WNC's Short Term Rental Market

Speaker 1 [0:00] And so right now, same story. Fourth of July is wide open for a lot of folks. So that used to be guaranteed sellout. You're not guaranteed to be on the 1st page anymore. You're not even guaranteed to be seen on Airbnb except for that successful launch. The successful launch is the most important thing because that's your window. Your 7 to 10 days on Airbnb and verbo to get that artificial boost to get bookings to show that you're going to meet their guests, Airbnb guests where they are. Because if you miss that window, you're on the last page. So we're going to go over the market data for Buncombe County in May, right? So this is all maze data.

I've been doing this 63 months now, which is kind of crazy. started in the pandemic. So March of 2020 was my very first meeting, or report, rather, real estate was not an essential service, so that was fun. It turned out great. So our goal is essentially twofold, right? Really quick, we're trying to equip everybody to become the local economist of choice through training in these slides. So by the end of this, you'll be able to interpret slides, tell everybody what's going on the market. It's easy. So quick primer, our first slides are called at a glance. And this is how it works. On the left, you'll see there's a big number, and that's the number for that month.

On the right at the top, that's our month over month. So for this purpose, it's April versus May. What happened? And that change. And then at the bottom, it's year of a year, May 2025 versus May 2024. Then there are two arrows, and they serve two purposes. Up and down is increase and decrease, just like you think, but then the color tells you if that is directionally good or bad for that metric. We're going to get that tonight. So, at first it's at a glance activity. What happened in the month of May, at the highest level, the most important stuff, right? So new listings. There were 38% more new listings in May than last May.

That is a serious increase in new inventory of sellers thinking it's a great idea to sell. So that's the supply side. Now, in the demand side, which is under contracts and home sold, you'll see a year over year decrease in homes that went under contract in May of 4%, and a 16% decrease in homes that sold. And it's important to remember the distinction that a home that sells in a month win under contract in a previous month. So the home's closing in May went under contract in March or April, more or less. So that's a lagging metric, and the under contract is kind of telling you what's coming for the future.

So year over year, we're seeing these numbers at the bottom, and here's how we break it down. There is more for sale, and there is less of it selling. So that's what happened in May. All right? So at a glance velocity, how is the market moving? What are we doing with all this inventory? We do the same exercise. Median days on market, And so we all remember from our stats class. If you take all the days on market, line them up from the quickest to the longest, and pick the middle number. That middle number is 15, and we know that 15% of the homes that went under contract in the month, did so in 15 days, or sorry, 50%, did so in 15 days or less. But that is an increase of 36% year over year.

Months active listing. This is a fun stat you can only get from us. That is, all of the homes that were available for sale at any given time during the month. If you log on right now in your price range, you might see that there's 12, but throughout the month, there might have been 30, because they're taken off the market, right? So this is all of the inventory that happened, and you'll see a 60% increase here over here. Finally, month's inventory. This is a fun stat. Month's inventory, I always liken to looking at your fridge, right? If I open my fridge and I look at the food and I think of how much I eat, when do I need to go grocery shopping?

So that's the idea of month's inventory for real estate. If we did not add any more homes, but we continued selling homes at the same rate, how long would it take for it to run out? You'll see that we're at 5.8, so let's call it six. That's smack dad in the middle of what we call a neutral market. We have been in a crazy strong seller market. We've been in less than one month of inventory for years, and now we're in neutral, right? So that is a 113% increase year over year. So back to those arrows. How is it that more listings is green, but more inventory is bad? Remember, that's what we talked about, how the color kind of, like, changes, and it might not make sense at first glance.

But so active listings used to increase, because people thought it was a great idea, but they'd come right off the market. People would buy them. So that's a good thing, because the market is from the seller's perspective, right? What's happening with inventory turnover? But the fact that months of inventory is increasing means that more of it is staying longer. And so that's bad. It's bad for the sellers if there's more inventory around, not that there is more inventory. Same exercise year over year. What does it tell us? There is more for sale. Less of it is selling once again, and importantly, it's taking a lot longer to sell it. Right?

So, finally, this is our last at a glance slide, we're going to talk about pricing. So flanked on the left and right is the average list to sale, and then the average original list to sale, and there's a very important distinction there. The list to sale is based on the sale price at the time the offer was made, and the original list to sale is your first stab at the market. What you actually came at before you had to do price reductions. What we're seeing is, if there is no price reduction on average, across all property types and price ranges, probably looking at a 5% haircut.

And even when you get an offer, probably looking at about a 2% haircut, and even still, both of those metrics are off year every year. Finally, average sales price. This is a shocker, hasn't happened in a very long time. We're down 11%. year over year. And that's just made in May, right? We're going to get into this a little bit, but that's a first. Finally, same exercise. For those at home, we have three red down arrows. And seller pricings expectations are stuck in the past. That's what's happening. That's why it's taking longer, and that's why there are more reductions. And prices seem to be taking a hit at this point. That hadn't been happening. We're gonna talk about that a little bit.

So let's just kind of break it down. This is our year over year summary, right? So this is just going in order of those slides. We have 38% more new listings, that's inventory. 16% less sold, 4% less when under contract. We had a 36% increase in the time it took to sell. We had a 60% increase in how many listings were available, and 113% more months of inventory. We had a one% reduction in average list of sale, 11% reduction in average price, and a 3% reduction in average, or original list of sale, is a lot of information, right? So here's what we're taking out of it. This is supply. The supply is going up. This is demand. The demand is going down.

And this is what's happening as a result of it. More or less, right? So, let's dive in just a little bit deeper. We're going to move to the graphs, or as I like to call it, the pretty shapes and colors, right? So if your eyes glaze over, you don't like math. I got you. We're going to start with supply and demand because as far as I'm concerned, that's kind of all that matters. Right? This slide, this is my favorite slide. It tells the story of supply and demand. So we're going to come back to it, but this is what it means. That red bar, in this slide, is new listings. That's inventory. How many new listings went live in that month. And then the green line is homes under contract.

So that's what you take off. That's demand. How many homes went under contract in that month? As you'll see here, I've highlighted the yellow, and that's telling me that I've added more. When the red bars above the green line, when we add more than we take off, we've added to overall inventory. And when it's below, then we've taken off inventory. We've reduced our overall supply. So, let's look at this graph with everything fuzzied out except the last 15 months. Does anyone notice something? Is there a pattern? We have added inventory for the last 15 months, and more than that, but just from this graph, we've added inventory the last 15 months.

And the preceding five months, if I was to draw a cool line, it would look like that. That is a steep, steep, steep increase in inventory compared to what's been happening in the last 15 months. So how's that affecting home prices? Right? Red line is the average. Green line is the median. Again, remember, the average is you take them all up, you divide them by how many there were, and that's that. So the fact that the average is higher, it tells us that our high end market is super strong. Expensive homes are selling, and they're dragging the average up. But the median, again, you line them all up, pick the middle one, 50% of homes were worth $505,000 or more in May.

So, we don't look at month over month for home prices. We kind of look at trends. So if I were to add a trend line, that's what it would look like. And so that trend line, I would say it's trending down slightly year over year. That's that best fit, right? It's like flattish, but it's flat down right now. And the supply increases, unlikely to help that. That's my guess, right? Unlikely to help that. So, three takeaways. One, supply is currently beating demand, and prices seem to be responding. They have not been responding. They've just been increasing, but they seem to be responding as a trend. Two, pricing accurately seems to be getting much harder.

Now, you look at the median when it's like a week or two weeks, depending on the price range, then they're getting it right. So it just seems to be getting harder, because a lot of people are still going under contract that first week. In fact, our amazing co host, who I can't find, went under contract the first week, he just listed his home.

Unknown [9:09] Three, let's dig a little deeper.

Speaker 1 [9:12] So this is all the price ranges. That's what this slide is. This is broken down by all the relevant price segments. And we're going to go back to that month of inventory. Remember, we described it. Point is, seller's markets green. Neutral has no color, and a buyer's market is red. So, what you'll notice is, below the median, we're still in a seller's market, but I have a nice little warning sign, because we are flirting with neutral. We are on our way there. And above the median, we are at neutral or buyer's market. And I put the warning sign again, because we are floating. We are floating, or flirting, rather, excuse me, with buyer's numbers, buyer market numbers.

So methodology, how do we calculate months of inventory? You take all the active from that month, and you divide it by, importantly, the 12 month pending home average. 12 months. So this 5.8? I bet you, if I change a little software in the back and divided by the trailing 6 months, What's been happening in the last half year, we'd probably be at a much higher number and probably closer to a buyer's market. And if you're in the game right now, then you know that, most likely, because it's harder to just sell a home, you are having to make concessions. You are having to reduce the price. There are not multiple offers site unseen on the first day. We are going to a new market. All right?

So, it's probably not a bad idea to start studying buyer's market strategies. That's what I would say. Like, this is a long enough trend to say it's happening, right? Um, that would be my advice. So, if that went quick, and if you want to learn how to do this, the price is right on that too. It's free. You can sign up at resupport.com, I've got videos for every single slide we went through and it describes how it's done and how it relates to the report overall. And so with that, we'll get it to the 1st table question. Remember, scan the QR code at the top. As you vote, it'll pop up live, and then we'll get Rodrigo up to field your questions and pass this cool catch box.

So the question is, fiscal year, 25, quarter, four. We want it to sound cool, but basically 4th quarter, right? Do you think that Asheville and Buncombe County is in a buyer's market, a neutral market, or a seller's market? We're going to give you 5 minutes, bring you back, get all the questions.

Speaker 1 [0:00] All right, welcome. So, just to kind of get the juices slowing really quickly, sir, we'll start here and go that way, just tell us just a little bit about yourself, what you do, and we'll go from there.

Gay Weber [0:10] Sounds good. Glad to be here. My name is Gay Weber. I'm the COO of Carolina Mornings Luxury Vacation Rentals, and we manage about 163 properties within an hour radius of Asheville as professional managers.

Kyah Ebert [0:24] Gay is also a veteran speaker. He has spoken once before, very early days.

Speaker 1 [0:30] So welcome back, sir.

Kyah Ebert [0:31] Hey, everybody, my name is Kai Ebert. on a 22-year-old real estate investor, and I focus on my vacation rental company. Me and my business partners have 50 units at the moment, some of which we lease, so we arbitrage, some of which we manage, and then some of which we own.

Tyler Coon [0:47] Hey, good evening. My name is Tyler Coon. I am the owner of Savvy SGR agents. We're a conglomerate of short term rental agents. We're in 25 markets today. I personally am here in Asheville. I've been here for about 6 years. All I sell is a local real estate agent in short-term rentals. Done about 250 deals here in the last six years. Awesome.

Speaker 1 [1:08] Awesome. All right, so we'll do the same order. We'll end up zigzagging. Well see what happens. All right. So the first question is just kind of, we're gonna kind of come out swinging, right? So we just, we went to the stats, we see that the market is very much changing. With the market this uncertain, why stick with short-term rentals at all? Like, why not pivot to long term, or midterm, maybe even furnish rentals?

Gay Weber [1:27] That's a great question. Why not? Right? Follow the money. answer. I'd say that it all depends on what your needs for the property are. If you're using the property yourself or your family is, you have use needs that prohibit a long term rental. Well, then there's your answer. But if you have the ability to pivot right now, and you can get better return. I would do so. There's no reason to stay in a short term right now. You can always pivot back later if you need to.

Kyah Ebert [1:54] So, I would stay in the short terminal market because I've been building a skill set over four years. I'm not a property manager. I don't do long term rentals. I don't do commercial deals, I do vacation rentals. And so I don't want to get out of a market and start a business that I don't know nothing about. I would rather be greedy when people are fearful and continue to grow my business.

Tyler Coon [2:15] Yeah, I kind of agree with Kaya there. Um, I've been in short term rentals here for six years now, and ultimately, with the type of short term rentals that we're doing, which are kind of like these resort style, um, you know, like they were talking about before, uh, these short term rentals. I think they're incredible, and they're bringing a lot of people to the area as well. So, yeah, short term rentals for us, for sure.

Speaker 1 [2:38] All right, Tyler, we'll start on your side and come back this time. So obviously a lot has changed in the last 6 months or 8 months now postal lien. As you're looking at your business and kind of how you guys are selling it and maybe the clients that you're working with. Could you highlight maybe one or two most prominent changes that you've seen in the short-term rental market?

Tyler Coon [2:57] Yeah, it's increasingly becoming more and more difficult to find a good deal. Um, but that's what we've been selling for years, right? Is there's gonna be a limited amount of these deals in Asheville. And we're already creating contingency plans for, like, when am I gonna leave Asheville, right? Because ultimately, I think the inventory is what really restrict short term rentals in our area. There's only gonna be so many good ones, build, especially for larger short term rentals that are maybe five, six, eight bedrooms. There's so few of those here, and builders aren't gonna build them anymore. So we're gonna continue trying to kind of dominate that market.

And I think big groups are coming to the area. We've seen that time and time again, but, yeah, it's becoming harder and harder to find a good deal.

Kyah Ebert [3:39] Cool. Yeah, so it's definitely becoming harder. I was talking to Mitch Stay, who's a builder here, and I think if you want to succeed, you need to either be competitive or you need to be creative. So you either need to be creating the products that are 1% of the market, so you can take over the market share, or you need to be getting creative, finding a property with land, finding an extra ADU, getting in on a deal that has value ads so that your mortgage is lower, so you can cash flow more. So those are my thoughts.

Gay Weber [4:05] Yeah, the short term rental market right now is going through a real glut on ADR. And so any decisions that you make have to be based on the short term reality of that. I do believe that Asheville has staying power. I believe that it will stabilize and come back up in the future, but if your horizon is short term, then it's not a great investment model right now. If your horizon is longer term, as a good investment, then I think that there's still a lot of opportunity for you.

Speaker 1 [4:34] That is probably a great truism for real estate in general, right? Like, if you bought it in 2000, 2007 or eight, you'd be doing great right now. But 2009, 10, maybe not so hot, right? Um, awesome. So let's this one, let's do a little bit more digging into the answer, sir, all right? So interest rates are high, it is hard to find these cash flowing profitable deals. What are some of the more creative ways. Kind of, you kind of, like, touch on a couple of them, but what are some of the more creative ways that this is happening? Are you seeing people do this with conventional loans and just a huge down payment? Are they doing DSCRs? Are they finding creative solutions? Kind of talk on that.

I know you got... Yeah, we'll start...

Gay Weber [5:13] I'm gonna pass. We don't do any acquisition. We just manage for folks that already own. So they come to us under contract. It's about the earliest that will engage. So just for fun.

Speaker 1 [5:24] Yeah, just for fun. So the newer clients that are signing up, are you aware of how they got the property? Like, is there an intake?

Gay Weber [5:31] No, no, we really don't dig into their financial situation. In that sense, we allow them to, once they're under contract or they proceed, we actually like them to be 30 days ready before they come to us. So that means that we can consult with you early on, but we can't spend a lot of time until the home is furnished, and basically almost ready for guests. So that's yeah, that's kind of our entry point. Let's dig into that just really quick.

Speaker 1 [5:54] So people have to come to you ready to go. That's the business model. Do you have advice, consulting anything to get them there, or you're like, if you're not ready to go, we're not for you. My works, all right? So, yeah.

Gay Weber [6:07] Pretty close to that. We've been doing this for 28 years. I've been with the company for 13 years. We've been shopped. We've spent hours and hours, weeks, months working with folks, and then go off and do it themselves. At the end of the day, yeah, you come to us, and we'll give you best practices, we'll work with you to get you on the right track, but until we're under contract, you're not gonna get the secret sauce.

Speaker 1 [6:28] So, fun, the guy, I think his name, Jordan Belfort, the wolf of Wall Street. He has this book called The Straight Line method or something along these lines, right? He's always like, everyone thinks I'm the most convincing person on the planet. Right? But he's like, but really, as soon as I realize you're not interested, I leave. I'm only interested in talking to people who are interested. So that's your model.

Gay Weber [6:46] Yeah, more or less. I mean, we are the longest operating short term rental manager in the area. Um, we believe that we're the most successful based on key data dashboard, uh, you know, metrics for our area. And so we have a program. And if you want to join our program, we'd love to have you. If you don't want to join our program, that's fine too. We're not worried about that. But really, at this point for us, it's optimized that when you are close to being ready to go live. Again, we can give help, but we're not going to come in. The days are gone for us coming in and fully furnishing your home for you. Right? At this point, we got 58 employees, 163 homes. We have a lot going on.

So if you want to join us, we'll help you, but you have to do a lot of the footwork to get within 30 days and then we'll help you put all the final touches on it, wrap up the final parts, and then we'll launch it, have a successful launch, because that's the most important part.

Speaker 1 [7:41] All right, so on the opposite side of that spectrum. How are we hustling deals over here? What are the scrappy, what are the scrappy ways to get in the game?

Kyah Ebert [7:49] Yeah, so I do buy properties, so I can definitely help. So, if I want to dig really deep, I can share with you guys a deal that I absolutely love. I think it's one of the best deals that somebody could get into. I went into Facebook groups, and I found a property in Weaverville that had a separate 250 square foot ADU. We bought it for 182,000, it needed everything. I needed plumbing, needed floors, needed a courtyard, so it was a huge value ad. And so we went in, we made the ADU, 450 square feet, and we did the works, so we put the floors down, we made it look as pretty as we possibly could. And because we got in so cheap, and so I wanted to explain this as well.

So we got private lending to do the deal. took us a year. We collected all of the income, and then we got a DSDR loan. So instead of looking at me, and I was 20 years old at time, with a year of documented income, and them saying, We're not gonna give you a loan, they looked at the actual income that the asset was producing. So they gave me the loan for it. I paid off the private investor, and our mortgages, 2,250 a month, and both properties combined are doing $10,000 a month gross. And so, I got really creative. I got really scrappy. October, we had $20,000 in bookings and reservations until Hurricane Helene hit. Uh, so, but that's one of my most favorite deals.

I think if you want to get scrappy, uh, figure out how to get the money to do the deal, and then after a year, uh, show that income and basically get a DSCR loan. I have a couple of lenders that I work with as well, that I'm fine to shout out if you guys ask in the FAQs.

Speaker 1 [9:16] So real quick for everyone at home, DSCR, debt service coverage ratio, are there any lenders in the house? A raise of hands, please. Talk to these people. They may be able to explain a little bit better.

Unknown [9:26] All right, sir.

Tyler Coon [9:28] I feel like Kaya, your tagline should be like, just go do it. Right? Like, because that's what we've seen this kid do. Like, everybody in this room is so jealous of what you've done at your age is incredible, dude. So I think, you know, you asked, how are people buying right now? You know, I've probably sold 80 short-term rentals in the last year. Most of my clients are buying conventional, 10% down, second home loans. There are some creative relationship bankings that you can do out there, like Huntington Bank. Yeah. The mic a little bit closer to that. Oh, yeah. Sorry. Uh, yeah, there's different relationship banking that you can do out there. Just call as many lenders as you possibly can.

I found 5% down second home loans recently, for anything under the conventional loan limits. Um, so there's a lot of different ways to get the deals done, but, you know, it's funny, I was called out on a podcast recently online that said, you know, I hope Tyler doesn't hear this, uh, but ultimately, to go into the Asheville market anymore. You need $150,000 for design and amenities. And we've certainly kind of upped the game here in Asheville. I think we're getting some of the best vacation rentals in the country, to be honest, to be frank.

We're seeing ADRs, 2,600 bucks a night, you know, that I just booked yesterday on my property here, that you wouldn't get oceanfront, you know, anywhere in the country. So I think we are kind of leveling up the game here, but that is pushing out, you know, where you do have some opportunity to come in and maybe buy something that's a little bit more average and just kind of throw it on the market. I think the opportunity's falling away.

Speaker 1 [10:58] Well, Tyler, we'll start with you. And kind of, as I mentioned, I remember, two years ago, I think you're on the panel and talked about it. It was that big push. It was like, if you don't make an amazing property, you're just kind of kind of fall into the noise, so you have to stand out, it seems like you've been doubling down on that since then. In that thread, might be hard to answer, like, how much it might cost to upfit STR because of all the variables and sizes. But maybe if you can't give a number on what it would cost, What are the, like, must haves that no matter what type of STR you have, what are you gonna include?

What are you gonna budget for, and what would that conversation look like?

Tyler Coon [11:33] Yeah, it used to be. You had to have a hot tub, right? We're in the mountains. And now it's like, you have to have a sauna. I think one of my partner is Harshad, who's sitting over there, told me the other day, there's 9 pickleball courts now in Asheville, right? One of them is at my property, which I recently redesigned. So to give you an idea of what that costs is $300,000 nowadays. But, you know, I was really scared to pickleball for a whole design. So I redesigned my property that I bought in 2023 with a Shita who's sitting over there as well. And I was nervous, right? Because it had just reappraised for one. 1175. trying to pull PMI off.

So then we put 300,000 into the property, and you guys may have seen this online, if you follow me. And we ended up getting the reappraisal back on the refi at 2.19. So I was able to pull out 750,000 out of that property, which funded our next 3 deals.

Speaker 1 [12:22] So just for fun. Let's explain some of these terms. What does it mean I want to get rid of PMI? Why are we refinancing? What's happening here?

Tyler Coon [12:29] Yeah, so basically, you know, after 2 years, you know, I did a 10% down 2nd home loan and with the bank that I was with, they required me to have private mortgage insurance, which is a couple 100 bucks a month. I was interested to just see what the value is. Also, I knew I was going to go into this design. So I wanted to have a case study. What is it worth today? I put 300,000 into it. What is it worth tomorrow? We ended up gaining a $1000000 in value, which was, it blew our minds. We were, Shita was driving the car when the appraisal came in. She just about crashed the car in the highway, driving to Asheville. I swear to God, we went over 2 lanes. So ultimately, what else? What other terms?

Speaker 1 [13:07] No, no, yeah, so PMI they generally want? 20%? Yeah, you got to get to 20%.

Tyler Coon [13:11] So basically we had to get the reappraisal, you know, to above an 80% LTB. Right.

Speaker 1 [13:17] So the basic math is that you should be getting a multiple of the investments you're putting back in your property so long as you're doing it right. And so that was your big concern. Like, will this get us that multiple to get us that?

Tyler Coon [13:27] Yeah And ultimately, we didn't really do a lot to that property. We added a pickleball cortisana. We did really good landscaping outside. We did add 900 square feet, but 900 square feet doesn't equal a 1000000 dollars. So ultimately, um, we've been asking ourselves this question for a few years, as people do these bigger and bigger design projects, is it worth it? Is it gonna come out on the real estate value, wall murals? and nice bedrooms and all the things that we're doing. And ultimately the answer is sometimes.

Speaker 1 [13:55] Yeah, so that was like the heart of the question, right? Like, if you think, like, a better backsplash will just really do it for you. Maybe not, right? Maybe not.

Tyler Coon [14:03] Yeah. But maybe, you know.

Speaker 1 [14:04] It's difficult.

Kyah Ebert [14:05] Kaya, are you installing $300,000 pickleball courts? Um, I have not done a pickleball court yet, but I probably will because competition is increasing. Um, uh, I will say, if you guys want to know, like, rough numbers, this is gonna be super, super rough. But if you're doing, you know, a larger property, more high scale, over 3,000 square foot, if you get really scrappy, you're probably in the 85K range, and if you're going all out, you're probably in the $200 to $250,000 range, depending on how much design you're willing to do, how much of the work you're willing to put in yourself.

And then, I guess for, you know, some properties that I do that are smaller footprints, you know, like my tiny home, for example, you know, obviously the hot tub, the sauna, those are big expenses, but I would say you're probably looking at around $30,000 to $35,000. If you're doing a more small home, and you want to get a little bit more scrappy. So those are probably some numbers I would put out there. All right, well, did you have a follow up? Well, just follow up.

Speaker 1 [14:58] Well, no, just like, so like, a tiny home, obviously, space is at a huge premium. What do you call a must have in today's market?

Kyah Ebert [15:04] A must have. I mean, obviously, you have to have a hot tub, you have to have a sauna. I really think putting things that are in the property that you don't see competitors doing. I think that's really what it is. Um, uh, until tomorrow. Good luck. Drew's actually going to hate me for this, but we just did a virtual reality room in one of our homes. We're going to keep it under the wraps and tell absolutely nobody, because nobody's done it in the market yet, but we did this huge, like, cloud suspended ceiling, and this huge poker table, and we've got beer headsets all around. We're creating SOPs for all the games. I got to play with it for a week, which is awesome.

So I'm dragging these virtual games on the table and rolling dice, and I'm playing with my friend. So, yeah, I just, obviously, you're probably not gonna do that for a tiny home, but what could you do at a tiny home that other tiny homes don't have is really, like, what my premise is. All right, Kay.

Unknown [15:51] How about for yourself?

Gay Weber [15:52] Well, they've covered a lot of it. I mean, really, it's the experience, right? Our guests are booking experiences. And you want to give them something unique. They don't want to stay at home, they want to travel and have something new, something novel for themselves. So, for the must haves, it's really, I mean, obviously hot tub, pet friendly, fencing yard is great. There's actually not a lot of those in town, so folks like putting their kids or their dogs out in the yard. Either one, sometimes together, but... Both on a leash? Please clean up after both. But, really, it's as much as you can invest that you are comfortable investing.

I would say, one idea is to go to Airbnb, Verbo, look at their amenity list. Look at their filters, and go through, and how many of those can you feasibly add to your property, because the more filters you add on Airbnb or verbo, the more search you're going to open up to, but that also shows you what they've identified at the top level, people are searching for. And so, it's really just that experience. Maybe you can't afford all of the top level items, but even putting cornhole out in the backyard. And adding some mood lighting and adding just extra things to paint that brewery experience in the backyard of your one bedroom, that does not have a VR room in it.

But it does have that feel of being an Asheville. So, you can do it even on a budget, but it has to be unique. It has to stand out, and, really, your thumbnail on the search sites is what's gonna sell your property.

Tyler Coon [17:21] Okay, I really want everybody that is going to invest in short-term rentals to pay attention to what you said about the amenities list because it's incredibly important what he's saying. Because if you go through and look on air DNA, which is a data analytics platform for short-term rentals and you look at the average home in Asheville, you're going to get like 40,000 a year, right? But if you look at the average home in Asheville that has a hot tub that is pet friendly, that has a king-sized bed, you're going to get a number that's double that. And if it has an EV charger, It's going to go another $5,000.

So it's really, really important to go look at that amenities list and figure out how many of those you can check. And I know I'm repeating what you said, but because it's such an important point. It is probably the number one thing you can do to be successful in short term rentals today.

Speaker 1 [18:05] I, so we have a little soundbite before the podcast, and I'm pretty sure that's what it's going to be. So that was like, that was cold. All right, so we'll start with you and go backwards and again, you all have different perspectives, but maybe this one is kind of like advising your clients, right? So how do you plan for and navigate the seasonal dips, right? Are you telling them, have cash reserves? It's gonna happen, or what is essentially the strategies you're telling hosts to go with.

Gay Weber [18:30] Yeah, well, having done this for myself 13 years, the seasonal dips are much lower than they used to be. It's more of the COVID impact, which was great. It's more of the Helene impact now. I remember when it was really July and October, and outside of that, it was fighting for rentals. So our seasonal dips have really dropped a lot. So to get through those, just be on the ball, right? Market your property, swap out, you know, all of the photos to be more seasonally, um, uh, relevant, and, and at that point, um, adjust your pricing. You're gonna have to. You can't charge summer rates in the middle of February. You might want to, but you're not going to. And so just be real about your property.

And I think that's the biggest thing that owners sometimes face is they're just not real with their property. everybody feels that their property is the best ever. And they're trying to sell it to somebody who sees a little box and a headline, and you have about three seconds on a list of 50 results to close that sale. And so you have to be realistic about what your property really can or can't produce. Sometimes. I mean, at what point does it become not worth renting anymore? You know, I'm not trying to drive rates down because nobody wants that. But you have to be competitive.

You have to offer it for what the market can bear, and that's gonna really be dictated by your ability to market that property properly.

Kyah Ebert [19:56] Great answer, sir. So, for all of our properties, we use a dynamic pricing software. And inside of the software, we can already curate the base price and the prices for those seasons. So, for example, if you have, you know, 12 boxes and each box is a month. We can already look at history and see what those dips were, what those increases were, and then have a percentage increase or decrease in our pricing. And so, you still have to be on top of your pricing. But this is just so whenever we lower our base price, or our rates in general, we're not lowering our prices for summer, or whenever we hire our prices, we're not lowering them or hiring them for slow season.

Because typically, like, a good rule of thumb is you want to be first booked in winter, or slow season, you know, whenever your market is doing the worst, and then, for high season, you want to be last ish. So you still want to get your golden window bookings, which is, like, your premium lead time. So if I have a large home and it has a three month lead time, which I know is what large families book at. I want to get some of those really large premiums, and I want to hold out on the rest of my dates so I can maximize my returns. I know that was a lot, but dynamic pricing software is, like, what you can just need. What's the name of this title? Price labs. Price lab. Cool.

Tyler Coon [21:10] Yeah, I mean, I'll speak about it more from the acquisition side, I guess, since you guys have really illuminated us on the pricing side. But Astro really is a fairly year-round market. We have our travel trends that go up and down, but if you compare it to a market like the beach or something like that. It's fairly year-round. Um, I get clients that come in and they want to kind of design their houses for seasonality, right? They want to say, well, so for instance, right now, people are going, I just want to launch immediately. So you had the question up on earlier and it said, how do you buy? is it easy to buy a profitable short-term rental in Asheville?

And the answer to that is always going to be no, because you don't buy it profitable as is. that doesn't exist here. You have to make it. You have to turn it into profitable. You have to turn it into something amazing. And yet as we hit these amazing seasons. I always tell my clients, you have to come in, you have to do that immediately, because the only people I've ever seen fail in short-term rentals are the ones that went into it with really big ideas and plans, and then they didn't actually go and do the work immediately, and then they call me a year later and they're like, well, why didn't it all work out?

And I'm like, okay, well, what did you do all the renovations and all this stuff we talked about? It was all in the pro forma, and they're like, no, we just wanted to see how it was gonna go. And it was the biggest mistake you can make. is the only people I've ever seen actually fail in short-term rentals are the ones that did that.

Speaker 1 [22:30] All right, gay, I don't know. Maybe that was the sound bite. That was pretty good. That it's not, you're not going to buy it profitable. You might need to make it profitable. I like, I don't know, we'll see. Now we're going to keep wanting one up each other. keep going. Yeah, no pressure, come on. man. Get it. Yeah, let's go. Well, um, Kai might miss out since you already gave the software piece, but you can chime in again. So what is there a specific tool or platform that you find that is super critical?

You know, Tyler, maybe you can answer on, like, what are you encouraging people to opt into since you all don't manage yourselves, but Kaya and Gabe, like, what's a piece that you use every single day, whether it's piece of tech or software, something else, that's a tool that needs to happen.

Tyler Coon [23:09] For me, it's air DNA. I find air DNA to be extremely reliable in the data that they provide, and it's only getting better and better, as more people opt into it. They've done a really good job with data cleanup and things like that recently. And as of a couple of weeks ago, they've really changed their rentalizer. And basically what that means is where you go in, you put it in address, and it estimates what sort of revenue a property can do based on the bedroom, bathroom count amenities, things like that. Well, recently, they've changed that, where you can now customize the comps, before they were serving you via an algorithm, whatever comps it wanted, whatever six closest comps.

What I've been telling them, the six closest comps are not the actual comparable properties, especially when you're operating in a game like we are, where you're developing, you know, little mini resorts, I don't want the six closest properties. I want the six best properties in the city, and I want to comp with those ones and see what they're doing and see what, you know, what that property can do, if we really turn it into something amazing. So for me, it's air DNA.

Speaker 1 [24:08] Kaya, do you guys have a little battle between price slabs and air DNA or...?

Kyah Ebert [24:13] So DNA is actually a software that you use to look at competitors and get an understanding of how much a property can make. Price Labs is how much you're gonna price your property. And Price Labs actually follows a very similar format to what hotels use, which is dynamic pricing. I will say if you're just getting into the short term rental market, you really don't need a lot of softwares, except for dynamic pricing. So, if you guys are getting into your first property, the only thing I want you to pay for is price labs or wheelhouse. Make sure you understand that, and you start to get into it. And as you grow your short term rental portfolio.

It's very nice to have a PMS, a property management software, which will basically connect all of your properties, so you can have a hub where you can have bookings from VRBO, Airbnb, Google, website bookings. The reason I love vacation rentals is 'cause there's all these little levers that you can pull that you didn't really know were there until you grew your business big enough to find them. So, I would say pricing first, and then after you get a couple properties, make sure you get a PMS, a property management software, and then you're probably gonna have a headache with your cleaners. So I use au Perto. Apperto is great.

Um, I might be changing out of them, but something that, something that will basically keep track of your cleaners, and your cleaners can keep track of their clean, so you're not having to help them. So, yeah, it's probably the three.

Speaker 1 [25:25] I feel like you're gonna get some affiliate calls. Okay, that's just it. So, you'd mentioned.com slash Kaya. Yeah. You were saying if you're starting out budget for this one. What is the cost looking like there for dynamic prices? Oh, gosh.

Kyah Ebert [25:37] I'm going to butcher this. It's probably what, $8 to $15 a unit. So if I have one property, It's like 25 bucks a month. And the price goes down. I remember getting priced labs on my first five properties, and my mom was like, It's gonna be, like, $100 a month, and I went from a house that was booking for $700 a night, and in October, it started hitting $900, like, $950 a night, $1,050 a night, $1,100 a night. And I was like, I just made an extra grand in just a weekend. So, uh, yeah, pricing is, like, it is bare none, the most killer thing to get into.

Speaker 1 [26:08] All right, you might have hit their price. You might have hit their little sound bite. If they're listening, that might be that for them.

Kyah Ebert [26:13] I don't know, not as good, but yeah.

Gay Weber [26:15] Sir, on your side. So we use a little bit different tools. We do use Price Labs. Actually, as a, can I do a straw pole? Yeah, please. Yeah, how many people here use price labs? Handful wheelhouse? Wheelhouse? For everyone at home. How beyond pricing? Beyond pricing, less? Anyone? Oh, sorry for those. Zeros. No, but yeah, I agree. Pricing is critical. These are not set it and forget it tools, though. You still have to manage them. You have to keep your hands in them at all times. But they're very useful. They give you access to data that you can't have in-house. So we did, uh, we created an in-house proprietary pricing algorithm. 10 years ago.

And we put it to head, head to head against beyond pricing, wheelhouse and price labs, and we beat them in 2 separate 6 month tests. Now, even with that, we then layered in price labs on top of that, to gain access to market data that we didn't have instant access to as well. So we run a bit of a hybrid system there. How much does that cost a month? Uh, we're on the low end of that pipe. I mean, we're 160 property, so we have that per pricing. And price labs for the individual running it is, I think, a lot easier to get into than wheelhouse, just because they offer, go online, plug in your property, pay a per month flat fee. And I think it is really accessible for a lot of people.

And price labs, I think, is a gold standard for those out there. But we use key data dashboards, which is a competitor to air DNA. It came out of the vacation rental industry from property managers, and it's an enterprise level solutions, so individual investors can't use it, but if you have a handful of properties, you work on a property management system, then you can get into that software, and that actually corrects out things like baked in fees, that corrects out owner stays, blocks, et cetera, things that air DNA doesn't always have access to. So sometimes it's an owner's stay, but as far as you're concerned, for Airbnb, or for Air DNA, it is actually booked, and that's bad data.

So we use key data, dashboard is our primary tool. And then, of course, the property management software. If you get over 5 properties, you really should look at. What property management software do you use?

Kyah Ebert [28:23] We use track. Okay, we use host away. Okay.

Speaker 1 [28:26] So, if I want to sign up and I want Carolina Mornings to be my property manager, this is something you provide on my behalf, or I have to, you could say, here's your log on, figure it out.

Gay Weber [28:36] No, no, no. We do all, and we're very much a handholding company, and being somewhat boutique. We focus on the higher end market. And so that's another reason why we can't spend as much time up front on the smaller properties. But yeah, once we earned a contract, we do everything. You can be 100% hands off, you can live in a different state, a different country. We allow folks that want, they just want to deposit every month, and that's their total involvement. And then we have owners who live locally that want to manage or clean themselves, but they want us to do all the marketing for them. So we do all those solutions.

But really, once you join with us, that's all part of the package of being with us.

Speaker 1 [29:15] So we'll keep it with you, head back, because it's a perfect segue. So I love technology. More data, more better, right? But so how do you strike the balance between like a tech, you know, hands-off solution versus the personal touch that may or may not make the difference?

Kyah Ebert [29:31] Automate your personal touches.

Unknown [29:34] Yes?

Gay Weber [29:35] Yeah. You have humans working for you? Automate tools to remind them to reach out and touch what they should discuss.

Speaker 1 [29:42] How would you automate, like... off the top head, like a handwritten letter. That's not an automatable thing. Candy on the pillow. You can make a handwriting. Housekeepers. Yeah, I mean, they can have.

Gay Weber [29:52] I mean, you can have them bulk prepared. We have homes that have, you know, the wine and the welcome basket and everything sitting out, mint on the pillows that the owners want it. You know, we'll meet them wherever they are, but housekeepers do that. You have somebody in the home every time that's a housekeeper, right? Ideally, you have walkthroughs from maintenance, so that's the second eyes in the home. But if you want to get there before every guest, that's your housekeeper, if you're talking about personal touches through automation, we have a call center, and so our agents are getting reminders all the time, reach out, touch base with this guest.

This is a guest you booked, they just checked out. How do they like their stay? Give them a call. You know, so we tried to do that as much as we can. At the same time, you have to strike that balance, 'cause some guests just don't want to talk to you. That's right. I'm that guest. Like, I'm here to be left alone. That's why I'm at your property. Right.

Speaker 1 [30:43] And so we open the door for you.

Gay Weber [30:44] We provide every way to contact us that you would like. If you need us, we're there for you. If you want hands off, then we just provide a great experience and automated follow-ups. But, um, to answer the original question, how do you strike that balance? We automate those personal touches. So, don't strike the balance. You just go lean into it. Well, no, no, no, I don't know.

Speaker 1 [31:04] Unless we're hearing it differently. Like, you're not in the dystopian future where a robot's doing everything, but you have inspect what you expect technologies that ensure the SOPs are being followed.

Gay Weber [31:12] Yeah, yeah. I mean, we absolutely want to keep that personal that personal touch. Now, we're coming from a different direction than a lot of folks might be. Remember, we were originally all direct bookings. We only take 60% through all the listing sites. We're still 40% direct on everything. And so, I mean, we're the top ranked for our keywords in Asheville, for almost like most keywords. And yeah, and so for us, it was a big discussion about we're moving towards these automation things for efficiency. We're going to be giving up touches. How do we do this?

So we just came around the table and we discussed and came up with a number of different SOPs and solutions to make sure that we weren't losing that touch with our guest. Then the reality is guests started wanting less contact with us. And that's the Airbnb effect, and that's the direct booking on the website booking effect, but, I mean, we were, um, Carolina Mornings was the 1st website in Asheville taking bookings for short-term rentals, and that's going back to, like, the late 90s. That's a flex. pretty awesome. Yeah. So it has been a long journey and we've seen the whole the whole time, but that's what we do today.

Kyah Ebert [32:17] Cool. Yeah, so hospitality businesses are one of the hardest businesses to scale. Obviously, because as you get more units, you have less time to invest into your properties. The first property I ever had, I was there cleaning it myself every single day, making sure there was a bottle of wine, there was a note, and if I got a four star review, I would freak out and figure out any way I could to reimburse the guests or figure out what the issue was. But I will say, for the question, you know, you want to automate as much as you humanly possibly can while still receiving five star reviews.

If you look at a lot of large property management companies, I was looking at a pro forma that Vicasa wrote up for a client that I was working with, and they said, Hey, come and take a look at all these properties we have, they're so amazing. And so I click on the link, you know, 4.7, 4.2, 3.5 stars. And I'm like, why are you even showing your clients this? But at the end of the day, you want to automate as much as you humanly possibly can, while still retaining five star reviews, if you start to see a dip in five star reviews, you need to have these board meetings and start figuring out what you guys need to do in order to, you know, appease your guests. So yeah, that's...

Tyler Coon [33:25] Yeah, I don't do a whole lot in this space. I've even offloaded my own management onto my partner. However, what we do have is we have this local lady named Julie and she's incredible. She not only cleans after the guest is there, but they go and they clean before the guest arrives as well. So now there's 2 cleaning trips and they're coming and bringing flowers, chocolates, you know, everything for the day the guest checks in so that the house is like immaculately ready. That's how we're getting those really high ADRs. So the level of service is definitely going up. And you have to pay for that. It's not cheap. It's becoming riskier and riskier, I think, to have these short-term rentals.

But if you do really have things dialed in, you're in it for the long haul.

Kyah Ebert [34:05] I think something I wanted to touch on too is company culture. So, like, my cleaners have been with me since my first property. So if you can find people that are willing to be a part of your team and work for you, you're able to get prices that, you know, third party companies that you found on Google, you know, are charging. So, like, a lot of people for my property, for properties similar size, they're charging. 350, 425. I've gotten quoted $500 a clean. You know, I'm getting those same cleans for $250, but that's because I've been with them for three to four years and I'm always there to be on the phone.

If there's a trash can out in the woods, and my cleaner's trying to drag it up, I drive out there to help them, or I have a handyman now do it, but, yeah, I think company culture. If you have cleaners that are happy, they love working with you, you have handymen that love working with you, that you could call, and within 30 minutes, they drive 45 minutes out to the property to make sure that the bear trash is picked up, or the light bulbs are fixed, that the guests are freaking out about. I feel like company culture is extremely important.

Speaker 1 [35:00] If you are listening to the podcast in the future, then you just missed how passionate kind of got about jumping in to give that answer. That was awesome. Thank you. A round of applause for, there you go. All right, so I'm gonna deviate from my pre-planned question, so we need to keep this one super short. So, just wondering, kind of something I feel like it's been hinted at a little bit, and I just wanted to maybe, like, thumbs up, thumbs down, go, uh, Tyler, uh, Kaya Gay, and then we'll go back to Tyler for the question.

Is it, are you, like, I'm hearing kind of a proposal that it's almost like, it's either, are you get a home run or you strike out right now with the, with the short-term rentals. Is that a fair characterization or maybe not so much?

Tyler Coon [35:46] I think if you work with me, you hit a home run and if you work with somebody else, you strike out. amazing. amazing answer.

Kyah Ebert [35:54] Uh, in my personal experience. I've hit home runs and then I've hit Maso Menoses. I mean, I haven't hit, you know, total negatives, um, because I still have all the properties I've had since I've, you know, started. So, yeah. Okay?

Gay Weber [36:08] I'd say it's what you put into it, right? I mean, you make it the home run or you make it the failure. So it's not so much acquiring a home run or a failure, going back to there's no good SDRs Dubai, you make good SDRs. All right.

Speaker 1 [36:21] Well, on that note, the landscape's obviously shifting a little bit. What do you think's the biggest opportunity that you're seeing for short-term rentals right now?

Tyler Coon [36:32] For me, it's unfinished square footage. Buy up all those deals you possibly can because they're not going to exist for that long. Um, and that's the best value you can get in this market right now is find something with a basement that's unfinished. If you can find something that's above grade that's unfinished. Even a garage, right? There's a deal right now that we have an offer in on that's 1400 square feet and the garage is 600 square feet. I don't know who built that house that way, but we're turning that garage into more livable space and that's above grade. That's going to improve the value of that house 60% or so, I'm sorry, like 40%. And what's incredible about that.

It already has drywall. It already has ceilings. You put in some flooring and a mini split, and you have 600 square feet, and the appraiser is going to come in, and they're going to give that the regular value price per square foot. So, yeah, definitely value ad deals. I think what Kaya was saying about finding stuff with ADUs are getting really creative. That's what we do in our properties. We really, really love large square footage, anything over 3,000 square feet, is crushing it on Airbnb. It's funny because if you look at Air DNA and you look at studios to 3 bedrooms, the numbers year over year are all down.

And if you look at studios to 2 bedrooms, the numbers are significantly down, all double digits. But if you start going 5 bedrooms and up, The numbers year over year are actually all positive on average. There are some properties out there doing worse. There are some doing a lot better. We have 2 properties in our market right now that are done by a social media influencer that are crushing 500,000 a year. And that same guys about to put a property online right now that will likely push 6 or 700,000 a year in revenue for one property.

Speaker 1 [38:05] It's kind of on that. So with 2020, we were just in Denver, we rented like a 6,500 square foot, like home. And that is because the whole team stayed there versus who knows how many hotel rooms. Like, that is a very, that's a much more fun choice. You know? It's a savings. Overall, really?

Tyler Coon [38:24] Because to put you guys up, you don't have to be in the Omni or something, right? Right, yeah. You know? Yeah.

Speaker 1 [38:28] We'll take it. It's fancy. The Ritz, maybe? I don't know. Jay-Z's right there. You hear this? Waldorf, someone else talk.

Kyah Ebert [38:39] Yeah, I mean, I'm not going to say anything different. It's value ad. There are some properties that we buy and because we're such good operators, we're able to come in and just do the upfit and still make it cash flow really well. But yeah, if you're getting into the market, look at value add. You know, see how you can add extra square footage, how you can add an ADU, how you can add extra cash flow. Yeah.

Gay Weber [38:58] And I'll talk strictly to the short term rental performance. Five plus bedrooms is in the current market. I'm glad that you said that. A year ago was 4 plus bedrooms, right? So, to add a little bit to what you're saying, the studios, one bedrooms, 2 bedrooms, you're in direct competition with every, you're in direct competition with every ADU, um, every garden shed that's out there being rented. Right? I mean, seriously, if it's a couple traveling, your options are open. It used to be that you get to 3 bedroom and above, and that's where, you know, getting more than 2 hotel rooms together. It becomes a pain.

You start getting 3 or more hotel rooms and travelers start to look for other options. But 3 bedrooms are now ubiquitous. They're everywhere. It's super saturated in our market. And so, 4 bedrooms were the step up, lately, it's been 5 bedrooms. And that really is kind of the market. Now, another interesting fact in our market, every time you add another, go on Airbnb, check this, but every time you add another bedroom, you have the amount of inventory. It's almost directly in half. So there's half as many 6 bedrooms as there are 5 bedrooms, half as many sevens, after there are six. And at that point, you are being, you know, you're not surrounded.

There's less noise, and you have more ability to stand out.

Tyler Coon [40:14] You know, it's really interesting too, even the unique places that are one bedrooms. The Earth and Sky Villas, for instance, if you look at their calendars, they're wide open, which is crazy, you know? Those things were booked 24-7, and they're still. They're still, yeah, there's still some of the top performing properties for one bedrooms, but it's gone significantly down. And it kind of surprises me because post-Helene, I would have assumed that families would have taken longer to come back, bring their kids, et cetera, et cetera. But for whatever reason, we're not seeing the 0 to 2 bedrooms getting filled up at all. It's very difficult.

Gay Weber [40:46] Yeah, and this really started with the pandemic, right? And so, pre-pandemic, if you had any rental, we sold out. Asheville sold out in summer, right? And so all you had to do, if you launched in February, you were at the bottom, I mean, you have like a week or 2 at Airbnb to prove yourself, and then you dropped down on your rankings. And then by summer, you would have an opportunity to book again and you would get reviews. et cetera. Last Fourth of July, even before Helene, I looked, and there's over a 1000 rentals still available the week before Fourth of July in our market. And so right now, same story. Fourth of July is wide open for a lot of folks. So that used to be guaranteed sellout.

You're not guaranteed to be on the 1st page anymore. You're not even guaranteed to be seen on Airbnb except for that successful launch. The successful launch is the most important thing because that's your window. Your 7 to 10 days on Airbnb and verbo to get that artificial boost to get bookings, to show that you're going to meet their guest, Airbnb guests where they are. Because if you miss that window, you're on the last page. We need to make YouTube shortset of this entire thing.

Speaker 1 [41:52] This is great. All right, so just kind of quick question, do any of you know, like, what's the total size of the market? Like, how many, how many available... Let's just say... Plus or minus, right? You have to guess what the size of the market is. Yeah, sorry, there you go. Like available rentals? Yep, available.

Tyler Coon [42:07] Assuming they were all empty. right now. 4,500? 4,500. In the greater Asheville area. But you know the interesting thing about that is it's come down 20% since Celine, which is incredible. It's amazing. There are questions we didn't get to ask, but yes. And, you know, obviously that was the worst 20%. They couldn't afford to lose October. So it's not really your competition. So it's kind of right, hold on. Che question.

Speaker 1 [42:29] We have one minute, right? And then it's lightning round and then audience Kune. But how many so there's a tremendous amount of long-term rental inventory right now? How much do you think people coming out of short-term rentals have influenced the increase in inventory? 100% they have. A ton, especially with them being furnished as well? Yep.

Gay Weber [42:46] I'm not happy about it. Yeah, I mean, folks are looking for renters anyway possible. Truth.

Speaker 1 [42:53] Yes. All right, cool. So we're gonna move into lightning round, go by the name, answer quick, right? So, first, this is fun. Do you think that our market of short-term rentals will bounce back to 2022 levels, and if so, win?

Tyler Coon [43:08] Yes, next year. Oh, all right.

Gay Weber [43:12] I think they will. I don't know when. No, and maybe 10 to 20 years, but 2022 was a high water mark right after the pandemic. I mean, those circumstances aren't still here. I'm with you just for fun.

Unknown [43:24] All right.

Speaker 1 [43:26] What's your favorite tool or software that's not a pricing tool that you like to use in your business? Okay, go first, and then we'll go that way.

Gay Weber [43:35] Well, we use track Paul, so that's an all in one solution with our phone system and everything. It has a custom algorithm for, um, it basically has an if then then action built into it, open-ended, so that's my favorite tool.

Kyah Ebert [43:50] Same, a PMS, property management software. So we use hostaway. Love Hostway.

Tyler Coon [43:55] I already said air DNA or DNA would be number one for me if you asked for number two, it would be the air review plug-in by rank breeze, which is incredibly useful. It's a Google Chrome plug-in. It can manipulate Airbnb calendars, see what was booked in the future 90 days, which with Air DNA, you're getting previous 12 months or most other pieces of software.

Speaker 1 [44:15] All right. Tyler, we'll start with you. come back, all right? You have to give an answer here. If you could only own one short-term rental. In one city or community in Western North Carolina, which would it be? Asheville.

Kyah Ebert [44:29] Where would I own it? Yep.

Unknown [44:32] Asheville.

Gay Weber [44:33] As close as you can legally beat Asheville.

Speaker 1 [44:36] Okay, so now what street? I mean, man, you can't give the same answer every time. Like, downtown Asheville? Well, what if it's not Asheville? say Asheville's not allowed to be the answer, apparently. Shows how much we know about short-term rentals. I'd say Weaverville.

Gay Weber [44:50] Fletcher, Arden? Yeah, Buncombe County, anywhere as close to Asheville as possible in any directions is fine. I mean, better questions.

Speaker 1 [44:57] I'm in Buffon county, so I can't give bad advice. All right, so, gay, we'll start with you. This is just fill in the blank. Smartest real estate investment in Western North Carolina. Western North Carolina right now is blank because blank.

Gay Weber [45:11] Well, I see this through different lens, but I would say, um, probably long term unfurnished, if you can find the right deal. Rodrigo runs property management, in case you're wondering, long term.

Kyah Ebert [45:23] It is creative value ad deals that either give you more money to pull out or they have an additional structure or land to cash flow. Because if you have 2 properties, and they make a lot of money on short-term rentals, if you have to go long term, which I had to do during the hurricane, both of them make money for me. And rents here aren't, they don't really fall below 1,000 to 1,200 bucks a month when you have a, a pretty decent property. So.

Tyler Coon [45:49] I would say anything over six bedrooms. Um, and yeah, here in Asheville.

Speaker 1 [45:54] All right, so... Oh, round of applause, yes? Oh, well, yes. If we get a round of applause for our speakers, please. You want to throw it, or you want me to throw it? I'll try. All right. So now, as everyone has seen, we have the catch box. It won't hurt, but please catch it. First question. Who's the brave? There we go. First question, second time. Oh, and the great catch.

Speaker 5 [46:23] I kind of have a few questions, but one is like, do you actually have property in city limits that you're Airbnb? Yes. And how do you, is it grandfathered in based on the airport? We bought it with a license.

Tyler Coon [46:36] We overpaid for it quite a bit with the license.

Speaker 5 [46:39] Because you bought a, like, because it was already grandfathered in. Okay, so you don't have a property that has all the restrictions.

Unknown [46:46] What do you mean?

Speaker 5 [46:48] Well, I mean, if you're in city limits or certain restrictions on what you can Airbnb, what you can't...

Speaker 1 [46:55] That would not be the time to say you're doing that. So yeah. Also, I mean, technically... To not put Tyler on the spot. Sounds like you own something that's allowed to be short-term rental through either grandfather or something else.

Speaker 5 [47:07] Yeah, you have a license where you don't have to live on the property, right? That's right, yeah. Okay, so his grandfather before the restricted line. Exactly. Yeah.

Kyah Ebert [47:16] Very, very rare to find here.

Speaker 5 [47:17] Okay, that's what I'm asking. So mostly we're talking about Buncombe County, correct? Okay. I just wanted to clarify that. Okay. And then, so if we're in Buncombe County, because most so that's what we're talking about, because mostly in the city, you're not doing that.

Tyler Coon [47:36] Yeah, I don't think any of us are really talking in the city that often, no. Okay.

Speaker 5 [47:40] Good. That's what I'm clarifying. Because I have 2 city properties that I can't do that because of all the, you know, restrictions around that and all the lot. Yeah, you should see the city. Yeah. It's been tried. Yeah, well, it has. You can find. There's lots of rules, right? Do you have another question? Yeah, so... Last question. Do you see those laws changing?

Tyler Coon [48:03] Here, only if you sue the city. Okay. Or we both different people. The people in the room could change the laws. throw that out there.

Speaker 1 [48:08] Talking about throwing. Who are we going to throw the box to? Who's next question wise?

Unknown [48:15] All right, here you go.

Speaker 5 [48:17] Yeah, you said if somebody is in it for the long haul, they could make money, what do you consider long haul?

Gay Weber [48:23] I mean, the longer, the better. I mean, obviously, just from a real estate side, you have the equity building, and inflation's gonna drive up rents over time. Uh, but I would say, if you're in a, and you need cash flow today, and you don't get the right property or you don't do the right work for it, then you're not going to get the cash flow that you need. So I'd say at this point, I would have hoped that the market would be back, coming back by the end of this year and updated guidance from Explorer Asheville is looking into next year now. So plan 3 to 5 years, minimum, and give the area a chance to heal.

And then at that point, you know, make some choices, but you still have to buy smart and then have multiple exit strategies.

Speaker 1 [49:07] You guys can chime in if you have an opinion, yes.

Tyler Coon [49:08] So we were at a meeting the other day that gay put on, basically, in Asheville, Explorer, Asheville was there, and they said that on average, the time for recovery of tourism is about 12 months, post-hurricanes, and Naples, and Katrina, and things like that. There were some outliers like Katrina was 48 months. It was a long, long time. But I don't see that happening here. So I think that hopefully come October, we're going to see tourism back, but that doesn't mean that calendars are immediately full because what we had was a mass wipeout event of the calendar, right? We had, in one day, all the calendars wiped out for months and months and months.

So it's gonna take a long time for those things to refill, especially weekdays. It's gonna take a few years for that to refill, because it took a few years to get to that point, right? The calendars don't just magically get booked overnight. It's all of the Sundays and holidays, and when people are online searching for Airbnbs, and booking them, we need to go through all those again.

Speaker 1 [50:00] So now's a good time. to do the plug. Okay.

Gay Weber [50:04] So what Tyler was referencing as the North Carolina short-term rental alliance. I'm one of the founding board members of it. And basically, we came into existence out of the Buncombe County fight to ban short-term rentals, and that has thankfully subsided, but there's always legal threats out there. There's always regulatory threats coming. One of our board members is actually Lotsars, government official, our government affairs person, Matt Allen. Yeah. And he presents every meeting. We meet every quarter and he'll update you on all the current legalities and what's changing from the state level down.

But if you have any interest in short-term rentals specifically, and you want to be in the know with our local alliance, join us, check it out. I just posted the meeting from last week. It was 3 days ago, I think. And the links on the website. So it's uh ncstra.com. It's North Carolina short-term rentalalliance.com. And I'd love to have you joined. It's not just for owners. It's anyone who has any interest, anyone who's any aspect of the industry can join.

Speaker 1 [51:10] Awesome. We will include that in the show notes email on Tuesday. Wait, just a sec. Kai, did you want to chime in on the... so a little bit different than just like our market.

Kyah Ebert [51:19] You asked, like, what is long term? And I think anybody that's running a business should be thinking long term. So, like, for me, for example, I don't want to sell my business until 10 or 15 years when I can sell it to somebody for a huge multiple. So if anybody's in business, you want to be continuing to sharpen your skill set, and to grow a company that's either worth exiting, or can just make you enough cash flow that you feel comfortable with. So, I would just be in it for as long as you possibly can, without going crazy. Yes. All right.

Speaker 5 [51:45] This is a STR conversation, but gay, you said that you feel like the wisest choice at this moment is unfurnished long term. Can you expand on that?

Gay Weber [51:56] Yeah, it's just that our areas had a historic shortage of inventory for long-term renters. And I know that shifting right now, but still, I think that that is a good long-term bet. You're holding costs are way lower. All the utilities are out of your name. You don't have turn on it as much. So you may not make as much money as you would with a short-term renter, but you're making more consistent money. And right now in this current market, you can get through to when the market returns, and as long as there's no bands in place, you can pivot back to a short-term renter. Now, there is a big threshold there. Going from furnished to unfurnished and back is a big deal.

And so I wouldn't recommend anybody who's currently furnished to just get rid of everything and go unfurnished. But if you're looking for another property to pick up right now and you're not able to buy the five, six, 7 bedroom property. If you took anything away from this, it's that you have to buy big and invest a shit ton of money, if I could say that, right?

And so if you're not in position for that, well, maybe you're in a position to buy something that's going to be picked up at a decent, you know, rental rate pretty quickly, uh, can be a little bit more turnkey, maybe not have to polish it quite as much and still get a renter in there, hold it for a few years, let the market develop, and then, then put the big money back into it if you feel like you have a gem to put back on the market.

Speaker 1 [53:15] I would just add is, it doesn't have to be the property that you end up doing a short-term rental with. You can just do a long-term rental and sell it in 2 or 3 years and then use that as your stepping stone to get into your short term, 6 plus bedroom. Maybe it'll be 8 bedrooms by this time.

Tyler Coon [53:30] And I would say there are other opportunities. So we really do focus on 6 plus bedrooms in Asheville, but they're very, very difficult to come by. So personally, I bought something in Whittier last year for 386,000. It's got incredible views. And we finally put that online. We renovated the whole thing. It's a total luxury couples retreat. And I spent about $200,000 doing that. It was really expensive, and there's nothing in that market to show that I should do that. But I like to test things for my clients. I like to kind of run the road before I ask them to drive on it.

So, ultimately, that property already, we're getting ADRs in the 500s for the weekends, and we're looking at that $386,000 property to generate somewhere between 100 and 120,000 a year, which isn't close to our 6 bedrooms, but I can add those a lot faster. And I also don't have to worry quite as much about saturation of amenities and 9 pickleball courts and now all the VR rooms that we have to put in because of kayak, right?

Speaker 1 [54:27] All right, we have five-ish minutes. Another question. Some longtime guests in the front here that are doing the short term thing. Do you guys have a question? All right. Trying to pressure people. There we go. Big Mike with that. Not a question.

Speaker 5 [54:42] So outside of Buncombe County, do you see any other counties and or towns, called bedroom communities of Asheville, that you all feel strong about, that you're seeing some good traction, with, you know, occupancy and dollar per night?

Tyler Coon [54:54] Probably not lake lore.

Kyah Ebert [54:58] Which one is it not? So we're currently sitting around, like, 48, about to be 50 doors soon, and we want to focus on Buncombe County until we hit about 85 to 100, but some market that we recently have been looking at is actually the OBX. There's actually some houses recently. One of Tyler's mentors, Bill Faith, recently just launched a property that did over half a million dollars in gross revenue. So, I'd say the Outer Banks is probably a good market to look at.

Gay Weber [55:24] I'd say now we're across eight counties, and so Transylvania County, Brevard. There are some restrictions there, but that area of Pisga National Forest is actually still popping right now, still doing pretty well. Mills River is always going to be a great location. But Burnsville, does okay.

Tyler Coon [55:41] Mars Hill, I think right now with Hatley Point and everything they're doing there is going to be incredible. Demand was up 38% year over year, February to February.

Gay Weber [55:49] Yeah, so there are other, you know, markets around, but Asheville is still the big anchor, right? This is still a big draw for this area.

Speaker 1 [55:56] All right, we got probably one more question to get out of here on time. Who wants to close it out? Can't see everybody on this side. All right, here we go. Big throw. Big throw. Yeah, yeah.

Speaker 5 [56:11] One, two, hello, hey. This is more of a comment than the question, and I have greatly enjoyed hearing this. My name's Robin Smith Martin. I moved here in 1988. I've been back and forth between here in Key West, where I grew up. I provided concierge service. We oversee 400 vacation real properties in Key West. We're coming into this market. I look forward to working with all of you. What I would say is you have the Golden Goose in the mountains. It's a beautiful and awesome community. And find the balance to maintain and sustain your industry of short term rentals because in Key West, we've blown it out and we don't have much community left. So.

Kyah Ebert [56:57] Can I have a business card?

Speaker 5 [56:57] Don't snuff it out. And I look forward to seeing all of y'all. This is a great group. It's my first time here. Thank you.

Speaker 1 [57:02] Thanks for coming. That is a, yeah, please. Great way to close it out. All right, I don't know where the clicker is. We'll live. Oh, it's right here. All right, so when it clicks. Next month, we were going to do flipping houses 201, kind of more advanced. And it turns out, we couldn't find enough people doing flipping at scale right now because the market's a little different. So we're gonna cover how to find and fund your very first deal. That's next month. There's also the Catalina wine mixer. happening at Capella on 9 on the 17th, please, RSVP, a great round of applause for our speakers. We'll see you guys next month.

Hey, guys, Rodrigo here wanted to say thank you for taking the time to listen into this month's panel conversation. We hope that you join us in person at next month's meeting. You can find out more at AVLmeetup.com. We primarily meet on the 1st Tuesday of every month, but be sure to check out our website, AVLmeetup.com. You can also watch this conversation on YouTube at AVLmeetup. Also, I have a quick announcement. We started a property management company called Vesta Property management. So if you're looking for 3rd party management for long-term rental, we'd love the opportunity to talk to. Our goal at Vesta is to turn houses into homes and investments in 2 returns.

If you're looking to work with a 3rd party management company, that will allow you to have peace of mind and experience freedom around rentals. Reach out to us. help make that happen for you. That's the PM.com. What's going on, everyone. Zach here to close it out before you sign off for the day. If you liked the data driven portion of today's meetup, then I'd love to take a moment to tell you about the Ruiz Report and REMC.co. If you're a real estate professional, then you know that you should become the local economist of choice, but you're probably unsure of how to learn the skills required. That's where the Ruiz Report comes in.

We offer customized marker reports to promote your business, training videos so you learn how to interpret the market data, and monthly quizzes to keep you sharp. Learn more at resreport.com and sign up for a free account to watch all of our training videos at no cost. If you're more interested in the live data and some data and analytics dashboards, then I highly suggest you check out ramc.co. REMC.co is the 1st of its kind data and analytics dashboards for the real estate industry. Now you have to be an active participating member of the MLS in order to sign up, but it is unparalleled data on every market participant, whether that's an office, a listing, or one of the realtors.

Again, you can find out more about REMC.co at REMC.co. As always, thanks for listening, and we hope to see you at one of our next meetups. If you can't make it and you still want to be part of the movers and shakers, then sign up for a free account at AVLmeetup.com and get yourself into our member directory. Thanks again. See you next month.