I am as new as one can be as far as investing in real estate. I've done some analysis and some reading on the topic in the past, but never pulled the trigger. Over Christmas, we spent some time in Ruidoso, NM at a cabin we rented and became interested in the idea of picking up a property up there for rents. Admittedly, I know next to nothing about AirBNBs or owning one. I did like Ruidoso due to the horse races and the skiing. Locals tell me that there is year round demand for rentals up there.

What are some good resources you all would recommend for evaluating an investment opportunity like what I'm thinking?

Your help is much appreciated.

AirBNB sucks to deal with as a host. The beat down was more than I could handle. After over 3 years and over 100 guests, I took my three listings off the platform.

I didn't use VRBO because I don't have vacation rentals.

We were in the same situation a few years ago. We loved Ruidoso and being in west Texas, it was a short 3-4 hour drive for us. We bought a condo there with the plan of renting it out to pay for itself/make money. I wanted to self manage because I knew I was too much of a control freak to have a property manager, and the money didn't make sense.

It pretty much paid the bills/resulted in a small loss annually. The area is so oversaturated with vacation rentals and between utilities, HOA fees, supplies, and repairs, it was hard to make a profit.

The worst part was trying to find a reliable housecleaner. We had one who was decent but then she decided to move to Florida but still run her housekeeping business in Ruidoso. She forgot to clean one time and the next guests arrived to a dirty house. That was the beginning of the end for us. Next housekeeper was on drugs, I'm pretty sure. The one after that was ok for the short time we had her but she wanted to do everything "her way."

The next problem was the guests. They would book the condo for 6 people and show up with 14, disturb the neighbors, and steal things. There was one geographical area that guests came from which guaranteed they would be terrible. Never failed.

We got shut down by the state of New Mexico during COVID. The guests got progressively worse during and after that, and with rising real estate prices, we decided to sell.

Airbnb as a platform is just a tool. Of course they aren't in it to be your friend. Some things in their TOS are not pro-host. I could never gain traction on VRBO because it seemed like priority placement was given to existing long-standing listings.

I have a vacation house in another area now which has experienced none of the guest and housekeeper issues that I had in Ruidoso. I also use Airbnb for mid-term rentals. I would suggest looking at AirDNA to get an idea of occupancy rates to base your numbers on. I would be happy to discuss more details about my Ruidoso experience if you're interested.

HomeschoolPrincipal said:

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We were in the same situation a few years ago. We loved Ruidoso and being in west Texas, it was a short 3-4 hour drive for us. We bought a condo there with the plan of renting it out to pay for itself/make money. I wanted to self manage because I knew I was too much of a control freak to have a property manager, and the money didn't make sense.

It pretty much paid the bills/resulted in a small loss annually. The area is so oversaturated with vacation rentals and between utilities, HOA fees, supplies, and repairs, it was hard to make a profit.

The worst part was trying to find a reliable housecleaner. We had one who was decent but then she decided to move to Florida but still run her housekeeping business in Ruidoso. She forgot to clean one time and the next guests arrived to a dirty house. That was the beginning of the end for us. Next housekeeper was on drugs, I'm pretty sure. The one after that was ok for the short time we had her but she wanted to do everything "her way."

The next problem was the guests. They would book the condo for 6 people and show up with 14, disturb the neighbors, and steal things. There was one geographical area that guests came from which guaranteed they would be terrible. Never failed.

We got shut down by the state of New Mexico during COVID. The guests got progressively worse during and after that, and with rising real estate prices, we decided to sell.

Airbnb as a platform is just a tool. Of course they aren't in it to be your friend. Some things in their TOS are not pro-host. I could never gain traction on VRBO because it seemed like priority placement was given to existing long-standing listings.

I have a vacation house in another area now which has experienced none of the guest and housekeeper issues that I had in Ruidoso. I also use Airbnb for mid-term rentals. I would suggest looking at AirDNA to get an idea of occupancy rates to base your numbers on. I would be happy to discuss more details about my Ruidoso experience if you're interested.

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this was our experience as well

I am close to purchasing property in a "vacation area" to be used primarily as a short term rental and sometimes vacation home.

The stories on here have me questioning if short term rentals are viable as an income source in addition to being a huge headache. I've had a long term rental in the past and other than the maintenance it was pretty much hassle free. Decent tenants, paid on time and managed everything myself until I sold it years later.

All of the horror stories I hear from hosts are for "off-site" rentals where the host/owner is not on property or even in the local area. You'll end up needing a management company to manage the place, and they'll eat up your revenue really quickly.

I'll add that municipalities are starting to clamp down on AirBNBs and other STRs. I've done STRs in two different states, and the restrictions on STRs have grown substantially in both cities since COVID. I have a friend with a condo in Galveston, and he's experienced extreme oversaturation in addition to increased permits/fees costs.

STR can work if properly designed. Be prepared for headaches dealing with AirBNB and guests and you may be OK.

I use a good management company for my place in Port A, they take 19% but I have almost no headaches, they even have their own security force. They market and clean and deal with the city

What platforms do they/you use?

htxag09 said:

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Sure, but if the poster is looking "to purchasing property in a vacation area to be used primarily as a short term rental and sometimes vacation home" they probably aren't local....

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Which is why I mentioned it.

Keeper of The Spirits said:

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I use a good management company for my place in Port A, they take 19% but I have almost no headaches, they even have their own security force. They market and clean and deal with the city

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How's that doing for you? I have a friend who took on a second mortgage to build something in Port A. Using the equity in my house to build an investment home would scare the crap out of me.

Then you also have stories like the one below:

https://www.usatoday.com/story/travel/2023/03/07/airbnb-sued-toddler-dies-fentanyl-florida/11420550002/

I've been operating two 1/1 apartments near the Pearl for just over 4 years with nearly 400 reviews. We can count the bad experiences on one hand. AirBNB has been awesome helping with any issues we've had either as host or guests including a full refund for our stay at a place in Houston last weekend that was listed as a "private suite" but was really a shared space in a SFR.

To be fair we did live on site for the first 3 years, we owner occupied a triplex, so that combined with the fact that the 1/1 apartments mean we're not getting big groups in helped our experience tremendously. I am weeks away from listing two RV spots on 15 ac in Uvalde county that will be our third and fourth listings and I believe you damn well better considering if any local governance is forthcoming in an dense vacation area.

I think even the platform sees the writing on the wall in dense areas and that's why the front page of the platform changed last year to showcase all the treehouse, glamping and "off-grid" places. I would consider something further outside the target area where you won't have any city regulation, HOA/POA or other potential restrictions.

mwp02ag said:

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I've been operating two 1/1 apartments near the Pearl for just over 4 years with nearly 400 reviews. We can count the bad experiences on one hand. AirBNB has been awesome helping with any issues we've had either as host or guests including a full refund for our stay at a place in Houston last weekend that was listed as a "private suite" but was really a shared space in a SFR.

To be fair we did live on site for the first 3 years, we owner occupied a triplex, so that combined with the fact that the 1/1 apartments mean we're not getting big groups in helped our experience tremendously. I am weeks away from listing two RV spots on 15 ac in Uvalde county that will be our third and fourth listings and I believe you damn well better considering if any local governance is forthcoming in an dense vacation area.

I think even the platform sees the writing on the wall in dense areas and that's why the front page of the platform changed last year to showcase all the treehouse, glamping and "off-grid" places. I would consider something further outside the target area where you won't have any city regulation, HOA/POA or other potential restrictions.

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AirBNB can't scale focusing on rural stays.

Cynical side of me would say that treehouse is optics.

Good point.

I do agree that there is considerable risk with buying urban property modeled around STR incomes.

It's a pretty fluid situation in a lot of areas and changing regs can really kill cash flow.

mwp02ag said:

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AirBNB has been awesome helping with any issues we've had either as host or guests.

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We've had the exact opposite experience as hosts. Two problematic guests over the past few months and AirBNB has taken the "we're neutral" position and did not help us resolve.

Long story short: The guest booked an entire house where we have placed a "No Pet" policy. The guest arrives with a dog as seen on the doorcam. We message the guest to either remove the dog or pay an additional cleaning fee. The guest indicates the dog will be removed, but no such thing happens. Emails, emails, more emails, and phone calls with AirBNB, and their solution was to pay us $500 out of their pocket for the cleaning fee. The dog remains, but now the guests cover our doorcam when they walk in and out of the house in an attempt to hide the dog. Three-month guest checks out this Sunday. 100% getting a 1-star review. The guest had the balls to say "I see no evidence of a dog." B***h I see you on the doorcam walking a dog in and out of the house!!! It was AirBNB acquiescing to the guest that resulted in us delisting.

It seems like overstating the obvious, but the location and size of your rental has a lot to do with how your experience shapes up.

We have our unit with VRBO and have not no problems with them or our tenants. Every question I have had was promptly answered in a satisfactory manner.

We are in a 30 unit complex in Bryan with mid 20 to old folks like me. I have never had any complaints from the neighbors as we rent to families.

As far as STR rules and laws changing we really aren't concerned. We rent the unit and then sublet it for STR. If the laws change we will finish our lease and move on.

I think STR is highly dependent on the groups served. We have 2 places on LBJ priced on the higher side so we typically get families/more affluent groups. Plus I have a local manager to handle the occasional "rowdy" groups.

I also use VRBO for MTRs so get mostly professionals who keeps the place very clean.

I personally would avoid a STR in the downtown areas in places like Vegas/Austin where people come for bachelor parties.

It sounds like people are all over the map on this. My guess is a lot depends on the location and target age group, demographic, etc. We've been considering a STR in a vacation spot too so this is all good info. Turning a profit wouldn't be our goal and is a pipe dream, even with lower interest rates.

AirBnB as a platform is getting long in the teeth and needs some competition.

My FIL is the #1 realtor for years in Ruidoso. He knows every house there.

I can put you in contact with him. H'ell shoot you straight on the market.

You mind sending me an email with your FILs info, water turkey?



Cheers

OlArmy01 said:

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You mind sending me an email with your FILs info, water turkey?

christopher dot d dot rush @ gmail

Cheers

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Done

Thank you for this post. You may have just dissuaded me from considering Ruidoso. That sounds horrible. I assume the "problem area" you referred to are for renters just south of the border. Am I wrong?

Sorry for the late reply.

Actually just NORTH of the border. Anyone from El Paso was a nightmare, and absolute nightmare. We got guests pretty regularly from Mexico but none of those were ever a problem like the El Paso people were.

Spill the beans!! Where was the area that the trouble renters came from? I am considering listing an extra home for rent myself.

Main ones are VRBO, Airbnb, booking.com, TripAdvisor, Google travel and a few others

50% of booking come from the company website, 49% from vrbo and Airbnb, it's cheapest in the company website. Port tip off you see a property on Airbnb try to find it in the management companies website it will be cheaper

I wouldn't build new Port A right now especially way out of town. They are building a ton, rents are off this year about 5%, and people are waiting until the last minute to book

If you have a pool you do way better

El Paso

I think self managing a STR in a location you are not within 30 minutes of is almost impossible. We have one but we have a good management co that does a pretty good job of looking after things. Not as detailed as I would be on my house, but pretty good. I tried doing it without a management company and it was a disaster. Cleaners not showing up, not doing a good job, getting calls in the middle of the night because someone cant figure out how to work an over or lock a door. We pay 20% but it is worth it to not have to deal with that stuff. There is also no way to monitor the house from a long way away. About the best you can do is a ring door bell. Obviously you cant have camera's inside so you may see the cleaner show up but you have no idea how well they cleaned or if anything was missing or broken. A good management co will more than make up for what they charge you

I would never manage a STR even if it was down the street. This is essentially a job. Internet not working, supplies missing, cleaners forgetting, broken stuff, ice maker not working, toilet clogged, disposal clogged, towels missing, etc..... You have to check on the place before and after cleaners. Just alot of turn arounds.

Make sure the zoning allows for it. I've seen broker's trying to get into the market around Telluride & Platteville completely botch asking prices because they didn't understand zoning implications & established land use codes for vacation rentals.