Form 1007

[BOB PADRICK]

Back before the management companies were so tight lipped, I used to get pretty good info on the actual occupancy rates, management costs, etc...

Bottom line, if your subject and comps are all str (short term rental) properties, then the GRMM you develop should be sound. Radically different than a normal GRMM, but the numbers should adjust out.

I then supplemented the report with exactly what you have all spelled out so well-occupancy rates are quite low, rents vary by season, high management and turnkey fees, and that the entire scenario was a speculative use. Then just said that I placed most weight on the sales comparison approach, and went with that.

 

[Couch Potato]

Not all STRs are the same.

Bottom line, if your subject and comps are all str (short term rental) properties, then the GRMM you develop should be sound. Radically different than a normal GRMM, but the numbers should adjust out.

You mean short-term rental properties with same amenities, same quality of furnishings and serving the same clientele don't you? Neighboring short-term rental developments may have very similar physical characteristics, but serve totally different markets. Their vacancy rates and rent schedules may be polar opposites due to the markets they serve.

 

[Deuce of Spades]

The last time I was doing anything in that area, the majority of the sales had already been converted to single family (full time) residences. The short term market is just that short. In fact, the house that I was working on was tenant occupied (1 yr lease) and many of the others in this NEWER neighborhood was also typical rentals not shorts. I did a straight rent schedule and mentioned multiple times that this is a short term rental area.

 

[Couch Potato]

The last time I was doing anything in that area, the majority of the sales had already been converted to single family (full time) residences. The short term market is just that short. In fact, the house that I was working on was tenant occupied (1 yr lease) and many of the others in this NEWER neighborhood was also typical rentals not shorts. I did a straight rent schedule and mentioned multiple times that this is a short term rental area.

If they don't have a guarded, gated entry, clubhouse with changing areas at the pool and onsite maintenance contact, the neighborhood can't compete in today's short-term market. The economic life of a short-term rental is somewhere between 5 and 10 years.

 

[Wm. Hattaway]

Thank you to all who responded. Bill