Branson Short Term Rental Income: What Airbnbs Really Make and How to Maximize It

Bill Beck [00:00:00]:
Foreign.

Avery [00:00:04]:
Everybody, welcome to the Short Term show special episode series on Branson, Missouri where we are doing a 10 episode deep dive on how to buy a short term rental in Branson. So we’ve got a few supplemental materials for y’ all in addition to the content on this podcast over on our website. So any questions you have about purchase prices and searching properties, you can do that on our website. We also have the Air DNA data thanks to our friends over at Air DNA income data on properties in Branson. So you can find these things at the short term shop.com so www.the shorttermshop.com purchase prices and income data. If you want to buy a short term rental property with a short term shop agent in Branson, you can email us at agents the ShortTermshop.com or if you just like us, you just want to hang out with us more, there’s a few ways you can do that. Can join our Facebook group. It’s the same title as my book.

Avery [00:00:59]:
It’s called Short Term Rental Long Term. We, we are over there talking about short term rental investing all day, every day. Or if you prefer to talk to us in person or virtual person, you can join our Zoom call that we have every Thursday. You can sign up for that@strquestions.com. we’ll catch you guys over there. Hey guys, welcome back to another episode of the Short Term show special episode series on Branson. This is the episode that, that I think everyone is always waiting for, the episode on numbers and data. So we have a separate episode where we’re going to talk about expenses.

Avery [00:01:42]:
So just know that’s coming. But today we’re talking about numbers coming in and kind of the analysis side of it. So got some, some cool cats and kittens here to help me talk about this. Go ahead and introduce yourselves.

Bill Beck [00:01:54]:
I’ll go first. I’m, I’m Bill Beck. I am a realtor here in Branson, Missouri. I specialize with vacation rental investors. I’ve been in the vacation rental space since 2017 and used to be a consultant helping buy vacation rentals all over the country and fundamentally got into that role because I cared deeply about where the heck do you make the most money with these things? Because this is neat. Like you could buy a vacation home and make money with it. This is dope. So that’s my story.

Avery [00:02:22]:
All right, thank you.

John Roberts [00:02:23]:
Well, love hearing it. I think. I’m super excited to get into it with you, Bill, because that’s literally what I do right now. So I’m head of data for TechVestor, I. TechVestor is one of the largest short term rental investment funds in America. And it’s my job to identify what’s the absolute best market for us to go into, how do we maximize, what’s the best thing for us to purchase within that market, and then how do we maximize revenue from that home? And then I also have an Airbnb data consulting business where I help people literally do exactly that. I teach the processes, I provide reports and help people buy profitable short term rentals. So I live and breathe airbnb data.

Avery [00:03:00]:
We’re all just here to help people buy profitable Airbnb short term rentals.

John Roberts [00:03:04]:
So, yeah, we literally like it. For me, when you hear somebody buy a bad property or they like, tell you your numbers, it just hurts my soul, you know what I mean? Then, like, they tell you where they bought this home and like, you just. I just know in the back of my head I’m like, that’s never going to work out for you. And you’re not going to find out for about two years from now. And then you’re going to think short term rentals are terrible and you’re going to walk away. So, yeah, I mean, if I can help, I’m gonna have to help, right?

Avery [00:03:27]:
It always makes me cry a little inside when one of our clients calls us. Even if, if they just want to sell it to 1031, exchange into like, something bigger. I always cry a little when a client says, hey, how much do you think I can get for this? Let’s list it. I’m like, but no, it’s generational wealth. Even if it’s like totally performing fine, they just want to move up. I cry a little inside when they do.

John Roberts [00:03:48]:
So, yeah, see, because we just care. I mean, honestly, I don’t. People who, like, could do these podcasts and actually, like, give out this information, we just. There’s something in us that genuinely cares. But anyways, let’s get into the numbers.

Avery [00:03:59]:
Not all of them. There’s some, there’s some idiots out there. But anyway, okay, let’s talk about the numbers.

Bill Beck [00:04:05]:
I just don’t want to be myself. And I’m just kidding. But this, this, this is a good one. I think people are listening. Like, this is gonna lift a weight off my back because this always, always, always, always, always comes up in every conversation because this is fundamentally why people are doing a vacation rental, because that income element. So hopefully we’ll talk about some really good, awesome stuff that will prevent me from having future conversations about having to repeat Myself again and again and again and again.

Avery [00:04:31]:
So let’s start with analysis. Like, Bill, what are we looking at when? How do we decide if a property is potentially a good buy or not certain?

Bill Beck [00:04:40]:
The top line, what’s the revenue potential? Don’t people always fixate on what did it do? That’s great, but our market does not have a lot of historical audited Ernst and Young financial statements. So we have a lot of people that are like, well, I booked like 197nance at this rate. And you’re like, cool. That’s like basic. So getting ballpark estimates. I like telling people what kind of what tier of the property we’re looking at. So not just bedroom size. The bedroom size can dictate kind of fundamental, like, what can this thing rent for? But within those different bedroom sizes, there’s going to be like budget, economy tier at the bottom, mid tier, upper tier, and then luxury.

Bill Beck [00:05:22]:
So it’s like, what specific property is this fitting into? And that’s based on qualitative features of it. How nice is it? How high are the ceilings, how nice is the kitchen appliances, how square feet is it kind of uses it have. So that plays into the whole, where does this sit? And that will kind of dictate what the market will bear as far as what you can charge for it. So that is, that is how you ultimately want to start it out, right? Like, what can this thing make? And then the easy part is the expenses because then we’re just taking out the, what is the cost of ownership in the course of the year with HOA fees, utilities, cable, Internet, all those things, insurance. So then you get down to cool, this is what’s left. And then your debt service. So, you know, most people go get a loan. So factoring what, what that looks like after you take that out and then boom, there you have it, all right?

Avery [00:06:12]:
And after you factor out that debt service and you’ve got your, your net number that you’re probably going to end up with at the end of the year. So what formula are we using to decide in short term rentals? What’s the best one to use to figure out, okay, is this a good, a good investment or not?

Bill Beck [00:06:28]:
Well, that depends. But the cash on cash would be the one that people love to throw around. And I’d say I get a little triggered when people come at me and are like, what’s the best cash on cash? You’re like, stop, we can’t jump the gun here. This is important because obviously, Avery, if you want to explain how Cash on cash works. It’s a really good like investment way to think of how are you going to put your money to deploy it and then get the most out of it. So I’ll let you give your expert definition.

Avery [00:06:55]:
So I mean my expert, I try to explain it in a way that is very easy to understand. So it’s the amount of money that you put in upfront. So that’s your down payment, your closing costs, any rehab, rehab costs that you’re doing versus the amount of money that you have at the end of the year after all your expenses, including your mortgage, expressed as a ratio. So you are looking for typically and different people will say different things. So I like to see a 20% cash on cash return. But don’t quote me on that. I’m about to say something else. Don’t stop listening and then go say, Avery said it had to be 20%.

Avery [00:07:30]:
You’re not going to find like five years ago when nobody was doing this. Yes, there were tons of deals just lying around on the ML MLS that you could just pick up that we’re doing like 80% cash on cash return. Those times are over. That was early adopter time. This is real life now. So what you’re looking for is not necessarily a property that’s on the market that has previously done 20% cash on cash. You were looking for properties that are on the market that maybe they’re not hitting 20% now, but you’re looking for the opportunity to get it up to over 20%. And you, I say that it’s not difficult to do.

Avery [00:08:08]:
You will probably not be struggling to hit 21%. If you do things right, you can hit 30, 40, 50. But it’s very case by case basis and really depends more on you as a manager than the property itself. So just keep that in mind that not all properties are created equal. Not all managers are created equal. Your cash on cash return up to a certain point is really dependent on how it’s managed.

Bill Beck [00:08:35]:
And 20%. Let me just ask that, I’m curious why, why 20%?

Avery [00:08:41]:
That’s just kind of what I’ve to be, to be honest with you, all of my properties do significantly more than that. But that’s just kind of a more conservative number. That kind of makes sense because once you get, you know, if you’re like at 10, then it’s kind of like I could just go do a long term in certain areas. So to make sense for the amount of work that short terms are, you’re kind of looking to be able to make sure it gets over that number.

Bill Beck [00:09:04]:
A good way to analyze too is to do a napkin math, like what is the potential revenue relative the acquisition price? Because that’s a ratio too, right? You have that in your book, right?

Avery [00:09:15]:
Yeah, so that’s kind of like. It’s kind of a derivative of a different formula. But if you’re looking at another. This is another one that a lot of real estate investors use when they’re looking at stuff is what the revenue is versus the purchase price as a percentage. So wanting to get buy a property that makes 20% of its purchase price gross income. So you know, if you’re buying $100,000 property, you’re looking for it to gross 20,000. So some people say 10%, some people say 15, some people say 20. I think 20 is a good deal and you need to buy it.

Avery [00:09:49]:
But again, same thing. All of that kind of depends on the property itself and is it already being optimized? And if you optimize it, what can you get it to? And bill, do you want to hit on the difference between cash on cash return and cash flow before we jump into the numbers, how you can’t really have both.

Bill Beck [00:10:07]:
Oh, the like, why going for both maximization is challenging. Well, with your, with your, if you’re going for your best ratio with a cash on cash return, is basically saying you’re utilizing the least amount of money possible to get the best yield off that money that you’ve deployed. But you’re going to have more debt, period, because you got to have ownership of this thing. So that creates ultimately more debt service which is paying off your loan. So when you have more loan, that means you’re not going to be able to pocket as much because you’ve got a higher debt load. So when you have someone who’s like, I want all the cash flow, it’s like, well, if you put more money into the deal of owning it, like 20% down or even 25, then you have less debt that you have to pay fundamentally. So therefore you’re going to have more money left over to keep for cash flow. So when people say I want both cash flow and cash on cash, that’s like, that doesn’t make sense to me.

Bill Beck [00:11:02]:
It’s like saying I want to like, be able to run really, really fast, but then also like, like go really long distance. And, and, and I don’t know if that’s a good analogy, but it’s just.

Avery [00:11:12]:
No, I think it is because you can’t go really, really fast for a. You can’t sprint for 26 miles. You have to pace yourself.

John Roberts [00:11:18]:
Yeah.

Bill Beck [00:11:18]:
So anyway, so that’s, that is a good question. So I do like to ask that of, of buyers find out kind of what is, what’s their goal, because that can kind of factor into how we strategically go about putting something together.

Avery [00:11:32]:
Yeah, yeah. And there’s no wrong thing to look for, guys. So you may be looking for a different thing at different times in your investment career. I know when I first started and I didn’t have like any money in the bank, cash on cash return was most important to me because I wanted to put as little money into the property as possible. Now that, that, that we have a lot of properties and more cash flow, so that’s not as much of a concern. I’m more worried about, okay, how much is this going to add to my income every month than I am about that percentage of what I put down versus. I mean, it still matters. I’m not saying that I’m just going doing terrible deals, but I’m more concerned about, okay, we’ve got some money we need to move out of the bank and into a property.

Avery [00:12:09]:
How much is this going to add cash flow wise per month? And does that make sense?

Bill Beck [00:12:14]:
Well, I also like what Bill said, Bill Faith said at the wealth conference about depending on what life stage you’re into, like, yeah, maybe you don’t want to be like six. I literally, that was totally ironic. Wow.

Avery [00:12:27]:
Bill’s calling me right now, guys.

Bill Beck [00:12:29]:
That’s a little weird. But no, I was just going to say like his point of saying, like, you don’t want to have maybe, you know, 80% debt on all of your property portfolio when you’re 65 years old. It’s like that’s going to be a little bit risky, like maybe, you know, getting it to a 50, 50%, you know, so that way there’s more equity you’ve got across the board from a wealth standpoint, but also higher likelihood of cash flow, less debt.

Avery [00:12:56]:
So, yep, that makes a lot of sense. So, all right, I think we’ve got a pretty good understanding there if we want to move over to John’s end of things.

John Roberts [00:13:06]:
Hi, John. How’s it going? It’s been nice, it’s been nice to listen to you guys talk about all this stuff and I’m still learning myself all the different little things, so it’s always fun to, to get the insight directly from all this. But yeah, let’s, let’s get to the numbers. What is it? Is there anything specifically you want to go over?

Avery [00:13:23]:
No. Like, do you just want to give us an overview of what you found and then maybe we’ll dig a little deeper on a few things.

John Roberts [00:13:28]:
Okay. So generally whenever we do these combos, I try find some sort of insight. I kind of like to. To do comparisons. Usually we do multiple different markets, but this case we’re doing one. So what I wanted to do was just take a look at the different bedroom counts and see if there was some interesting insights I could pull from that. One thing that I did figure out was that, you know, nine bedrooms for whatever reason are doing better than 10 bedrooms and five bedrooms, for whatever reason doing are doing better than six bedrooms. Right.

John Roberts [00:13:55]:
So if somebody’s going out there to actually purchase one of these homes, it makes more sense to buy a nine bedroom or five bedroom instead of a six or a ten. That was like a quick little insight that I was able to find. The like, there’s a ridiculous amount of money being made between the five bedrooms to 10 bedrooms. You have a ton of homes that are doing over a hundred , up to 200,000, up to 300,000. However, they only represent 10% of the market. So there’s 4,200 listings in the entire Branson area and about 400 or so of those are 505 bedroom plus, which to me is just such an interesting insight because it’s, it’s like a. There’s, there’s so many, I don’t know Branson market extraordinarily well when it comes to who is the exact type of traveler that’s going there. So like, Bill, I’m going to ask you some questions here as I go into this, but there seems to be a ton of like two bedrooms and three bedrooms.

John Roberts [00:14:45]:
Right. So I’m assuming that we have these like smaller families that are going to Branson to be able to go to like the Silver Dollar City and then also go to some of the beaches that are nearby. But then when you get these larger homes, they’re absolutely crushing it. And so I’m assuming that for these larger homes you either have like wedding things happening going on or just really like multiple families all coming together to go to Silver Dollar and stuff like that as well. And probably the one more. One of the more interesting things was that most of the five bedrooms that were doing extremely well were all near Moonshine beach, which I don’t know Moonshine beach, but it seems like most of them are within driving distance or walking distance to Moonshine beach. Or it might just be that that’s where all these new builds were built. Because that’s one thing that I have looked into like tech Fester does own a couple of homes down in Branson and we do have smaller homes being.

John Roberts [00:15:38]:
And we ran our numbers on the larger homes and they’re all the new builds that were coming up and they’re building like so many of these new, massive new build homes. And we, for us personally, we have to hit like a 20 to 25% price rent ratio to make it work for us. And our fund, because of some addition fees that we have, we couldn’t make that work, but was very close and we also couldn’t take the risk on it because the data is not clean the way that I like, like most of the data. In most cities, the data is like super clean. You can go through it and it makes a ton of sense. In Branson, it’s all over the place. And so that’s another question I’m going to have for you, Bill, is like I’m trying to figure out why the Branson data is so inconsistent. And what I mean by that is that you have a lot of these homes that are showing bad data.

John Roberts [00:16:22]:
And what is bad data? Bad data is when you have a host who is, who has not been managing it full time or it hasn’t been tracked by air DNA for over 250 days. And so what’s coming up a lot is these homes look like they’ve been tracked for over 250 days, but they don’t have reviews every single month. And so my theory is that Branson is literally one of these cities that’s built out for tourism. Right? The Silver Dollar City is all about tourism. And, and then they’re building all these communities and new homes specifically for tourism. And so my thought is maybe there’s just a lot of people who are placing their money in these homes almost as like bank accounts. They’re okay with them breaking even and they, they’re not doing any of the work. So they’re having a management company actually manage it and they’re fine if it’s not done at the very top level.

John Roberts [00:17:10]:
Right. And so my theory is like, are there a lot of people who are just dropping money in here and letting bad property management people manage these homes and that’s why the data is maybe showing up so poor? I don’t know. That’s my question to you. Does that make sense what I’m asking?

Avery [00:17:22]:
I have a theory.

John Roberts [00:17:23]:
Okay.

Avery [00:17:24]:
So I talk about emerging markets sometimes. And what I mean by emerging is not emerging. In terms of tourism, but emerging in terms of actual sophisticated investors investing in them. And it’s kind of very similar to what you just described. So you get, you have people that buy these things but they don’t really care. So they put them on these old archaic property management companies that don’t optimize, they don’t use pricing tools like Bill mentioned on a previous episode, where they’ll just have, we’ve got our peak season price, we’ve got our off season price and those are our only two prices. And so I think what we’re seeing is maybe a market that is five years behind like some of the more sophisticated management markets like a Scottsdale or a Panama City beach. And you’re just seeing a lot of old school archaic dinosaur managers.

Avery [00:18:19]:
But that’s my guess. I don’t know. I’m going to let Bill.

John Roberts [00:18:21]:
Well, I want to chime in on that real quick because I, I think that might be the case because there’s two things that I noticed that, that like hurt to look at. Right. So a crazy amount of really bad listings, like terrible photos, not well up to optimize homes. They would have multiple living rooms but the other one wouldn’t be a game room. It would just be another living room which is like the biggest waste of space that you could possibly do. If you have two living rooms and you have a kid friendly market, you make the other one a game room. Right. Even like the decks and the views, there was nothing going on.

John Roberts [00:18:53]:
The outdoor area, there was nothing going on. And it just seems like there were these cookie cutter listings that people are throwing up. And then on top of that I came across one listing that it said in the title $508 a night for 36 people with 16 king beds. And if you do the math that, that’s $14 per night per person. If you get 36 people in there. And I’m just like let’s go. How right.

Bill Beck [00:19:18]:
Church.

John Roberts [00:19:19]:
My thought was like so instantly when I saw that I’m like this, like there is is there weddings that happen here and if there are weddings that happen here and I did google it, there are weddings that happen there. Nobody is tailoring their listings for weddings. In other words like showing off different things you can do when it comes to having a wedding there venue there’s or just targeting your clients properly. Right. So anyways, a couple of things that just blew my mind with the 508 flat rate pricing and then not optimizing the listings and bad photos. Brutal.

Bill Beck [00:19:50]:
Yeah. Well, I think Just jump in the, the, the majority of the inventory in Branson, as you mentioned, 1, 2, 3 bedroom condos, that is like, that’s like what, 80% of everything we have. And then you know, we start to get to these four or five bedroom type properties. But people are always looking for that. So that’s something that in our, in our pricing right now, which you could buy today, that 400 to 600,000 price point, like there’s, it’s non existent. It sucks. Like if I, I, I’ve talked to developers, I’m like you could build like 100 of these, 200 of these things. Like they would, it would sell immediately because there’s a missing inventory here.

Bill Beck [00:20:26]:
But the five bedroom to 10 bedroom, that has been something that you talked about there being about 400 of them, right? So yeah, in the last like two, three years we’ve built up, I want to say probably 200 of that. So we’ve doubled the inventory in the last two, three years. And then the decade prior is when those other ones came online. So I think those were the front runners. The ones that bought those six, seven bedrooms right next to Silver Dollar City that crank insane amounts of money because there’s nothing else there. People couldn’t book other things. Nothing else was bookable because of our zoning restrictions. So with that being said, people had that as the only option to book.

Bill Beck [00:21:05]:
So those things made an ungodly amount of money. People saw that and were like well dang, let me do more. Let’s developers got wind of it and to work within the bounds of our zoning restrictions here, they had to put these communities in place. So like Chatzo Cove, Chateau Mountain, Branson Cove, Rocky Shores, Crown View, these are all names of these communities that are purpose built for vacation rental investment. And you know, talk about cookie cutter. I think part of it’s because these developers, it’s like this is easier to throw up 50 of these things that are all basically the same and try to do 50 custom builds. If you work with builders like they have a stressful life. They’re working with like subcontractors that are like, you know, maybe going to show up, maybe they’re drunk weed on the job site.

Bill Beck [00:21:51]:
Like it’s like they, they want to make this stuff super streamlined.

John Roberts [00:21:54]:
That, so that, that part is completely understandable. My take is the interior design of it is cookie cutter. Right? So you, if all the homes are the exact same, but then everyone furnishes them the exact same, you’re not going to stand out. Right?

Bill Beck [00:22:05]:
And I want to oh yeah, I agree with that. That’s, that’s a really good point. I don’t think people, I think people, what they do is they like see something and they’re like, oh, that’s what they’re doing. That’s what I’m gonna do.

John Roberts [00:22:14]:
And that’s the biggest mistake that you can do. Right. Go, go look at like places in Scottsdale and look at how intense those homes are because it’s so competitive. But I want to talk about another thing where you just said that they added 200 more listings, which means they doubled the amount of five bedroom plus homes. So people, people might be thinking saturation, right? Like, is that too many?

Bill Beck [00:22:31]:
Always get that question.

John Roberts [00:22:32]:
People always get that question.

Bill Beck [00:22:33]:
Yeah. And I, I, I feel like we don’t know yet. Maybe this is going to increase demand because this is something that was already an underserved, like bedroom sized tier. So maybe there’s a huge amount of demand that will eventually. I think people are going to struggle if they aren’t thinking outside of the box. If they’re doing the cookie cutter thing and they’re just showing up like, oh, I’m not getting bookings. It’s like, well, you look like the surrounding 40 buildings that have nothing like differentiating themselves. Yeah.

Bill Beck [00:22:59]:
To work within the bounds of what you can, which is the inside of the property. So get that thing different. Make it like fun. Put the game room like go balls to the wall on that. Get the, get the golden tea, the big buck hunter, the, the crazy mural on the wall, like go for it. Because if you’re just gonna be throwing in your residential interior design C grade, you know, we got just the bare minimum in there. People, I mean, sure, people will pass out and you know, have a good time, but like they’re not gonna book your place above other people who are doing some crazy stuff at their place.

John Roberts [00:23:30]:
See? And, and well, so that actually applies to every market. Just so anyone listening to this, Everything that he just said applies every single market. But when it comes to that, that saturation question I did do, I checked it out before. Right. So on air DNA, we have the supply of listings quarter over quarter and then we also have the revenue quarter over quarter. So I always like to match those two up and make sure that revenue is keeping up with supply. Right. Once revenue starts dipping and supply kind of increases, that’s when, you know, market is saturated.

John Roberts [00:23:59]:
So the interesting thing is that in Q3 of 2022, the number of listings actually peaked at 5,166. And it has dropped the past 2 quarters. So this, the quarter we just passed in Q4 of 2022, it’s now down to 4,535 listings. The other interesting thing about that is that in Q3, where it did start, where it did peak, there was a negative saturation of 5%, which means that each individual listing was making 5% less. This. Honestly, 5% less is not a big deal at all. Like, not even remotely a big deal. To meet 100,000 now, you made 95,000 big deal.

John Roberts [00:24:35]:
It’s not going to, it’s not going to like crush you, especially when there’s other markets that are down like 20, 30, 40%. Right. But, but once those other listings started dropping off, the, the saturation level actually went back to normal. So in Q4 of 2022, people are making 16% more and in Q1 of 2023, people are making 13% more. Almost 14% more. Right. Year over year. And I find that super interesting for, for sort of two reasons.

John Roberts [00:25:02]:
One, this is one of the first markets that we’re actually seeing this happen in, where that’s happening. And then you can see it’s sort of leveling itself back out for all the people who kind of made it through that, that time period. And this also at the same time is exactly what I think is going to happen in a lot of markets that people are feeling that saturation level in right now, where those, those, those underperformers, those people who don’t know what they’re doing, are going to start dropping off their listings. We’re going to see a dip in those different locations. And then the people who like, stuck it through, they’re going to start seeing the, an increase year over year. But anyways, I thought that was an interesting insight. It’s not oversaturated is what I’m trying to say it is. It’s good to go.

John Roberts [00:25:37]:
Right. And it, it can host another, at least 500 plus listings comfortably.

Bill Beck [00:25:42]:
So thank you for saying that because it’s one of those things that it always comes up. And listen, because there’s zoning. Yeah, the saturation thing is really hard to do, period, because it’s already this artificial supply cap. And that is the main thing that makes my job tough. Like if we didn’t have that and I could sell whatever the hell I wanted to, this would be pretty wild. Like this. We wouldn’t have any, no one wouldn’t live in Branson. It would be just a bunch of wild, crazy vacation rentals everywhere.

Bill Beck [00:26:10]:
So. But then nothing would be open, and then the place would fall apart because all the shows would be like empty stages and there’d be no one at restaurants. So. But, yeah, good points. I appreciate you saying that now. It’s good to hear it.

John Roberts [00:26:23]:
Yeah. Saturation levels is an understanding. Saturation levels is what Avery and I bonded over the very first time. Getting. Getting annoyed with people saying that markets are saturated without actually checking the data on it.

Avery [00:26:36]:
Yeah, well, because people think that just because there’s a lot of rentals in an area, that that means it’s saturated.

John Roberts [00:26:41]:
Exactly. And, you know, it’s funny too. In my head, when I was like, when I was going through Branson, and even from my prior research at Branson, I was like, man, there are so many five bedrooms and six bedrooms, eight bedrooms. I’m like, there’s just like a crazy supply. And then literally today I’m reviewing it, I’m like, oh, it only makes up 10% of the entire market. That’s. That’s five all the way to 10 bedrooms. Right.

John Roberts [00:27:02]:
So like, eight bedrooms make up the tiniest fraction of this entire market. But anyways, it’s super interesting.

Avery [00:27:07]:
Yeah.

Bill Beck [00:27:08]:
Yeah. I don’t know what the data for the room count is. Like, just what is our total room count in Branson compared to the 10 million people that come here per year?

John Roberts [00:27:17]:
Are you saying how many listings or how many bedrooms across all the listings.

Bill Beck [00:27:22]:
I don’t want to make up terms. This is not revpar. Like, what’s the addressable amount of beds that people could sleep in to manage that 10 million dollar, you know, person demand figure? I don’t know. This is.

John Roberts [00:27:33]:
Don’t have that number.

Bill Beck [00:27:35]:
Okay.

John Roberts [00:27:36]:
It’s not met, though. It’s not met. That’s the thing. Because people are making more year over year, so they’re still.

Bill Beck [00:27:42]:
We’ve also got like, you know, hotel rooms that are there. Like, they’re struggling because they’ve just. They’re just not attractive anymore. They’re very like, you know, it’s bad.

John Roberts [00:27:51]:
So, yeah, yeah. Maybe someone should do a hotel conversion in that area then.

Bill Beck [00:27:54]:
It should. Glamping sites. That’s the hot thing now.

Avery [00:28:02]:
Glamping.

Bill Beck [00:28:03]:
I’m just trying to get you triggered.

Avery [00:28:07]:
Tiny homes, tree houses, glamping. That’s the way to do it.

John Roberts [00:28:13]:
Someone’s going to take just that piece and turn it into a clip. Avery said it.

Avery [00:28:19]:
Okay, so, John, what have. In terms of, like, we have unlimited money. Let’s say, for example, hypothetically, what’s the best thing for us to buy in Branson size wise? Location wise or what? Whatever you have available to tell us.

John Roberts [00:28:36]:
Okay, well, if you have unlimited money, then you get an indoor pool. You get a new build that’s obviously got a good amount of square footage and you get some views and it’s going to be close to Moonshine beach. That’s your 100% go to. There’s obviously, I don’t know what the name of the community is there, but there’s a community there. You can get homes between like a million to 1.5. They’re going to be somewhere between like eight and nine bedrooms and they’re going to give you the potential pool in there. That’s sort of the unlimited money option.

Avery [00:29:03]:
What about the limited money option? Or wait, Bill. What? Go ahead. You were about to say something.

Bill Beck [00:29:07]:
You want me to say the community? I mean.

Avery [00:29:08]:
Yes, please do.

Bill Beck [00:29:09]:
Branson Cove. I just. That’s the one. I did the video. I think I shared in our slack. But that’s the, that is the one that’s. It’s more so closer to the marina. I, I imagine this is the hottest, newest one that they built.

Bill Beck [00:29:22]:
Chateau Cove is actually kind of in that same. I don’t know, it could be one or the other because shat. So Cove is technically closer to Moonshine beach, but that was. So the original one was Crown View over by Silver Dollar City and that was on Willow Oak Lane. There are a bunch of kind of cabin style properties that are again because of the proximity to several cities. That’s what like kind of opened the floodgates, so to speak, of people making a buttload of money with these larger properties that slipped a bunch of heads and beds. And then Chateau Cove was a one that came up right after that, which is close to the Chateau Hotel. That’s why that’s the name of it.

Bill Beck [00:29:59]:
And that area, you know those, those properties were kind of like one of the. Again. Okay, well they did that over here. Let’s do that here. And that again got so successful they got bought up. It kind of created a whole developer like build spree of like let’s do these in other places. So it just kind of became a land grab to go set it up. But yeah, Branson Cove, I’ve done, I’ve done a transaction over there.

Bill Beck [00:30:23]:
They. With the proximity to the Table Rock State park, with proximity to the marina. I mean you can get to Branson within 10 minutes. So it’s, it’s a really good spot.

John Roberts [00:30:34]:
Yeah. So that, that’s, that’s sort of the go to. If you were to go for It. And then you. I think, Avery, you’re gonna ask sort of like if you don’t have unlimited money.

Avery [00:30:43]:
Yeah. So say I’m new. I’m like, I am, Avery. Just starting out. I’m scraping the pennies out of the bottom of my purse to buy one of these things. What am I. What am I looking at?

John Roberts [00:30:52]:
All right, so I’m gonna give, like, two options here. So we’ll go. What I just said was top. I’m gonna give middle. And then I’ll go like the optimist or like the. The. The really trying to make it work option. So the.

John Roberts [00:31:03]:
The sort of middle of the pack, the way I would view it is the five bedrooms. Right. Like I said, the five bedrooms tend to do better than the six bedrooms. I don’t know exact of the way that they built the homes, but I have done research on five bedrooms, and from my, like, new build, five bedrooms. And from what I’ve seen, there’s sort of two different types of new builds. There’s this, like, smaller version, and then there’s a. There’s a slightly bigger one. And that slightly bigger one absolutely dominates the smaller one.

John Roberts [00:31:28]:
And so if I were to be looking between the two, I. I think it would be worth it to spend that extra little bit to be able to get the slightly larger one. And the reason being is because it has the. The dual living room. So you have the living room for the parents, you have the living room for the kids, and it just has that additional little bit of space. You wouldn’t need views necessarily. You would just want to get that interior space sort of figured out. Right.

John Roberts [00:31:49]:
Like, sorry, have enough interior space for everyone to feel comfortable within that five bedroom. That’s what I’d be going for. Right. And I think that’s going to be like, around that, like, $700,000 range. I think. Now, Bill, you can correct me if I’m wrong on that, but that’s. That’s kind of where I’m seeing it. New build, 700,000 ish.

John Roberts [00:32:04]:
So that’s. That’s five bedrooms. Now the lower than that. So sort of you’re just like scraping through and trying to make anything work. Build. You’re going to correct me on this one if I’m getting it wrong, but this is just me theorizing. I was seeing a lot of homes between 200 and $300,000 that had a bit of land. They weren’t new build.

John Roberts [00:32:22]:
They were definitely old potentially. You know, my theory, or my thought was that what if you were able to buy one of those homes, design it extremely well. Like really design it well, but take advantage of the yard. So trying to find a home with a, maybe putting an above ground pool in there with a deck around it and then adding a ton of like games to the backyard, maybe even like a pickleball court, all these different little things and just kind of making that home really stand out for itself. And the reason I’m saying that that might be a kind of like inefficiency within the market is simply because nobody has backyards in almost all these homes. Nobody has the backyard, all these new builds, nobody has a backyard. So if you can kind of create like a little oasis within your own Airbnb, it might give you that advantage. What are your thoughts on that? Bill?

Bill Beck [00:33:05]:
That would be sick. But zoning, zoning is a big block for that. So that is truly like. I’m gonna use that word, right? Because it’s like, yeah, is that allowed? I love that word. We can’t do that. No, you can’t do that here. That’s what sucks. That’s the, the, it’s like the parameters within everything is a condo platted situation.

Bill Beck [00:33:27]:
It looks like a single family where you have your yard that you should do some stuff with. Technically the association owns that you can’t, I can’t even build around. I mean there are few one off properties that have gotten grandfathered in and Taney county that. But they, you cannot transfer that permit now. They’ve actually taken that ability away. So there might be, you have to go to the Taney County Planning and zoning and try to advocate for them to like realow you to get your permit, which again is a risk. So it’s, it’s feasible. But that’s not, that is not what is something that someone could purchase.

Avery [00:34:01]:
Like so I’m going to interject to interrupt both of you really quick because this is a really good teaching moment. This is why guys, you have to have both of these people, you have to have the data and you have to have the agent with the local knowledge. So now that there’s a lot of data out there, I think a lot of people think they can just run around to listing agents and they know what they’re doing. But this is why you need a local, both the data and the local expert. So yeah, you guys didn’t mean to illustrate that, but great job.

Bill Beck [00:34:30]:
Well, and we kind of, it’s the natural progression, right, because it’s like, like you’re, you’re not familiar with the market. No, you’ve got Really a high degree of knowledge in how vacation rentals work as a whole. Coming into Branson, it’s like, why aren’t people doing this? And there’s the reason why. It’s totally like they should, I, I swear they should do this. Like someone should allow this. Someone should let people do what the hell they want to do. This is America, the land of the free, the home of the brave. So please, please, please let us do this.

Bill Beck [00:34:59]:
But the county at this point, like they’ve kind of created this monster, so to speak. So my opinion is you get a one, two, three bedroom condo that’s just a badass place and stands out. You’re gonna do good, you manage it well. I mean it’s not gonna be like, totally like, holy, this is a crazy different vacation rental I found. That’s like different from every other market. But, but I mean that’s, that is what people are allowed to have here. And that’s kind of like it’s like within the. Okay, here’s another analogy.

Bill Beck [00:35:28]:
It’s like you’re within the race course. It’s like, okay, we’re racing Mia Mazda beyond. You can do anything with the Miata, but you bring a Ferrari to the thing. You cannot, you’re not allowed to do that. So that’s just, that’s just the classification of everyone has to be working with the condos here.

Avery [00:35:41]:
And those ones are all buying Miatas. No Ferraris allowed.

John Roberts [00:35:46]:
Yeah, yeah.

Bill Beck [00:35:46]:
I love your facial expression because I know I was definitely hitting home with that analogy.

John Roberts [00:35:53]:
Yeah, that nailed it.

Avery [00:35:54]:
Got to meet myself.

Bill Beck [00:35:55]:
Going to be this.

Avery [00:35:57]:
Okay, okay. So John, what’s your response to that? If we can’t, can’t go get those single families and add a fire pit now. Now what are we doing?

John Roberts [00:36:07]:
Good question. That’s a good question. And now I feel like all these ideas are going to have bills. It’s gonna be like, yep, not allowed, you know, so well. Okay, so I would go, I would go, who’s the customer archetype? Right. So are you going? From my understanding, Silver Dollar City is all about kids. Right. And so let’s think of another market that’s 100 focused on kids.

John Roberts [00:36:27]:
Kiss me. Right. And what do they do in Kiss me? Immersive game room themed bedrooms, all those different things. And it. And people who do that, they crush it. So then therefore, what I would maybe try and do for Branson is try and bring some of what’s working over there and bringing over to here. I’m not saying build a frozen bedroom, you know what I mean or, or like Harry Potter bedroom. But build a bedroom that is extremely kid focused in some sort of way that gives them like an immersive experience within that home.

John Roberts [00:36:57]:
Obviously the game room, you can go over, over the top with it as well and that’s going to allow you to stand out. Right. So we, we’ve done one thing where we put a slot like bunk beds in and then a slide off those bunk beds. Just that alone on the COVID photo kills it. Right. Another thing is, is maybe there’s garages and maybe are there golf courses in Branson? So maybe.

Bill Beck [00:37:15]:
Thank you. Yes, I was gonna say there are some, there’s some units that you can get a garage that are attached. It’s like that. No one’s really taking advantage of that. That would be killer. I mean let’s just rip off Kissimmee’s like entire idea and like, like well that’s here in Branson.

John Roberts [00:37:29]:
That’s what we do with. Right. So with in all reality there’s a lot of different markets. Right. But if you really think about it, there’s only a couple of subsets of markets. I think STR Insights has done a great job of categorizing them. Right. So you have your beach markets, your mountain markets.

John Roberts [00:37:42]:
The Branson would be considered a family market. Right. Like silver Dollar City is 100, just a tourist grab for a families to go and have a lot of fun. So what are some of the other markets that are similar to that? And then how can you take what’s working there and replicate it into that market? Right. Just like I always tell people that are in like a Scottsdale esque market, rip off everything that’s working in Scottsdale and bring it to your market and then that will is how you do. Well, we do that. I can’t name all the cities we do it in. We can maybe talk about offline, but we’ve done that in gone from like stuff that’s really working really well in Scottsdale and brought it to some of these like third tier cities and it just absolutely kills it.

John Roberts [00:38:17]:
And so steal the ideas from the cities that do the best is what I’m trying to get across right now.

Avery [00:38:21]:
I think that’s you know, pretty good advice across the board.

John Roberts [00:38:23]:
I mean people steal stuff from Gatlinburg in there. So like I have a friend who was realizing that everybody was putting movie theaters in in Gatlinburg and so he put it into his Blue Ridge cabin and it absolutely kills it because nobody in Blue Ridge really has a movie Theater there, right?

Avery [00:38:37]:
Oh, really? Yeah. It’s kind of funny how these markets that are really similar have their own things. So, like, it’s taken the Smokies until, like, now to get any sort of modern architecture, but they’ve had indoor pools for years, whereas they’re in, like, Blue Ridge. Modern. Modern cabin architecture has been a thing for years, but there’s no indoor pools. It’s like they all had their little things. Nobody is doing everything same thing here, so.

John Roberts [00:39:03]:
Yeah, exactly. Well, and then that’s where, that’s where, like, the elite or just the smart investor realizes that and brings it together. Right. So, yeah, in that cabin, by the way, in Blue Ridge is literally doing almost double the next nearest competition. It’s just like, it’s just absolutely crushing it. And it’s not because it’s an elite cabin, it’s not a luxury cabin. He’s just, just crushing it with these amenity ideas. So, yeah, amenities are everything.

Avery [00:39:27]:
So backtracking from the amenities, really quick, what’s the, the bedroom number that we’re focusing on? If we’re, if we’re Avery scraping pennies out of the bottom of her purse.

John Roberts [00:39:35]:
I’d go for the. So, okay, so this is where I, I, I’m saying five bedrooms, but if we’re going, if we’re going lower, I think we gotta ask Bill, like, Bill, if we’re going. If we’re lowering to like a 300, 000 price point, are we going to one bedroom, two bedroom, or three bedroom?

Bill Beck [00:39:49]:
The three bedroom is the one that has the highest earnings potential. Those are the ones that get gobbled up when they hit the market, and everyone will be like, bill, can you ask about the numbers for. Sorry, it’s gone. So those are the ones that certain communities, the resort ones, not so much like the. Because there’s a one community in in particular called the Vineyards that they have a lot of three bedrooms. They’re all three bedrooms, but they used to be affordable housing, and they basically changed their HOA restrictions to allow it to. Those ones actually perform similar to what two bedrooms do, like high performing two bedrooms. So they’re priced lower, but their performance is on par.

Bill Beck [00:40:31]:
It’s because I think they have a high concentration in that little area, so they can work, though. I’ve had clients that have bought them if they have valley view or city view, because then there’s ones that are tucked up against the rock wall that are very dark. But the three bedroom is the one that I own. Three bedroom is as far as the inventory breakdown because there’s one, two, threes. I mean, that is the one that has the highest upside. You could probably make close to $60,000 a year. I had one I just sold for a client as a listing, and they were absolutely murdering it with. With their three bed.

Bill Beck [00:41:04]:
So I don’t think that excludes one or two bedrooms, though. One bedrooms can get incredibly high occupancy rates like the ones in Point Royale. They can get close to 70%. So I don’t know what they’re doing, but. But they just have this attractive, really good location right next to the clubhouse, right next to all the amenities, and, you know, very nicely outfitted. And it’s perfect for retirees that want to golf a bunch and hang out and not overkill it with getting a two bedroom. Now, I’ve sold the most two bedrooms, though, so I don’t want to neglect this class because this is the one that gives you upside potential. There’s a lot of competition in the space, but if you pick the right one at the right price, that is the way to go.

Bill Beck [00:41:42]:
So. Because that is something that is accessible to a lot of people. If you’re a first timer listening to this, if you get a two bedroom that, you know is priced appropriately, you’re getting something that’s really competitive. I mean, that is gonna. That’s gonna do well for you because this is the majority of what we have inventory wise in Branson.

John Roberts [00:41:57]:
To purchase a question on the three bedrooms. If would you get a three bedroom in a condo as a duplex or a single family home?

Bill Beck [00:42:05]:
I’ll get in the condo.

John Roberts [00:42:06]:
Get in a condo. And why is that?

Bill Beck [00:42:07]:
Those. Those amenities that come with it. So. Plus there’s no single family homes, period, for the most part. And then townhomes. There are occasionally townhomes, but the condos are what is up for sale on the market, so.

John Roberts [00:42:20]:
Gotcha. Thanks.

Avery [00:42:20]:
All right, well, is there anything we haven’t touched on that we need to before we go?

John Roberts [00:42:25]:
Just checking my notes. Oh, handicapable access. I talked with somebody about this, and that was sort of like their secret sauce. So I’m kind of giving it away on this episode. But if you can make your place handicapable, accessible all the way through it, it makes you like one of a kind in that area. And apparently a lot of people that go to Branson are like three generations worth of families that are coming together and the grandparents need that. And so if you can provide that, it gives you a huge advantage over everybody else.

Bill Beck [00:42:56]:
That is a term here. Walk in. That’s Something that will advertise on listings and something we’ll advertise on vacation rental and realtor real estate listings. So the ability to get into the property without stairs, it’s kind of crucial for some of the demographic. Not everyone, but I, I, I can vouch for that for sure.

Avery [00:43:17]:
Good to know. Very good to know.

John Roberts [00:43:18]:
Yeah. That’s everything on my part though.

Avery [00:43:20]:
All right, Bill, you got anything else before we sign off?

Bill Beck [00:43:23]:
Yeah, if someone has, you know, the buying power of over half a million dollars and up, that is where we could talk about those five bedroom plus range. But if someone’s just getting started, which is a lot of what of the people I’m working with, there’s a lot of really good opportunity in this 200 to $300,000 price point here. May 24, 2023. So this is, this is that not the Goldilocks zone, but it’s something that, there are a lot of properties in that mix. But Goldilocks though, like that, that’s the astronomy term. Yeah, I’m a nerd.

Avery [00:44:00]:
It’s an astronomy term.

Bill Beck [00:44:01]:
Yeah, that’s for the, where the distance away from the sun that a planet is, that can bear life. The Goldilocks zone.

Avery [00:44:07]:
Oh, I mean, okay, got it.

Bill Beck [00:44:12]:
But okay, the 200, 300, 000, you can get something that’s like, you know, really really top tier, gonna get booked out really, really well. And then running the numbers on that, like, I mean, people can’t be too conservative with that because I think they’ll back themselves out of it assuming averages, because we’ve already talked about a lot of averages. Here are people who use bad photos, as John mentioned, or, you know, don’t know how to price optimize, you know, as we said in another, another episode. So if you bring some level of sophistication and desire to do well, I mean, you can knock out of the park.

John Roberts [00:44:44]:
I got one last thing I want to add here before we hop off because we talk about this in every episode, but maybe somebody’s only listening to this episode. What Bill is just talking about there. We’re figuring out how much you’re, your listing is going to make. And just using like an average is the absolute worst way to go about it. Avery has coined the term the enemy method. Right. I call it the Burger King logic. It is when you are, do not use an average.

John Roberts [00:45:07]:
When you’re trying to figure out how much your home is actually going to make. Check your competition using good data to verify. Find homes that are very, very comparable to yours. Or what you are planning on doing and then figure out exactly what they’re doing. Right. And then put together a listing that’s very similar to that. You can expect to make a very similar amount. Right.

John Roberts [00:45:26]:
So like Bill just said, a three bedroom has the ability to make 60,000. If you look at the numbers, they also have the ability to make 40,000. Right. So just make sure that you’re getting the right home that’s actually lines up and has the ability to make that 60,000 which sounds like it’s a condo with the amenities and not a duplex that maybe doesn’t have that opportunity. Right. So use the entity method, study your competition, don’t use averages and get down to the nitty gritty detail on that. I have free courses on YouTube if you want to check those out.

Bill Beck [00:45:52]:
And that’s why the whole bedroom size thinking kind of pissed me off because there’s a two bedroom that can make 20,000 and then there’s another two bedroom that make 50,000. So it’s kind of like you could generalize but if you over generalize everything when your analysis, analysis is coming into play, it’s, it’s never going to look good because you’re always assuming incorrectly. So that’s where just, just that that artistic touch and knowledge of what is the true potential here, that’s, that’s what’s most important to, to go about doing that way.

John Roberts [00:46:20]:
I hate averages more than anything. I hate when people use them.

Bill Beck [00:46:23]:
Well, this is a room filled with above average people. So we’ll just.

Avery [00:46:28]:
Okay, well on that note, I’m gonna sign us off before we get any more dad jokes. So guys, if you want to buy a property with Bill in Branson, buy with Bill Beck and Branson. Email us at agents at the short term shop.com and we will get you hooked up with him. Or if you just have more questions, we have an email open Zoom call every Thursday. You can sign up for that@strquestions.com or if you’re not quite ready to do all that, you can just join our Facebook group. It’s called Short term Rental, Long Term Wealth. Same as my book. Thank you guys so much for coming and we’ll catch you on the next episode.

Avery [00:47:05]:
Thank you.

Bill Beck [00:47:05]:
Thank you. Sat.