Spend some time really thinking about who your most common guest will be and what they’d enjoy, what would drive them to leave a positive review and want to revisit. Then take that list and see how many of those items your local competitors have! More features = less vacancy. That can be much more important than the
MORE FEATURES = LESS VACANCY.
nightly rate you charge. LONG-TERM PLAN
Have a back-up plan in place such as:
The long-term plan with these STRs can be tricky. If demand stays strong, supply stays within reason and nightly rates continue to increase. Then the sky’s the limit with how you can make these work. I always suggest that less experienced investors start slow. Get the feel for long-term rentals and owning property in general. Then expand and diversify into this category and grow from there. I do see some investors potentially putting themselves in a long-term bind by purchasing generic homes for STRs. But if they don’t succeed as an STR, there is no back-up plan that is viable.
1. Sell the furnishings and turn the STR into a traditional long term rental (pending carrying costs)
2. Focus on mid-term rental (think corporate/ medical field housing for 1-3 months at a time)
3. Undercut your competition on pricing for the STR to drive down vacancy and hopefully increase positive reviews. This move will then increase the exposure and desirability of your STR, allowing you to slowly increase nightly rates until it becomes truly viable.
STR 2023 OUTLOOK
I love reading others’ predictions for the upcoming year, but I hate delivering them myself. I always lean on the conservative side here and so far, it’s served me pretty well. I think we will have a decent-sized recession and consumers will pull back some on travel and discretionary spending. I think businesses will continue to closely monitor business travel as well. In saying that, I think 2023 will be the year of trimming the fat on your expenses from your STR without taking
away from the guests’ experience. I also think hosts/owners will have to decrease nightly rates to become more competitive and give an easier justification for people to stay at your home and spend money. And finally, as money gets tighter, guests get pickier because each dollar feels more important. So, as an owner, investor and host of an STR, you’ll still need to provide a best-in-class experience in order to push through a slower time.
JASON KOGOK Co-Founder of LuxuryMovers Real Estate Investor and Author Read Jason’s Book
Jason Kogok started his real estate career in North Carolina in 2002 and became a real estate partner in 2005 with LuxuryMovers. Jason has a General Contractors license and a broad sense of knowledge in investment properties. He enjoys fixing up homes in his spare time, as well as teaching real estate investing at Wake Tech & NC State University’s Continuing Education program. Most recently he authored the book Plug the Holes, Fill the Barrel: A Beginner’s Guide to Building Wealth with Real Estate to teach others the ABCs of building wealth and financial freedom through real estate investing.
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