The State of STR’s in WNC

Speaker 1 [0:00] All right, so last month we had clicker problems, and we're hoping that we have clicker problems again, apparently. So, Mitch is gonna be helping us out. Mitch, can you give us a slide?

Unknown [0:11] All right.

Speaker 1 [0:14] So, today, you got Ray Ray and myself, Rodrigo, who are gonna be your host for the evening. However, this was originally founded by myself and Zach. Clicker's not... Thank you, Mitch. So, and there's Zach, but he's not here tonight. He's flying somewhere across the ocean at the moment, we believe. We will still get the Ruiz Report in a similar manner as we did last month, though. Yes.

Ray Ray Hicks [0:42] Slide please. All right, so also, please, of course, all the socials, right? Please tag and follow us at AVLmeetup. You can find us on the different platforms. Stay tuned with what we've got coming, what we've got in the works. And of course, we'd love to hear from you. Whether it's topic ideas or feedback. We'd love to hear from you either way. So please give us a tag and follow.

Speaker 1 [1:08] Just do one more. So the next one's just the agenda. So I just know what you can expect tonight. We obviously did the networking and the welcoming a little bit, and now we're gonna do a little bit of the housekeeping. We do table topics like we did last month, and then we will get the panel going right about, you know, about 10, about 20 minutes or so from now, and audience Q and Day at the end. So again, as you're listening to the panel, take the opportunity to get questions ready for the panelists. So our goal here with AVLmeetup is to bring together the movers and shakers in the actual real estate world, so that's, you all, thank you so much for being here.

And we're doing this through the net profit philosophy. Perfect, Mitch, thank you. And unless the clicker's working all of a sudden, Who knows? All right, so the net profit philosophy, for those of you guys who don't know, I'm sure most people have heard of this before, but it stands for networking, education, and transactions, and it's a net profit philosophy, because nobody cares about gross profits, of course.

So, uh, networking, uh, you know, that's what a lot of what we were just doing, and just to give an examples, like, if you if you can raise your hand, if you own a short term rental in the room, so, just kind of, if you look around, you'll see, say, somewhere about 60, 70% of the people raise their hand. So like, a lot of people in the room are already in the business. It's a good opportunity to just connect with people, have a clear ask, have a clear give, and it's gonna go a long ways to creating good opportunities to connect, educate, and do more transactions.

Ray Ray Hicks [2:37] So the for net profit philosophy, right? So the E is education. So many of you have been here before, and we appreciate you coming. So we take once a month to really try and educate the movers and shakers here in Asheville on all things real estate. We've done investment topics, agent topics, brokerage topics, things like that. And we also did a two day summit back during the summer. So thank you for those of you that came to that. We had 12 speakers over two days, and it was really powerful and impactful in terms of agent and investment strategies. So that is really the education aspect of it. So we're excited to say that we are on number 22 in terms of monthly topics.

So almost two years, our two year anniversary will be coming, so super exciting.

Speaker 1 [3:19] All right, so, if you have good networking and good education, just the natural outcome of that is transactions. We're still figuring out how to encourage that to happen more here at these mediums, so opening it up for ideas if anybody has an idea on how you would feel more excited or more comfortable to actually do deals together in the room. That's our goal. I do know a lot of deals have happened with people outside of the room, and that's obviously a great thing. So anybody done to deal with somebody else in the room, from the meetups? So it's happening. We wanna increase those numbers, of course.

Unknown [3:51] All right, Mitch, thanks.

Ray Ray Hicks [3:53] All right, so, as you know, hello, my name is Ray Ray. If you would like to volunteer at any of our meetups, please shoot me an email, volunteer at AVLmeetup, or feel free to find me after, grab my salad, be happy to schedule you. It's a pretty cool and unique opportunity. to be able to be front and face with everyone as they come in and just say hi, and ideally, again, network and do some business together. So can we get a round of applause, please, for tonight's volunteers? All right. Thank you so much. Oh, and as you can tell, we are missing our sound guy tonight, he was unable to be here. But we are looking for a replacement.

So if you'd like to come on, and if you know anyone that's an expert in sound, we are looking for a help with sound guy or gal, we are looking for that. So please see us after, if you know someone, or you are that someone.

Unknown [4:46] All right, so...

Speaker 1 [4:49] How many of you all were at the old location at archetype, right? So, show of hands. We moved here. A lot of that was based on the feedback we got from folks, that was maybe not the best fit for everybody. We do want to continue to make and improve these events that you guys continue to enjoy it and feel like it's worth your time to come out, so thanks for being out. But second of all, please give us some feedback, if there's any topics, or things that we can do to improve the experience for you all, please let us know. Super important. There's feedback QR codes there on the tables, where you can scan this. We'll also have it up at the end of the meeting.

But please, we would appreciate any feedback that you guys can give us.

Ray Ray Hicks [5:27] And next, as you know, Zach, our cofounder, he is the data guy. He's a local data guy. He may even provide a lot of you with the Ruiz Report. It's a wonderful report generated for agents, brokerages, amongst other things that he does with the awesome data around the Asheville Bunkum, really, all of North Carolina inside of Canopy. So, he filmed this for us in Spain, as Rodrigo said, he is traveling back. So we're gonna bring him in and watch his video, so you can understand a little bit more about the current market.

Speaker 1 [5:55] Going on, everyone, Zach coming to you from Barcelona. I don't mean to flex this hard, but I'm about to get on the plane, and this is the only place I could be to, uh, record. So, super excited for tonight's meeting, as we all know, short term rentals are a very, very real thing in our market, and really excited to learn about that. Really, you know, I'm glad that we record these now. If you haven't been listening to our podcast. Definitely check it out. It's on Spotify. You can find it on the website, but sad to miss this one. Tuna, I'm in a miss, but as we speak, I am in the air. I'll be landing at 10 p.m. so I hope you guys enjoy it.

With that, I'm gonna go ahead and share my screen and just get into this month's market report. All right, so, this is month 43 that we've been doing the Ruiz Report. Not too shabby. And we're seeing some changes. So if you don't know who I am, my name's Zach Ruiz. I run the Ruiz Report, I also run a website called RMC.co. It's about, all I do is data and analytics for real estate in the area. Honestly, that's my son Evers there. And, uh, the Ruiz Report is mission is essentially twofold. One is to equip realtors with the data driven market insights through our 10 slide report. That's what we're gonna go over.

And two is to empower them with industry leading training to become their client's local economist of choice, and that's what we're gonna be talking about also today. Right? And we do that by starting with the graphs. Or as I like to say, the pretty shapes and colors are how to read the graph. So every graph is going to copy this pattern. On the far right is the report month in question for our purposes, it's going to be September. To the left, you'll see another bar, or metric, and it'll have a red box around it, and that's last year, so last September. And then you get the trailing three or two months, but it gives you a quarter. So it's the quarter coming in last year, essentially.

The three months coming in last year to get us some seasonality. See how that looked, right? And so every graph, like I said, follows this pattern. But hopefully, when I watch this video after doing the whole thing, you can't hear everyone in the background. So let's do it. Volume and activity. This is basically telling us how much real estate has been happening, and all we're really concerned about here is the height of the bar, and the proportion of red to grin. So the green is, the homes that sold, that means they closed. They went under contract our previous month, but they closed in September, and then the rest of it is how many went under contract, accepted an offer in that month.

And the red is total active listing. So how many listings were available for sale at any given time throughout the month, and that's the height of that bar. Now, what we can see is that active listings increased by 4% in September. We're gonna kind of talk about that. That plays into inventory. And that, basically, overall volume was up 2% from last month, but still down 7% from this time last year. And we're going to see that most are your metrics. I always say, or recently, I've had to say, you know, keep that in context, because we're coming off the highs of all highs, right? So let's move on to listings and pendings. This is a problematic theory slide. You hear me say this all the time.

This is the slide that talks about supply and demand. So what do I mean by that? Well, that's what I mean. So when the red bar, which is your new listings, is above the green line, which is what been under contract, what was taken off the market, you've added more homes to the market, that's what that means. Right? And when there's a gap, when the red bars below the green line, then that gap represents how many homes you took off the market and did not replenish. Right? So if we go to this month's data, we can see that we've been consistently adding supply lately. Let's make our little hmm emoji face, right?

So we've been consistently adding supplies since March, meaning we've added more home, taken off month over month, for some time now. Right? But it's still not enough. have to put this in perspective. If we look at our at a glance velocity slide, which is one of our first slides. If you ever present this report, and they've already seen it, you start with the attic glance. We not doing that today. And our month's inventory is still 2.5 months. Right? So a seller's marketed all the way up until five, but let's call it six months. We're very far away from the neutral market still. It's still very, very much a seller's market. So let's keep that in mind.

And supply and demand directly affects pricing, as we all know. So if you look at the home prices, Year over year, we're actually down a little bit, from 607 to 597 of our average price, right? But our comedian is still up, so that's 50% of the homes in Buncombe County were worth 460 or more. That's a lot, right? So this is next month, we're actually doing luxury real estate. You should totally check in for that. But how do you define luxury when your average price is around 600,000? You know? Maybe it's because I haven't made my first billion yet, but to me, $600,000 is the high average price.

So what we see here, and this is an important little addition here, is the trend line is still up and to the right. And even though it doesn't look like a hockey stick anymore, our prices are still increasing in the area. Okay. So, supply and demand directly affects pricing. Let's get some food for thought on this point. Supply is limited, even though it's kind of coming back, it is limited. We have mountains, we have all sorts of issues in our area that are gonna basically ensure that supply is limited, especially because demand exceeds supply, at least, in our area.

Now, if you watch last week's video, or if you were there, and if you didn't, it's on our YouTube channel, payments continue to increase. We went over kind of median incomes and mortgage rates to explain that briefly in the video. And so food for thought for tonight. Short term rentals may be a viable alternative to selling. People who would have otherwise sold to increase our supply are probably just gonna keep their home and long term or short term rental it, our panelists will. will give you a little bit more information about that strategy tonight. So we're going to briefly go over the next slide, so we have days on market. How long did it take to sell a home?

38 days average, across all price ranges, which is, you know, great historically, but crazy for us recently, but still, the median is 13 days. That means across all price ranges in Buncomb County, homes, 50% of homes, excuse me, went under contract in 13 days or less. If you have a listing and you're not in that situation, you may want to consider a price reduction, and if you're looking to buy a home and they have not had a price reduction, and they're above 38 days or so, the average, you might want to consider below ask offer. Contractor close, largely out of your hands, but how long is it taking homes to close these days?

It looks around 51 days, so 51 days after you go under contract, you should be closing, talk to your lenders or loan people, they'll have a better idea, and then finally contract to cash. So from the moment you list your home with the realtor and go live until the moment you sell, it looks like across all price ranges. That took about three months, 90 days, which is still pretty fast, right? But, as we all know, people who read the Ruiz Report and come to AVLmeetup, they're not average, right? So the median is 50% of homes listed, and then cash that check in 56 days or less, and you want to be there.

So this is a way to set expectations and have these conversations to ensure that everyone's on the same page. So, uh, if you haven't seen this slide, this is slide 4 of the Ruiz Report, and so when you're with clients or if you're interested yourself, you look at your price range. The report itself is the macro market, it's the whole county, but this breaks it down by price range, so you can get your micro market and check all those things out. Right, so I want to leave as much time as possible for our speakers, but we have two quick announcements. First off, if that was fast for you, if you haven't seen this before, the Ruiz Report training videos are now for free.

When you log on to the Ruiz Report, there's no charge whatsoever. You just put in your email address in your name, and I'll give you all this data different training for free. We have a video on every single slide, so yes, it does leverage the report, but that doesn't matter. The concepts are the exact same. If you want to pull this data yourself or use something else, don't worry about it. I teach you how to interpret the graphs and define all the metrics. That's really cool. So, if you want that, it's just the ReesReport.com.

And then the second quick announcement for all the Ruiz Report subscribers in the room, today, now, we just launched the Ruiz Report quizzes, and I'm super excited about this. Right? So, the way the report is useful is, if you know where the information is, and you know how to communicate it, right? So this is only gonna loop one more time, but you just quiz, take quiz. There's over 7.7 billion combinations, if you can believe it. I pulled from the quiz bank, and the questions change order, and that super, super cool feature is even when you're wrong, you could still learn. Right? So I pick the wrong answers from previous month's correct answers.

So even when you're wrong, I'm teaching you, yeah, that was wrong, but your choice was the correct answer for September 2022, in this case. And then I teach you where to find the information on the slide. So I'll first couple times taking the quiz if you're not familiar with the report might take a while. This is the best way, hands down, to learn the report. So that's all I've got. We'll stop sharing. Again, thanks for listening. I'm really, really sad. I missed this one, but excited for next month's luxury agents, and really looking forward to listening to this episode on our podcast. Thanks again, and I'll talk to you guys later. Bye. All right.

So at least we're getting part of the technology to work tonight. So, Uh... working on our hand motions here. Is it working? So we're gonna do some table topics to kind of get our focus on short term rentals. And so, if you're sitting at a table, if you're not at a table, if you get a clump of people, three or four people, or five, it doesn't really matter the size, we're just gonna do a couple of discussion questions to kind of set the stage and keep moving forward. And... I will read the question, without the slide, in the meantime. Oh, there it is, great.

So, big thing is, these have always tend to be a good thing, because everybody talks really loud, and nobody wants to come back to the meeting, so this time, we have a timer. When the timer is at zero, please help us out, just naturally wind down the conversation, come to a consensus as a table, and then that way, me or Ray Ray doesn't have to yell at you, which is a good thing for everybody. I mean, we don't mind, but... Timer's going. There's the question. As a table or discussion group, do you believe that STRs are contributing to the availability of housing? Set, go. Ding, ding, ding, ding. All right. One more. One more question. But...

Unknown [15:55] All right, so...

Speaker 1 [16:02] Part of the advantage of having a big group like this, of course, is the collective insider, the collective knowledge of the group. So, would love to know, I guess, if we do this in a part one, part two, maybe each table can choose one or two, like, one representative to, like, if there is consensus on whether it does affect availability, or if it doesn't, and so, each table quickly, excuse me, each table quickly pick one person, we're just gonna do a show of hands, it does affect, or it does not affect. So, 10 seconds, pick one person from your table that's gonna vote on behalf of the table. Yep. Everybody got somebody who's gonna vote on behalf of the table? Or represent...

Okay, so, if you think that short term rentals does affect the availability of housing, the table consensus is yes, raise your hand, if that's the vote. Okay. All right. So, don't know what percentages yet, we'll see if everybody votes. So it does not affect availability of house in. It does not affect. Okay, so not every table voted. So... no, sort of... gotta pick a side. This is not a negotiation. So, um, all right, roughly, I think it was, like, about eight or so table said it does affect, and I think it was three that does not affect availability. So, just super interesting to look. So, question number two.

Ray Ray Hicks [17:48] So table question number two is... Coming soon. da, da, da, da, da. Nope. Oh, there it is. There it is. Our short term rental is a sound investment strategy. Why or why not? And your time begins now.

Speaker 1 [18:13] We're gonna do, uh, the same thing as, uh, last time. Um, whoa. So, we'll do sound investment strategy first, as far as it being a positive thing. So, does everybody pick the person who's gonna represent their table? So if you think short term rentals are a sound investment strategy, table, raise your hand. All right. Yes, if it's a positive thing. Okay. Does any table come out with, uh, not positive investment, any downward thumbs? Okay. So there's consensus as far as that goes. All right, so we're gonna go ahead and move into the panel conversation then now. Big round of applause, please. Let's welcome these gentlemen onto the stage here.

All right, so what we're gonna do is, I'm gonna, we'll start with Drew over there, and just do, like, a one minute introduction, how you got it into real estate, and what you're currently doing now, and what you do inside of short term rentals. And one second. I think I have to unmute you.

Unknown [19:33] All right, go.

Drew Wyatt [19:34] All right, sound good? Awesome. So my name is Drew. I've been living in Asheville with my fiancé for about 12 years now, and we got started in real estate with a house hack inside city limits that we turned into a homestay. So we really focused on acquiring the right property that was really gonna work for us. We started a homestay, this cash flowing on average, around 2K a month, and basically leveraged that experience into consulting, design, doing some co hosting, and rental arbitrage, which is where you partner with multifamily or landlords, and essentially rent their properties and offer them as short term rentals or midterm rentals. Awesome. Thank you. How about you, Tom?

Tom Sherry [20:27] Hi, I lived in Asheville since 2006, I'd say, um, I've been in real estate pretty much my whole life. Started investing on my own in the early 90s. I'm dating myself, but had my real estate license here since 2007. I spent 8 years as a mortgage banker in Key West. My wife is a real estate appraiser. Her sister owns a real estate company in Key West, Florida, that my wife also works with, like, over 125 properties there. So it's kind of just been something we've always done.

Tyler Coon [21:06] Awesome. Thank you, Tyler. Hey, guys, my name is Tyler Coon. I'm the owner of Savvy Realty, and we moved to Asheville about five years ago. We started kind of the same way as Drew. We house hacked. It wasn't exactly our plan. But it ended up working out really well. It paid more than the mortgage. I partnered with a guy at a real estate school, more real estate agent. I partnered with a guy at a real estate school, and we started building a team together, and he owned Airbnbs. I started investing in more Airbnbs in the area. And I left that team in that partnership, to start a short term rental focused agency, basically, in team.

So today, all I do is sell short term rentals, and that's pretty exciting, I think. And so we cover all the way from the Asheville area, all the way up to the high country, and now have five agents and other states and areas that only sell short term rentals as well.

Speaker 1 [22:03] Awesome. All right, thank you, guys. I think that a good way to start this is short term rentals have obviously been a very popular investment strategy over the last few years. So it begs the question, does this market support more short term rentals, or are we maxed out?

Tom Sherry [22:23] I think, ultimately, a market's gonna tell us that. I would say that we are within a day's drive of half of the population of the United States, and if you take a look at the Asheville Airport, the expansion there, and more direct flights, more and more people are just going to keep coming here, and as the restaurant and brewery, and the rest of the wonderful outdoor activities that we have continue to grow. I think, um, there's room for it. I also think that the average and below average kind of units are gonna go elsewhere.

Tyler Coon [23:01] Yeah, I would tend to agree. I think we're shaking out kind of those lower average units, and the standards are coming up. So before, I mean, every cabin in Maggie Valley was a short term rental, and it was all Grandma and Grandpa's furniture, and that's slowly starting to get upgraded. We're not anywhere near the level of Gatlinburg or Orlando, you know, we put in a not so great movie theater in ours, and we're the only one in the area that has one, and it's led to a tremendous amount of bookings. And so, yeah, I think the area can support better short term rentals, I think, for sure. I don't know about more right now.

I think we are coming down in the number of listings, and that's helping for sure, but better listings. I think it can support tons of those.

Drew Wyatt [23:46] Yeah, I totally agree with that. I think that if you're coming into the market and asking the question, can we support more short term rentals? Answer is absolutely. We can always support more short term rentals, but that is always going to raise the baseline for the product that you have to be competitive with. So, if you want to come in, try to come in at a higher competitive level, and essentially, the bar will continue to be raised and tell the supply drops.

Speaker 1 [24:13] So all 3 of you are seeing that the, I guess it sounds like the floor is coming up as far as expectation from... You found that there's any, like, specific thing that you look for to make properties that you manage to be more competitive, or is it very wildly by property?

Tom Sherry [24:32] I think you have to offer an experience to the guest, an outstanding experience in that. You know, starts from, you know, the house and listing itself. It, you know, what's unique about it. Why would somebody want to come there? And then, from there? It's, you know, what are you bringing to the table as a management company, and whether that's, you know, amenities within the house, such as, you know, fire pits and hot tubs and things like that, but also, um, what else are you bringing to the table as far as, you know, offering a concierge service? What kind of experiences can they have at the house? How close is it to, you know, the things that they want to do?

Do you guys want to chime in on that?

Drew Wyatt [25:16] Yeah, absolutely. So I kind of feel like there are three tiers of leverage that can be applied to the profitability of a unit. And so, you kind of, your 1st tier is design, your 2nd tier is amenities, your 3rd tier is your core product, the core product being the house itself. And so with design, it's something that everybody needs to do, and it's something that can absolutely, like, elevate the performance of a unit, with amenities, a little bit more capital expenditure, a little bit harder, logistically, to fit those amenities in. Your property just might not be able to accommodate certain amenities.

You might not be able to have a hot tub, sauna, cool all of those things in the same property. And then your core product is gonna be the highest form of leverage. Obviously, the hardest thing to get, because you got to find a deal of, you know, a truly unique property. So I would think about it in terms of those three tiers and how much you can kind of exploit them. I think it's totally fine to be able to exploit the first two tiers really well, but always be looking for the strongest core product you can, as well.

Tyler Coon [26:23] Yeah, I think for me, these days it's just all about amenities. And so it's simple, right? I think people overcomplicate this. So when we bought our last property in February, and we just launched in June, all I did was I went, and I looked at every six bedroom that was within a few miles of my property, and I looked at what amenities they had, and then I just beat them. And it was very, very simple. And if I couldn't have beat them with that property, then I wouldn't have bought that property. And so, just go look in air DNA or whatever software you're looking at. And if you can beat the properties with the product, then you're gonna be okay.

And, you know, make sure that it's not something that's easily recreatable. I think that's really important. For instance, our property that we bought. There's a lot of six bedrooms around it that don't have any views. If that had been the opposite, if they had all had views, because my property doesn't have any mountain views, I wouldn't have bought the property. But I wasn't competing with a lot of properties with views. And so that unrecreatable thing didn't apply to that property. And so, for me, it was just important to do the research, and then go and beat them.

Speaker 1 [27:25] Let's talk about pricing. It seems like, I'm assuming with everything of the last few years, pricing has changed a lot. And so, I know you mentioned air DNA, but maybe you could speak on some other tools or other strategies that you have to price properties and to stay ahead of the pricing curve and start of trying to play catch up. Whoever wants to start, go for it.

Tom Sherry [27:45] I would love to, because I'm a nerd. I like this stuff. So, I mean, there's a lot of different pricing tools and things that are out there, whether it's, you know, price labs, beyond wheelhouse. I mean, there's tons of them. And they're dynamic pricing tools that will basically scrape travel demand data for each specific date of the year. So basically, you have 365 seasons a year for most of these tools.

So, um, you set your, you set your base pricing parameters as, you know, whether, um, you know, I'm put in rate rules such as what your minimum number of nights are, a percentage discount, you know, from being 7 days out, you know, 14 days out, 21 days out, and you, you know, you kind of put your discount percentages in there. But these tools, if you really get into them, they're only as good as the information that you start with and that you put in, which comes from your own market knowledge. So, um, you know, for example, uh, many of them will also have the ability to put in, um, comp sets within their, uh, within their tools.

So you can pull up and kind of take a look and sort of like Tower was alluding to, you know, you got to look at your competitors. And not every 3 bedroom or 6 bedroom place that's in the same neighborhood is the same. They're just not. So you need to see who your competition really is, outperform them, and put the tools in place. And none of these tools are, in my opinion, set it and forget it type things. So you got to have to also monitor, you know, what you're, you know, how far out are you booking? you know, what's your occupancy looking like? What's going on with your ADR and kind of compare that to your competition in the market?

And that is something that has actually become pretty much a full-time job. Our, you know, the company, we just sold our company, too, actually has a full-time revenue management team that does nothing other than look at this. So, you know, the days of, um, you know, just throwing something on there with, you know, in season, off season pricing and not worrying about it. You're you know, you're not going to be in this game very long.

Ray Ray Hicks [30:05] Drew Toddler, do you want to?

Tyler Coon [30:08] Well, here's what I'll say is so much of what Tom said is right, but I will disagree on a slight point, which I'm known for doing. And so I would say, and this is totally my own ignorance, right? And so this property that we launched recently is a really good case study and not, uh, believing everything that you know, right? And so sometimes, you don't know what you don't know. And so, a perfect example. We launch this property. We bought it in February, took till June for us to launch. My husband and I were in Hawaii on a cruise, and it was the first time I was ever not on a phone, no laptop, no email, no nothing. So my assistant launched Price Labs for me.

She used to help me run my property management company, so she knows what she's doing, but she got a little bit lazy that day, and she put no guard rails at all on my, you know, just under a million dollar property that we just invested 200 grand in. If I had been there, I would have been like, Are you crazy? We need to put the guardrails up, because I know everything about short term rentals in the area. And I came back to over $100,000 booked on just weekends, over $1,000 a night. And that is not what I would have put guardrails up, that would have prevented that. And we would have come way less, tens of thousands of dollars less.

So, um, test things out, go a little bit, don't be afraid to go a little bit crazy if you've put the money in to the amenities. What I'm finding right now is people are willing to pay for those. I mean, we're seeing $12,000 bookings for four days right now over holidays, and I never thought a property here would be able to get that.

Drew Wyatt [31:39] Drew, do you want to add anything to that? Yeah, absolutely. That's fantastic, by the way. And, yeah, so, I just want to add to that, essentially, you know, they tested something out and ended up meeting the market. And they could have potentially raised those prices even further. And so, in terms of pricing, I feel like the three things that you need to know, to manage any units pricing in any market condition, and any location, is you need to understand a dynamic pricing tool, and be able to make the customizations on it, you need to have the knowledge of that market, so that you can accurately make the customizations, and then you need to understand the concept of meeting the market.

And meeting the market is essentially just being able to test and make adjustments based on whether or not you're meeting the market at a certain lead time for your area. sort of piggybacking off of the pricing.

Speaker 1 [32:32] Assuming that you don't want to do this pricing yourself, um, we'll try to keep this one a little bit on the shorter side, but obviously, you all manage units for other people, so I was, if somebody was looking to hire a management company, what is the one question that they should ask, or the one thing that they should be aware of, to help, you know, sure, all three of you guys obviously manage properties and do very well. So how does somebody sift through, lots of good options to determine who's the best fit for their property or their personality, et cetera?

Tyler Coon [33:03] I don't manage property anymore. I sold my company, too. It was awful. Horrible, horrible business. Don't ever do it.

Speaker 1 [33:13] So, you just manage yourself, and if somebody does want to, would you go that route, or burn it all to the ground, burn it all to the ground?

Tyler Coon [33:20] Let Tom do it. He can wake up with nightmares. You know, he's 20 years old, he's got gray hair. I'm just kidding, but, yeah.

Speaker 1 [33:27] Well, Tom, Drew, do you have a way to cut through that, then?

Tom Sherry [33:31] To me, it goes back to just about anything else. Um, so, I'm gonna, I'm an analogy guy, so forgive me. I've probably read 10,000 contracts in my life, maybe more. I'm not a lawyer. So, when I need a contract review to hire a lawyer. Um, I went to business school. I'm just dangerous enough with counting in numbers to sort of get myself in trouble. I hire an accountant. How do I find those folks? Trusted referrals? So that's what I would do, is I would work with a realtor, or an agent, if you're buying something, and see who their recommendations are for property management companies, ask why.

Um, because, you know, if it's, well, they give me $5000 for every house I send, so I, you know, that's, that's, you know, I mean, that's not, that's not real, right? So find out why. And, you know, if you trust your agent, then you can generally, you know, trust their recommendations, and then I would just ask a lot of questions. And a lot of it comes down to, you know, is this property manager, um, that you're talking to, are they asking you about your goals, with the property, or asking what your expectations are. Are they speaking truth to you versus, you know, just trying to get a contract signed? So, you know, for me, that's always kind of a gut feel. Awesome. Thank you.

Drew, how about yourself?

Drew Wyatt [35:03] Yeah, I absolutely agree with that. Referrals, and I would just say, you know, get referrals from clients, ask for referrals from clients, as well.

Speaker 1 [35:11] Cool. So, obviously, you know, was that four years ago ish, maybe three years ago, when Asheville changed or started enforcing, maybe they didn't change, but they started enforcing their, you know, short term rental law inside of the city limits. There's obviously been rumors about that happening in communities all around town. Or all around the area. What are you all doing, if anything, to try to stay ahead of that, or to anticipate what regulations could affect properties that you own and where they're at, or is it just hope for the best and have a good exit plan if that changes?

Tom Sherry [35:45] I mean, personally, I just, I operate outside the city limits. In general. I've got a couple properties inside the city limits, and I play by the rules, and, you know, run it for 28 plus days. So, um, as far as, you know, trying to guess what's going to happen. Um, you know, good luck with that. But my personal feeling is that it's gonna have to be taken up in court by somebody with an agenda and some deep pockets to try to fight that. And even if they do, I think, you know, the city doesn't want it. So they're going to find a way, whether it's coming up with new rezoning classifications or whatever it is, I think they'll probably try to find their way to get what they want.

So I don't worry about it. I mean, I just, I play by the rules, you know? And I don't try to change them.

Tyler Coon [36:38] I think in our area, according to the Ruiz Report anyways, you could probably sell your place pretty quick in our market, and I am a firm believer that that's really never going to change for a lot of the things he said. Um, so, you know, why try to throw dart at a dartboard? It's a really highly investable area that really has a lot of exit opportunities if you have to sell your property later. But I think overall, if you take our market and compare it one to like West Coast, It's very underregulated. But even other larger cities, you know, it's one of the easiest areas to get away with regulation in. And so, is it predictable? No, but is it better than 90% of the rest of America? think so.

Drew Wyatt [37:23] Yeah, absolutely. And honestly, I think personally, it's been a great thing for me. The regulations in place in Asheville is what allowed me to have a competitive house hack. It's what allowed me to get my first start, because if this was just an open market inside city limits, my house hack would not be competitive. Because everyone is forced to have a shared space. I was able to create a very competitive listing in that space. And honestly, if you, you know, I'm looking at markets for arbitrage all over the country, and I'm looking for areas that have restrictions in place, so that I can learn the restrictions and work around them, because there's a lot less competition in those areas.

Speaker 1 [38:06] So, reviews, it seems, I don't have any short term rentals, but it seems to me, from what I've heard, is that reviews are... We can change them. I don't know. I'm on the, I'm not a fan of that investment. Transactions, man. Well, if you owner finance it, we can have a conversation. But with the reviews being a paramount, it seems a big deal, what are you guys doing to make sure you get good reviews? Is it just the experience, and that's it, or is there anything extra that you all are doing for your properties to ensure that you get the positive reviews that you're looking for?

Tyler Coon [38:38] Why don't we just go down the line, Tyler, you can go first. I think just being a human being with people, you know, we have people that are paying really, really high amounts on average on an average daily rate, um, and these are typically very reasonable people. It's why I don't like to compete on price, and I won't go to the bottom, because I don't want those type of guests, right? And so I'm going to offer a better product, and we're going to overivest in amenities to make sure that we do get the best guess. But, you know, our, we bought this property in our well went out in the first two weeks, and I had guests with no water.

Then directly after that, our hot tub went out, then our fire pit area that we built went out, and I still haven't done a refund yet, and I'm charging over $1,000 a night, and I have all five star reviews. So we've had all of those things happen, uh, and, uh, people are still accommodating, because I call them, and I just talk to them, and I say, listen, we bought this place, and unfortunately, the well just went out. The hot tub's not working or whatever's happening. And if you'll give me some grace, we're doing everything we can, it's just communicating with people, right?

You don't, you know, you can go in and, like, be the professional host or whatever, but I just call people like I'm their friend or their neighbor, right? And just say, hey, I'm having an issue here. Will you work with me on this? You know, is this gonna cause a problem? And most times people are pretty good about it.

Tom Sherry [39:57] I would agree. I do think that, you know, reviews can be the lifeblood of your company. And I think one of the important things is to get ahead of that. And, you know, it's going to sound like 101, but, um, you know, make sure your listing is correct and up to date so that the expectations of the guest match what what they meet when they get to the property. The other thing I would do is, you know, you should be communicating with them in some way, whether it's your property manager or your customer experience team or whatever it might be to make sure that things are going well. Hey, just checking in. you know, you guys doing good?

Because a lot of times, if somebody's unhappy, they might not tell you, but if you, if you're reaching out and asking, then they might tell you something that, you know, isn't, isn't going well, and you have a chance to correct it. And then once you correct it, you know, a lot of times that eliminates probably 90% of your bad reviews. Now, with a bad review, I would personally categorize them into two different categories. One would be legitimate and illegitimate. So, if you get a legitimate bad review, You got a learning opportunity in front of you. I'm sorry, you know, we didn't meet our standard or whatever it is that you want to say, and we're going to change that moving forward.

And the best way to, you know, in my mind, to respond to that is respond to that guest on that review, but also respond in the manner as though you're talking to the next guest that might be looking at it, so that they know it's not going to be a problem when they come. Now, if it's illegitimate, um, this is usually when I get called in, and, um, you know, I don't, you know, there are people that will hold you hostage trying to get, you know, make things up, you know, trying to get a refund and things like that. So that's handled in a different manner. Cool. Thank you, Drew.

Drew Wyatt [41:49] So yeah, totally agree with everything they said. You know, you want a liability proof your physical and digital listing. You want a liability proof, your communications, and always be staying ahead so that you can predict and kind of coax any potential issues out. You want to respond to them immediately. You basically want to treat this all like a system, and you're gonna get feedback, you're gonna plug it back into the system, fix those things immediately. Eventually the listings get very quiet. In the instances they don't.

It's typically the outliers of, you know, guests who are, you know, have some sort of agenda or are just having a bad week, whatever that may be, and that's why it's very important to have someone on your team, who is very familiar with Airbnb's terms and conditions, and also has very good systems and standards of how they respond to certain situations. You want to have all this stuff. Honestly, once it gets to this point, you really do want to have it scripted out, you want to stick to your script, and you want to know that on the back end, you're going to get any reviews removed.

Speaker 1 [42:51] Are you all doing anything to try to get away from Airbnb and verbo and having, like, generating your own traffic, or is there any concern, you know, with being held hostage by the platform, I guess? And how are you managing that risk reward, you know, conversation internally?

Tom Sherry [43:12] That's the fight of every property management company. I think. So the platforms are a necessary evil. And I should say knee evil. Some are more evil than others, I should say. can make it pretty difficult on you and, you know, certainly take the side of the guest in every situation. You know, we've been through the battles in the wars there. Um, but what you want to do is try to drive, um, drive your guests to book direct with you the next time that they come. I mean, that's kind of a basic thing, and it's gonna do nothing other than save them money, and then it puts you in the driver's seat for control of reviews, money, and, you know, everything else.

You know, the company we just sold to Avant Stay. They're, um, 40%. They're on 50 plus platform, I think, 65 platforms actually, and 40% of their bookings come direct. And that's because they've invested money into social media marketing, they've won awards, like the Shorty Awards for best, you know, use the social media, things like that. That's the future of this thing, if you want to try to, you know, grow your business and and, um, you know, beat the platforms.

Speaker 1 [44:21] Anything tad there, Tyler or Drew?

Tyler Coon [44:23] I think I'm trending the other direction, to be honest. I want to launch properties that book out for the next 12 months really fast, right? And I didn't really believe that it was possible before until we launched this latest property. And then I've been working with the most incredible designer who's actually sitting right over there, Ashida and Harshad, who, when they come in, and they design our clients' properties, and we overdesign. It's not cheap, it's not easy. But when we do that, they literally book out for 12 months in advance so quick and so fast. And then life is very, very simple after that. We get the best guess. We've pulled the best guess from the other listings.

People are paying the highest rates. We have very cancellations. I'm not hearing from them all the time. People that have $12,000 to spend on a four day vacation. They don't want to talk to you. They wanna do their own thing. And if the dishwasher's not working, they're gonna want. wash the dishes, right? They would rather just do their own thing than come complain at you. That's how they got to where they got to in life. And so, for me, I think I'm kind of just going the other direction. I think too many people in the industry are making a lot of work for themselves, and they want to feel like they have to put a lot more work into their short terminal than they really need to.

You should really be able to put it on autopilot after you launch it. And if you can't, then you didn't do enough in the beginning to design it and add the amenities that you need to, to be able to put that on autopilot later. Drew?

Drew Wyatt [45:48] Yeah, I'm the middle there. I totally kind of trend towards Airbnb as well. And I feel like if you speak their language and you truly understand their terms and conditions, they're almost always on your side. We're winning almost 100% of all of our resolutions cases, all of our disputes, review removals, any sort of stuff like that. You really just need to have people on your team that truly understand how Airbnb works, and how the terms and conditions work, and how to manage difficult situations that pop up. I totally agree that the future very well might be direct booking, because we don't want to be held hostage to policy changes.

You know, resolutions one thing, but if Airbnb decides to change their rates to 20% for hosts, or like they did, they tested maybe, like, six months ago or so, putting all the fees on the host for just, like, a week before they remove that, but that would be, uh, that would be pretty tough. That would be pretty tough. So I think direct bookings could be a great way to go in the future. You just need to, you really need to be able to spend for paid ads. You need to have that capital set aside.

Speaker 1 [46:55] Cool, awesome. So, we're gonna do audience questions next. Last question before we open it up to the audiences. Can you keep it short in one sentence, or one very short word? If you're giving advice, either to somebody else who's getting into the game or if you're going to look back to when you first started getting into the game. What is the information you wish you had, or what's pieces of wisdom that you would want to hear then. And let's start with Drew, and we'll go towards Tyler.

Drew Wyatt [47:26] Yeah, just learn everything you can, and try really hard until you got a seat at the table, and then stay alive, and push the ball in the right direction, until you're where you want to be.

Tom Sherry [47:34] That's good. I agree with that. I would say build a good team, trusted team of people that you trust, whether it's, you know, an agent or property management company, whatever it is, and, um, and listen to them and do what they, um, you know, suggest that you should be doing.

Tyler Coon [47:52] Totally agree with Drew and Tom and it would just be buy more real estate, like just buy. You know, we tried arbitrage, we tried all these things. But again, it's like you put too much work. you know? Like, you don't have to overwork at this and make it too overcomplicated.

Speaker 1 [48:08] All right, guys, thank you very much. Big round of applause. If you have a question, raise your hand. We'll get started.

Unknown [48:20] All right, Mike.

Tyler Coon [48:28] Four nights, yeah, for Thanksgiving this year. It's a six bedroom property. It's probably 20 minutes south of Asheville, and Fletcher, like, all the way down Mills Gap Road. And that property, honestly, like, it's not even the best. I mean, you should see some of this stuff, Ashida and Harshad design. Oh, my God. I mean, it's just incredible. And if you want to, you should go over and check out their portfolio because it's like, absolutely mind blowing. Mine is, like, way $150 wayfare chairs in a garage converted movie theater. That's way too cheap. And, you know, I downloaded our reservations yesterday and it's 197,000 from June to June. Nice.

Speaker 1 [49:10] All right, so we're going to repeat the question so everybody hears it on the next question. All right, question next. Yes.

Ray Ray Hicks [49:18] So if you had a crystal ball, where would short term rentals be in Western North Carolina in five years?

Tom Sherry [49:26] I think they're gonna be going strong, and I think, um, the experience level of the guess is gonna be elevated a bunch, and I think the homes and, um, the properties that are available out there are gonna be much better in what they are now, 'cause people are gonna have to do it. Indoor pools and lazy rivers.

Unknown [49:47] Right. Yeah, go for it, Allah.

Ray Ray Hicks [49:52] So in terms of design, how do you make sure that your design is set apart, and do you outsource that, and how do you do that?

Drew Wyatt [49:59] Yeah, absolutely. We have an in house designer? That would be Lily sitting over there, under the flower wall there. And, yeah, she's a fantastic designer. She's done about eight new builds in the past year, and they've all been performing fantastically. But I really do think it comes down to time and capital. So, if you have, you know, if you need more time, or if you need more capital, you just need to figure out whether you're going to outsource it, because you might have all the capital, but you might not have the time to, or the skill to be able to do that.

So, I think there's no issue with outsourcing design is not going to be, the fee on the design is not going to make or break your cash on cash. So definitely outsource it if needed.

Tyler Coon [50:47] Do you guys want to add that? We didn't outsource the design. We did it ourselves, because I met a shooter, like, a week after. And this is why there's such a big gap in between when we bought the property and when we launched it. So it would have saved me money to outsource it. Plus a lot of time, because we spent weekends and weeks and days and nights and a lot of time. And I could have actually been working instead making money. And not only would I have paid off the 15,000 in mortgage that I paid, basically for that time sitting offline. Um, but my life would have been a little bit better too.

Tom Sherry [51:23] We use a, we have both in-house and outsourcing design teams. I actually have a preference for a local outsource design person here in town that we use.

Unknown [51:35] Question.

Ray Ray Hicks [51:37] For each of you, what would be your number one value ad? Hot tub.

Tom Sherry [51:43] I would say hot tub, and probably the most economical is a fire pit.

Drew Wyatt [51:49] Okay, so if you're going kind of crazy, I would say pickleball courts seem pretty popular right now. Um, if you, here's a sleeper that everybody should be paying attention to, uh, cribs. You can filter for cribs, and everybody needs cribs. People would prefer a crib over a pack and play. Uh, go ahead and search Airbnbs available in the city right now, see how many is available in inventory, and then filter for cribs, and see how many are available.

Unknown [52:21] Good insight.

Speaker 1 [52:23] All right. Any other questions? Yes, in the back backpack.

Ray Ray Hicks [52:30] So, wonderful information. Thank you. But if you are talking to someone who's maybe investing. for the first time and struggling to kind of gather all that capital for design and all those external resources, what information would you recommend to someone getting started for the first time who might not have access or ability to use some of the resources you mentioned?

Tyler Coon [52:51] I would say, for me, it's find a really trusted source of somebody that you can work with that knows what they're doing, right? You're already in the right room. I mean, there are dozens of people here that you could probably go ask what their experience has been. I've certainly made mistakes. A lot of the success that we just had was on accident. I've already admitted that, right? Um, and so go find out what their experiences are and try to learn from them, but don't be scared of making mistakes. I would say mistakes is what got me to where I am today.

Um, and I wouldn't be, uh, you know, looking at the type of portfolio that we're gonna have if we didn't make the mistakes and failures of getting to where we go. I would also mention, like, don't just go down the road of partnership too easily, because I lost a lot of money, a lot of money, emotionally invested, even positive experiences with partners, left a lot of money on the table because of emotions, or you like the person or whatever. So if you can at all, try to just start it on your own, because you're gonna end up there eventually anyways.

Unknown [53:55] Do you guys want to add to that? Transactions.

Drew Wyatt [54:01] Yeah, absolutely. I would recommend, if you're getting started, and you're hungry to make some sort of opportunity for yourself, but you don't have the resources yet. You don't have the knowledge yet. Or, you know, a lot of these resources are expensive, you know, air DNA. extremely expensive. But there are ways to get that stuff for free. So you need to reach out to somebody who's a little bit further down the path. I would start with as many free education resources as possible. I would stick to YouTube. I would look at Sean Rocky Jich. He's a great free resource.

I would look at, you know, obviously, Roebuilt, is a great resource as well, just for giving you all the baselines of, you know, how to open single family short term rentals. And then I would start, once you kind of have some skin in the game, in terms of time invested, I would start looking for people in communities like this that might already have a few rentals that might already have some more knowledge that might already have access to these accounts.

I've given access to my AirDNA accounts to multiple friends, and, you know, I'm more than willing to help people, uh, you know, figure out if a property, you know, let them look through the AirDNA, you know, whatever resource we might be able to share for free, uh, I would absolutely do that, because, you know, everybody was there once.

Speaker 1 [55:19] And the other thing, I'll chime in, make a shameless plug. If you missed the last year's AVLmeetup on short term rentals, the conversation about the floor raising, as far as the quality of the product, was discussed for a large part of that conversation. We had Graybeard rentals in Carolina mornings here, and they both hammered that point over and over. It's the quality of the rental is going to have to improve very quickly, because all of the bottom ones are gonna, you know, kind of get chipped away at. And so, you know, re listen to that one or listen to this one again. All right, Joyce, question.

Ray Ray Hicks [55:56] For a large Airbnb, So five bed, four bath. What marketing tips would you recommend she highlight to make sure she captures the right guests? And what amenities should the home have?

Tyler Coon [56:10] I really like creative occupancy. So depending on the size of the house, which I think, one of the questions that was on there was, like, what are the best things to look for in size for me? I'm looking 3,000 plus square feet every time. Our lady's house was 5,500. So I want to find little pockets of creative occupancy, a place where I can put a daybed in a trundle, and I can decorate it, as if it's a little reading nook, or maybe, like, a couch, but they can then flip it over into an occupancy of two, somewhere in a corner or something. But honestly, the best person I talk to is Ishida over there. She's the absolute master. at Airbnb design, like hands down. No offense to anybody else.

We gonna have a designer fight club tonight, actually. It's the after party. That'll be meeting in December or something.

Speaker 1 [56:56] Well figure it out. Perfect.

Tom Sherry [56:58] I would say you need a larger place to congregate, um, outdoor end indoor. You don't want to have, you know, occupancy for, say, you know, 12 people and only have a dining room that sits, or, you know, a kitchen table that sit six. Same thing for outside, you know? Things like that, a lot of times are going to be weddings and family reunions and things like that. So people are going to want to hang out together, and a lot of times it's going to be with people that haven't seen each other in a while. So, you know, a lot of times you're going to get people that are in there for special occasions.

So you want it to be special and you want them to be able to hang out together, and that's where, you know, a large fire pit, a large outdoor seating area, um, game rooms, things like that, um, go a long way.

Drew Wyatt [57:45] Yep, I would mainly just, uh, kind of emphasize the game rooms for large family spaces, game rooms, do super well, especially if they are stacked with other amenities like hot tub, pool, if it's there, you know, you could throw in a sauna. And for larger properties like that, always make sure that you're paying some extra love to the primary rooms, you know, because those are typically the people that are bringing the money to the table. So just making sure that there's a suitable space for at least two or three parties that are actually bringing the money to the table to stay. I think that goes along the way.

Speaker 1 [58:22] Right. Maybe two more questions, depending on the length of the question.

Ray Ray Hicks [58:27] Go. What are some examples of the concierge services offered exterior vendors or experiences?

Tom Sherry [58:35] So, for example, we offer private chef service. We, um, partner with some outdoor adventure companies, I can do canyoneering, and, you know, waterfall, you know, repelling, and all that kind of neat fun stuff that people want to do when they get here. We've partnered with Biltmore for discounted tickets, things like that. Our Key West business actually does have a full-time concierge service that, um, I mean, we'll do everything from, you know, golf cart rentals to, you know, booking, you know, restaurant things, and, like, and we looked at that here, and quite frankly, we just, financially, it just didn't work.

Speaker 1 [59:17] All right, do we have a last question, if it's quick? All right, last question. Yes.

Ray Ray Hicks [59:23] Do you allow pets and parties? Always and never.

Unknown [59:28] Yes. Yes, yes, yes.

Speaker 1 [59:35] Yes, pets, no parties. Cool. All right, thank you guys so much for being here. Big round of applause, guys. Thank you. All right, so next month, we're going to be talking luxury real estate here in Western North Carolina. Hope to see you guys here, uh, first Tuesday in November. Feedback is a gift. We'd love to hear from you. Have a great evening, everybody.