtain rods with clip rings, so curtains can be easily taken down and washed are easier to deal with than cleaning dust and dirt off of blinds. Flat front kitchen cabinetry, with simple handles and knobs is easier to clean than cabinet doors with raised woodwork designs. Make sure there is a lockable storage area for your supplies. You don’t want to leave 24 roll packs of toilet paper and such in guests’ reach, as some may go “shopping” at your place.
Start with one unit, then add as demand dictates. Keep it simple, since in all likelihood you will go to a spider-web layout eventually in the future when you start catering to groups of related people, which is the most financially and hosting attractive for hosts. Keep distance between units. At that time you be shifting toward a central shared facility for general entertainment.
The trickiest thing is the decision between being mixed group or single-entity (i.e. group of friends or family), along the way. Next to families, groups of friends getting together every year or few years are the most common groups.
The reason to eventually shoot toward groups? Money, such models make 5x-8x as single offerings. These people are also big spenders and no one is wanting to look cheap.
Trails and places to sit are the key to your type of place.
I realize the U.S. is a litigious asylum, but fear of the unlikely is worse than the true reality.
We have a member, @shadowmnt, that has a similar set-up also in TN. She advertises a waterfall as well. You shouldn’t bring up the week-long stay thing with her but she may be able to give you some insight into the local market there.
My opinion is that a 3 bedroom is one too many bedrooms. Having gone from offering 2 bedrooms with 4 people, down to 2 bedrooms 3 people and now just a master bedroom I can honestly say that life is much better with less people. Less wear and tear, less laundry, less party potential, etc.
Also, with one bathroom and one bedroom, cleaning (which I do and also raised my rates) is a breeze. I can do all laundry with 2 loads. (I line dry except sheets and towels) .
To my surprise, I’m nearly at my 2019 income level even with 1 day blocked between dates, adding a 2 day minimum and decreasing to 2 guest. I often get just one person booking too. I raised my rates but am still one of the lowest (not too low or you get problematic guests) but low enough to get some of the Boston market.
Thanks for responding. I’m hoping to hear back from a lawyer that is knowledgeable on this stuff soon. I’ve reached out to several. Hopefully there will be something similar to what you mention available for me.
That makes sense. Hopefully anyone I would want staying there won’t be turned off by that. Perhaps I’ll give folks the option on how they want to check in. I appreciate your advice.
Thanks for taking the time to provide so much information. I will be sure to look into the things that you mention that I haven’t already. I certainly hope to have as many large windows as possible so we’re on the same page there. I plan on doing the cleaning myself, at least at first. I think that is a good idea for a few reasons and the little extra money won’t hurt.
I wouldn’t give them a choice, simply because general concensus, according to all the host posts I have read, is that a meet and greet on check-in seems to encourage more respectful behavior.
You can still allow self-check-in if you are busy and not home to check them in, or if their ETA is past your bedtime.
No guest who doesn’t have nefariouus plans should object to a brief host check in. As long as, as I mentioned, the host isn’t overly chatty or trying to overload guests with too much information. Guests are usually tired from travelling and just want to get settled in. So just point out any quirks they need to be aware of, and direct them to the house manual, where they should find explanation of how everything works, wish them a nice stay and to feel free to contact you with any questions, and disappear.
It’s also a good idea to let guests know the hours you can be reached for non-emergency issues or questions. You don’t want guests calling you at 1am to say they can’t find the hair dryer, which believe it or not, some guests might do.
Sorry, I just got the suggestion for quoting and replying to multiple posts at once.
Thanks, I hadn’t considered the curtain vs blind thing or cabinet details. The rest has crossed my mind. While I would prefer something a little more worry-free, I feel like most people will like a cabin given the setting.
Thanks for the ideas. The more I think about, especially after getting input from you all here, the more I’m open to the idea of eventually having multiple units. I’m already going to be there so the complete privacy ship has already sailed. I’m sure you’re right about the reality or so many people wouldn’t be doing this.
Thanks for the heads up!
Thanks for the input. There certainly are a lot of positives to that. That would also limit the amount of children which is something I still need to figure out with the water and all the steep, rocky terrain.
That makes sense. I’ll likely do that then. Thanks for all your help!
