The 2023 BnBust: Are Short-Term Rental Hosts in Trouble?

[@Grannyknockers]

It’s a bit amusing seeing all these gurus who started after 2009 and who have never gone through a recession as a hospitality professional. It’s like watching a kid who’s never injured himself lifting weights without a warmup.

[@hawx9124]

Say it louder for the kids in the back lol

[@MikeHawk143]

While frantically selling gym memberships. Lol

[@1138prometheus]

Right isn't it funny! They've learned one small segment of a very complicated interrelated ecosystem of financial assets and they analyze it nearly as a standalone "business". They've learned to play checkers and they can't see their playing 3D chess. The China impact hits later this year heads will explode.

[@Boomtowndogs]

Balance being restored.

[@MichaelKader]

Could you recommend an alternative or do you have content that could help? Otherwise, it’s kind of like watching a grown adult with no lifting experience comment about a successful lifters progress because he doesn’t believe they do the proper warm up.

[@JP-dc4xn]

Down here it’s always been said that money in real estate is made in the purchase, not in the sell. Meaning that you just buy at a good price to make sense. Lots of these “investors “ just bought too freaking high and with too much mortgage to carry

[@ClientFlow]

Yep. I was taught right from the beginning you need to make your money going into the transaction. Cover your bases so you don't get caught short. This looks eerily familiar to what happened in 2006.

[@Schemingdemon]

ABnB's are getting a bad reputation, the average small single family homes that made for a great alternative to a hotel are no longer giving the same value. The only ones that are doing well in this saturated market are the unique properties or are in destination areas like lake cabins. I know of several ABnB's in my area that are being sold or shifting to long term rentals.

[@janetvalencia597]

Can you share what area you are in?

[@Schemingdemon]

@@janetvalencia597 Kentucky

[@MikeHawk143]

Even the destination properties are having problems since gas prices up and the saturated market.

[@MichaelKader]

I think that really depends. My 3 bed rental rents for less than 2-3 hotel rooms and offers parking, outdoor area, full kitchen, etc.

[@eddiemalvin]

Airbnb's are getting a bad reputation largely due to the widening gap in expectations between some guests, who expect a "full hotel experience" at a discounted price, and hosts, who charge exorbitant nightly rates and cleaning fees but then ask guests to do laundry, vacuum and make the beds. There's plenty of room for improvements on both sides.

[@REinvestor83]

I own 4 in Crystal Beach and one in Freeport (Treasure Island). My cleaners say we are the most busy of all their clients. It feels a bit slow but looking forward to summer.

[@loriheisler9759]

First time watcher and listener here. I'm a short term rental stylist who just moved to Knoxville, TN this year and I just discovered BiggerPockets last week. What a great episode to kick off my year. Thanks, Rob, Jamie and Tony!

[@rossferguson5786]

I’m an owner/operator myself. There are problems …but also opportunity. Booking prices have come down. Too many amateur and bad operators have come into the space in the last few years.

[@user-ob4em4ge6c]

Airbnb busts in Florida is very bad. Inventory is climbing rapidly. Properties are sitting for months, with no foot traffic. None. This time is different. Just feels like something bad is brewing.

[@GCInvesting]

Definitely reason to be aware, but those who hold on will come out ahead!

[@Boomtowndogs]

Airbnb experience has deteriorated. You're better off staying in a hotel now.

[@JillWrightNailTechEvent]

Thanks for the data on the Smokies which is where we’ve held our yearly convention (G-burg) for 15yrs. What I’m seeing on my end with show attendees is more stay at hotels despite hotel prices virtually doubling since 2020 because it’s still less expensive for a single traveler or a couple due to all the STR fees tacked on. A large group can maybe split all the STR costs, but an average couple or family with children staying in a 1 BR/1 BA cannot pay a hot tub fee, pool fee, housekeeping fee, booking fee, mandatory insurance fee, etc on top of the 12.75% Smokies resort tax for lodging, plus the gas to get there & food to eat whilst there. STR’s are a personal deal breaker for me when their price total is over 50% higher than a hotel. At least hotels sometimes still offer continental breakfast & are walkable to downtown so no gas driving back/forth to town is wasted, plus use of the pool & hot tub is factored into the nightly hotel price.

[@ToddBizCoach]

You are absolutely correct. Yet realtors and agents in the Smokies keep listing properties at sky high prices per sq ft.

[@fullbattlerattle2493]

Well my Air B&B in North Fl is on fire. Booked up until April.

[@MikeHawk143]

What is the name of your place?

[@dylanscriven3972]

Yeah can u drop the name 😅 or dm me it if u ain’t tryna post it public

[@PrintKingdom904]

im in north flroida too, jans a bit slower of a month but still 80-90 % percent booked every month

[@ellamih]

Which city? I grew up in NorFL and parents still live there

[@PrintKingdom904]

@@ellamih I’m in jax

[@Youtube_ban_me]

You guys got people rekt

[@too-da-loo]

Part of the problem is that many refuse to lower their prices or accept medium term rentals. They would rather the house sit empty and hope for those 10 day full price booking than take a guarantee 60 day booking at a reduced rate.

[@jasontye3307]

I won't rent from short term rentals, period. No vacations and I won't rent from them over the winter. Short terms have wreaked havoc on the rental market along with corporate gobbling up housing stock. I hope this recession coming causes that short term rentals collapse.

[@danielalonzo7445]

My family is vacationing in europe and will NOT consider an airbnb because i trust a hotel to deliver a better quality experience at a more affordable price without the airbnb hassle of additional fees, like the astronomical cleaning fees.

[@tonyalutzTML]

Thanks for the info guys. Helped to solidify our long term plans.

[@chrisnolan7423]

Regulation is killing it

[@schrodingerssquirrel6973]

If the commercial adverts are any indicator, Then I think they are. I've heard horror stories about tenants turned squatters, Damage, And illegal activities.

[@robertglover8819]

It still a good rental market if you are well located and have good design style. You also need to be flexible with booking discounts. Winter is always slow so a monthly discount could be good.

[@miradimitrova9872]

Wow 🎉 I had no idea but glad I’m part of the 15%

[@smitd4ty]

good episode! appreciate the data used in this one, but my takeaway is that for STR to work you have to make significant investment upfront and expect mostly luxury travel to remain solid.

[@denisepancurak255]

Yes, to own a property and rent it out to attract the right clientele as a short-term rental and be screened properly, the investment should be professionally and locally managed.

[@gillbillrook7043]

another amazing episode, Jamie and Tony thanks for joining

[@secretbeach999]

It’s over. You’re all screwed 🤣 Better just sell that little rental property to me 🤩

[@dylanbarrett599]

Of course the guy over at Air DNA thinks highly of short term rentals

[@dylanbarrett599]

I feel like bigger pockets has become the “short term rental podcast”. It’s interesting to me with the volatility, red tape and saturation of short term rentals right now, it seems like almost everyone at BP is going all in on them.

[@cyrusjulian187]

Well Robuilt and Tony Robinson are big Airbnb gurus so there will be a positive bias

[@rabiesman888]

It's a good example of a late cycle real estate choice. Cap rates for regular LTR's were either very low or zero in some places. So investors find/move into another way to make more cash flow. Which than justifies/pushes assets prices higher. The problem is as running them gets more optimized and competition those cap rates also come down. Loans are currently being made based off of short term rental income projections(Dscr loans) they'll will loan 85% LTV. The problem is short term rental income can be much higher vol than LTR income. So as more and more people leverage themselves into these rentals the risk of an blow up from some unforseen event becomes more likely. Many STR won't cash flow as LTR, so if something happens(like huge increase of supple, drop in demand, zoning change/str ban, new big resort opening ECT) many people will find themselves in a negative cash flow position

[@cyrusjulian187]

@@rabiesman888 Completely agree 110% That's why when I'm looking at deals, I still try to underwrite and regular long term rental rates and the STR rates are icing on the cake.

[@shumatsuopost]

Love how you talk about these things!

[@gersoninperson3447]

A lot of people who bought properties to do short term rentals are going to be in for a rude awakening. I believe a lot of hosts will run into trouble. However key markets will continue to do well, and regulations will play a major role in that.

[@rubenfernandez6555]

You don't think long term rental can counter?

[@chrisashby32]

Lol i just started a STR in Park City utah and I'm killing it so idk if theres a bnbust

[@andrewm1167]

Need to work on the “THIS” in the intro. David really nails the volume and depth with a finality to the “s” that is an unmistakable closure. but the show was great

[@tanvirarafat8018]

Jamie Lane is a G!

[@rodyoung8428]

2 Airbnb Champions! Great show

[@MikeHawk143]

Or just airbnb hucksters.

[@Zako3737]

It isn't a bright side to be regulated...? It's only bright if you are already in that market and able to benefit from the locked-in supply

[@810612381]

hey Rob, don't yell at the camera ,when you announce the show number. you are freaking people out

[@eddiemalvin]

Great discussion with lots of helpful statistics. Thanks for sharing! Perhaps this is just anecdotal evidence but international doesn't appear to be more expensive than domestic. If fact, we've been able to fly to multiple destinations in Europe from the East Coast for less than $500 RT. We are able to ski Austria and Switzerland for less than a trip to Colorado. A global recession will probably push prices even lower.

[@Boostly]

Two of my favs 🎉

[@JayMcFly]

The amount of times Jamie said “uhhh” is really killing me brilliant guy knows his stuff but Gahhh Damnnnn

[@TheWhoIsThat]

Thanks for the video dudes.

[@karmicforce01]

Phoenix/Scottsdale market is saturated. The train has has left the station.

[@MikeHawk143]

Rob and Dave just bought that huge place!

[@vacationrentalhost]

I am surprised that Maui, the best city for airbnb investment per airdna, didn't come up in this interview. Maui, and Hawaii in general, is a very supply constrained market where the STRs aren't increasing as much because of very strict permitting regulations. Despite everything that is going on, the ADRs there have been higher than ever before. It is as if they are on their own island (pun intended). I don't get why this is not talked about enough.

[@bespoke4187]

Agreed and now the legislature is looking to add more regulation.

[@ToddBizCoach]

Airdna is full of misinformation. Example: they take a snowbird rental at discounted fee as being a 100% occupancy . Buying properties based on occupancy times full rate is an error.

[@dvanhorne]

I'd say the most common superhost name was Mike. XD but Idk. What did you guys see?

[@joeywharton5662]

I think there will be a lot more government/city regulation and crackdown on illegal STRs (probably half of my market) especially as the housing shortage increases; that will weed out the make-a-quick-buck hosts who are giving STRs a bad name. Those who are going in with good business practices will continue to do well.

[@veronicavelasco8456]

switch to mid-term rentals... less stress..

[@christians131]

How do you go about finding tenants? I’ve never really used Airbnb, but it seems like you’d have to find the right traveling nurse or contractor almost exclusively?

[@biggerpockets]

www.furnishedfinder.com/ is a great resource for medium-term rental investors, check it out!

[@kataclysmic4350]

🤣🤣c’mon, c’mon man. Me: riiiighht!??

[@edwinmachado7964]

Fun episode

[@cathiejensen9415]

How is the Long Term rental market in Huntsville Alabama? We have a second home there that we'd like to offer up. anyone?

[@ernstpierre7021]

dude wheres my car

[@sterlingpaul3004]

Most of the new investors don't even know that real estate has boom and bust cycles. Most will find that fact out soon...

[@ToddBizCoach]

STVRs are not a RE investment. They are a hospitality business investment requiring properties be bought/ built at a low enough price to support ConC returns of at least 20%.

[@rubenfernandez6555]

Do you think with mtrs as well

[@moonlightpark]

Give it 2 years for it to neutralize these airbnb "entrepreneurs".

[@boogle103]

And they say we are in a recession 🤔

[@Max-uu2gs]

20 stock price sept 2023. Bank on it

[@MikeHawk143]

They are really are downplaying the crash, it is really bad for those who bought peak airbnb frenzy, when these hosts were heavily pitching their courses, books, ads etc.

[@publicproclaimer9724]

Price collusion, aka, gas stations

[@Youtube_ban_me]

Haha it's funny how bigger pockets shilled this business model

[@allencoffland1685]

nothing says sophisticated investment channel like ......dude

[@ryanripz9668]

Never forget- Elections have consequences!

[@vincentmurphy9252]

all these investors who came in after 2019 going to get squashed 2025 --2025 2025 good luck oh and airBNB going to crap out

[@MichaelKader]

@tonyjrobinson Too late for 2022 but according to my Tax Professional you don’t need to necessarily have a renter by end of year but have it available for rental by end of year.

[@andresmattos7541]

Why is that all these KZbinr so bs post histerical dramatic intro pics?

[@GarrettbrownRE]

So you click and watch the video like you are doing right now.

[@CoffeeAndBusiness]

This isn’t just a KZbinr man. Bigger pockets is a community/ company that has been around since ‘13. They have had investors come on who survived 08-10 and who didn’t survive 08-10 but bounced back. Yeah the image is dramatic, but it’s not just clickbait with these guys usually.

[@GarrettbrownRE]

@@CoffeeAndBusiness Very valid answer.

[@andresmattos7541]

@Wapper Snappers KZbinr yuotubers semantics the point is that if they are.serious they shouldn't be posting clickbait histerical inteonpics

[@joshengen4480]

BP didn't use to but I think they're trying to find ways to keep their viewers/listeners.