Is St. George Over-building Vacation Rentals? Real Estate Radio w/guests Ty & Pam Isham (St. George Real Estate Radio Show)
Today, Jeremy Larkin brings guests Ty and Pam Isham of My2ndHomeVacay.com to talk about the Vacation Rental boom in Southern Utah! The Ishams manage dozens of nightly/weekly rentals, interface with the owners and of course, would-be buyers of these properties. Tons of amazing info on the market, enjoy!
Below is the actual St. George Real Estate Morning Drive show, hosted by St. George Real Estate Agent Jeremy Larkin, word for word! Enjoy and please share if you find it valuable!
Jeremy Larkin and The Larkin Group @ Keller Williams Realty can be reached by calling 435-767-9821, or emailing firstname.lastname@example.org.
Andy: 8:35 on News Radio 94.9, 890 KDXU. Every Thursday we get a little taste of St. George Real Estate. It is the St. George Real Estate Morning Drive with Jeremy Larkin. Jeremy, take it away.
Jeremy: Good morning, ladies and gentlemen, ladies and germs. Ladies and germs, right, Tai? Tai is in the background. He can yell. Hey, I have got some fun guests here today by the way. I like to go with the lady’s name first, which is Pam.
Pam: Hi, good morning.
Jeremy: Yeah, and Tai Eisham. And on the Facebook Live you are going to like this because we always put a title. And I said this morning, let me pull it up, guys. If you are not watching Facebook Live, you had better be. So you can listen to this show 94.9 FM, 890 AM, Facebook Live, YouTube Live, shoot, man, I think we might even have just the government downloading it straight into your brain. When we figure that out. I said Pam –
Jesse: If you pay them enough money, they might.
Jeremy: Yeah, I said how cool is that and a glass of milk?
Pam: And a glass of milk.
Jeremy: Yeah, like how cool is that? So we are going to have Pam on momentarily after we listen to ourselves talk. Right, Jesse?
Jesse: You love to listen to yourself talk, that is for sure.
Jeremy: That is why I started a radio show. Let me go ahead and do something. Guys, I am going to do something live on the air. I am going to encourage you to do the same. I am going over to, I am letting my fingers do the walking. Who remembers that? Who remembers what company that was? It was one of the phone companies, but which one was it?
Jesse: I cannot remember.
Jeremy: Let your fingers do the walking?
Jeremy: Was it?
Pam: Was it?
Jesse: I cannot remember.
Jeremy: Okay. Let your fingers, Yellow Pages. It is just Yellow Pages. Let your fingers do the walking.
Jesse: I was going to say that but then you said phone company, and I am like phone company, they are not a phone company.
Jeremy: Yeah, yeah. Hey, Jess, kick that door because we have got guys, I think, they are having a drunken party down at Devin Dixon’s office on the ESPN radio right now, which is really early for those guys to start drinking. Right? 8:37. Thank you. Guys, visit Sold in St. George dot com. Jesse, will you tell them what you are doing by the way?
Jesse: This is so exciting.
Jeremy: I am going to cast my own vote for myself right now, for us.
Jesse: We are going to do that. So we actually have been nominated for the Best of Southern Utah, the Larkin Group. Actually twofold, Jeremy and the Larkin Group.
Jeremy: Best Realtor and Best Real Estate Team.
Jesse: So we would love your help in that. Jeremy posted that thing the other day that said the last time I won anything was in high school.
Jeremy: It was the Class of 1993 yearbook, and I hope, I hope some of the people that I care about are watching right now. It was when I won Biggest Comedian for the Preference, ’93 Preference. Okay? No, Andy, it is real. Go to Facebook, man.
Jesse: He did. In all seriousness, if you know who the Larkin Group is and you know who we are, we are all about trying to do the right thing and be the best that we can be. So if you have done business with us or if you love what we deliver and the value that we give, we would love the opportunity to win that contest.
Jeremy: Thank you, man, for that description. So you just visit Sold in St. George dot com and the way that we rigged out website, it is so fun. It pops right in front of you and says vote here. And here is the cool part. Two clicks. You click it opens. You click, you voted. There is no email. No phone. No nothing. It is one of the most killer platforms. I did not build it. Another media company in town did, a competitor. So please vote for us over at Sold in St. George, Sold in St. George dot com. You can actually vote every day until March 15th. I know we will not count on that for most of our listeners, will we now? Will we now? Thank you, Robert for posting that. Morning to our listeners, viewers, watchers. I have always wanted to start a watch party. Can we try that sometime? Let’s start a watch party.
Jesse: A watch party?
Jeremy: I do not know.
Jesse: Is that on Facebook?
Jeremy: It is on Facebook. Guys, momentarily, we are going to have Pam Eisham on, and Pam and Tai, they manage short-term weekly rentals. Some of you might have heard on Tuesday I landed here with Andy in the, whew he is giving me the thumbs up, I landed very last minute on the Open Mic Show and we talked about vacation rentals and short-term rentals. I wanted to give you a teaser, okay? Because yesterday she asked so responsibly what questions, and here are the questions I asked her that we are going to talk about today. Thirty seconds, what do you do? In one minute or less, how did you get into the business? How many units, vacation rentals do you manage? Who are your clients? Who are the people who buy vacation rentals and need them managed? What kind of income do they bring? How much money can they make? What are the biggest concerns owners of vacation rentals have? What does it cost to have it managed? What is the biggest challenge you face managing short-term rentals? How does someone contact you? And what is your general opinion of the short-term market? This is like, and I have said this on the air, this is the news at 10:01. They go hey, stay tuned for the most important story, which will be on at 10:29PM at the very end of the broadcast. But we will not go that long. So momentarily we will have Pam on, but I am Jeremy Larkin, host of the St. George Real Estate Morning Drive. I have got Jesse Poll here, who has really become, he has become my co-host.
Jesse: That is right.
Jeremy: Andy Griffin, we took his microphone and headset away as part of a punishment. He is in a timeout this morning. He has got his headset. We just took his microphone away. And if you will please cast your vote over at Sold in St. George dot com for the Best of Southern Utah. And I would be curious, see, I am trying to track, do you know what I did. I created a Google document yesterday with all of my favorites companies that I am voting for, and I am actually voting for daily. Literally. I have my own list.
Jesse: So where do you go to find the whole list of all the companies in the different categories?
Jeremy: So, this is perfect. So if you want to go over to Best of Southern Utah dot com. Best of Southern Utah dot com.
Jeremy: And you can vote. My gosh, you can vote for just about anything. I think there were 900 companies nominated in I do not know how many categories.
Jeremy: I do not know.
Jesse: I am going to go look at that.
Jeremy: Yeah. Let’s talk about short-term rentals.
Pam: Talk about short-term rentals.
Jeremy: Let’s do it. So I have got Pam here. She is lovely. I have Tai just lurking in the shadows, probably like he has done most of their marriage. I do not know. Is this a metaphor? Is this a metaphor? He is back there. He is sckulking around. I love it. I love that he is in the studio. I have Pam Eishman. And Pam and Tia are actually past clients of ours –
Jeremy: — that we have worked with in the real estate world. So thank you for, I always say, helping us feed our families because literally you did and you do and you guys have referred us business, and we are working on referring you business now.
Jeremy: Which is going to be awesome. So, give us a 30-second synopsis like we talked about earlier. What is your company and what do you guys do?
Pam: Yeah, essentially what is our company? So we are vacation rental management company. But then I thought hard about what do we do, right? So what we do is we provide great experiences for our owners and our guests. It is our ultimate goal that people build memories when they are with us. Right?
Pam: People come to our area for many things, and what we want them to do is be able to come and put their feet up when they come into one of our units and feel like they have just come home. It is their second home. It is a place to kick back and have all those comforts.
Jeremy: It really is. When I was on Tuesday, I actually relistened to the show. Andy, it was funny. Yesterday, I (indiscernible) doing something else, and I was even giving, getting a kick out of myself. I said I am user. Dot, dot, dot.
Pam: I heard that.
Jeremy: So that is why I do it.
Jeremy: I saw the funniest story the other day. It was a Facebook story. A guy, I do not know how it got in the news, but KSL had it on their Facebook feed, and the guy is looking at long-term retirement housing. Like when Mom and Dad get too old and they put them in, not a care facility, but more like –
Pam: Assisted living.
Jeremy: — like assisted living. And he was talking about the cost, and this guy had written blog about it. A blog or a Facebook post, and he said here is the deal. It is X number of dollars per day to stay at one of those things. He said I am actually going to go to the local Hilton, whatever it was, and his city was $59 a day, and it had free breakfast and they have a pool and everything. And he literally had said that is where I am going to retire to. And it is comical because there is no reason he cannot do that. But what it brought up is for me a hotel is not like a condo, a home, a vacation rental.
Pam: No, not at all.
Jeremy: It just feels like a hotel.
Jeremy: Like they are going to come in and change the sheets in the morning. I guess that is fine. I hope they change them. There are a lot of horror stories about that. Isn’t there, Jesse? So home away from home.
Pam: Home away from home. And I have actually had older people talk to me about that very thing. Like maybe they want to travel. They want to give up their home, so they just vacation home hop. A month here, a month there.
Jeremy: Yeah, have you guys ever, and I mentioned it yesterday, Jesse. Would you raise your hand? No. Have you ever checked out at all what we talked about Tuesday which is the home swapping?
Jeremy: Yeah, that is kind of cool.
Pam: Yeah, I actually have had a couple of owners talk to me about that. If somebody is interested, hey, I would swap.
Jeremy: I want to do it. I want to do it. I really am going to do it.
Jeremy: So how did you get in this business?
Pam: Actually, I started in hospitality way back when I was in college. Having that need to have a little extra money, so I actually worked at the local Town & Country in Cedar City as a housekeeper, and then when we moved here, Tai was actually in the car business selling cars for one of the local dealerships here. And kind of half stay-at-home mom at the time, an opportunity came up just around the corner at Timeshare. So I said why not? So I started there, kind of lower in the ranks.
Jeremy: Where were you at? Like Worldmark or something?
Pam: Yep. Worked my way up through the company and worked in Housekeeping, became the Assistant Resort Manager and then into the General Manager position.
Jeremy: So it is in your blood.
Pam: It is in my blood. I was raised in the restaurant business.
Jeremy: Here is the thing. She is good on radio, isn’t she?
Jeremy: She was nervous about it. I just want to tell you that.
Pam: Yeah, I was.
Jeremy: She is very comfortable. Very comfortable. But what I love about this is you actually do have experience in this realm. Right?
Pam: Right. It is a big difference because of what a guest expects when they stay at a place, even though it is not a hotel, they a lot of times expect the same type of treatment that they would get at a hotel, so having that hospitality background is something that we bring to that so that we can create those great experiences for people.
Jesse: That is really interesting because how many of other property management companies treat it like a long-term rental and it is just not.
Jeremy: It is not.
Pam: It is not at all.
Jeremy: How many? I do not know, but I guess what you are asking. Right?
Jesse: Right. That is interesting because that is a lot different message than I have heard before.
Jeremy: Yeah. Have you done a vacation rental? Have you stayed in one?
Jesse: No. But just talking to different people. We do not, I was going to say you want to make some really good money? How to package for people that want room service to come in.
Jesse: The reason we do not typically stay at a nightly rental is because my wife wants them to come make the bed. And I do not want to do it.
Jeremy: When you said room service, I thought you meant you wanted the $18 cheesecake.
Jesse: Well, that too.
Pam: That is what I thought he wanted, too.
Jeremy: You mean changing the linens. Okay.
Pam: We actually offer that. For a price, people can actually schedule that in advance. We will actually even go get their groceries for them.
Jesse: There you go. So there you go.
Pam: Have them set up.
Jeremy: There is so much.
Jesse: I did not know that. I was not a read-in.
Pam; Yeah, we can do that.
Jeremy: Yeah, why don’t you stop being such a, what is the word here?
Jeremy: Man, isn’t it funny that my brain just fried out.
Jesse: Once in a lifetime.
Jeremy: Why don’t you actually practice what we are talking about and actually go stay in a vacation rental? You are such a hypocrite. That is the word.
Jesse: I stayed in one in Boston.
Jeremy: Did you really?
Jeremy: That is cool.
Jesse: I have stayed in them.
Jeremy: Okay. You did.
Jesse: And then we come home, and my wife says man, the bed is not made.
Jeremy: I know. I know. She is like this just feels like home.
Pam: It is awesome.
Jeremy: So, Pam, kind of segueing along here, your company name is?
Pam: My Second Home.
Jeremy: My Second Home. Bingo. So you guys now manage, I said 30 on the Facebook feed. I do not know. What is it?
Pam: Yeah, we are at 26 right now and quickly growing because we are involved in a couple projects here in town. So everybody kind of knows that new area out there in Ivins where you have got Arcadia and Paradise. Well, we are actually one of the management companies managing for Ocotillo Springs, just behind those.
Jeremy: I know exactly.
Pam: We have got units selling and opening up so there will be a lot of those to manage here soon.
Jeremy: So here is what I want folks to do here this morning. By the way, I was just looking at our Facebook feed. If you have got questions or comments and you are watching this Facebook Live, please do ask.
Pam: Yeah, absolutely.
Jeremy: We would love it and that would be remarkable. So you have got 26 units and what does, if I am an owner and I want to have a vacation rental, but I wanted it managed because I do not want to fiddle with it, what does someone pay? Like what is general standard?
Pam: Yeah, standard is pretty much in our area is 30%, but it is pretty much across the board. If you look around the United States, when I have looked at other areas, it is 30%.
Pam: Some are a little bit higher than that, but I feel that that is fair.
Jeremy: Yeah, and that is what I have heard. I have heard 25-35 across the (indiscernible) –
Pam: And that is off of net nightly.
Jeremy: Yeah, net nightly. If I have, okay, in a year, what is a typical owner that you have here bringing in annually? I am going to narrow it down momentarily.
Pam: Yeah, annually, it could be, it just depends upon where the unit is, too, and what the nightly rate is for it.
Jeremy: Okay, let’s talk about somebody that has got a Las Palmas unit.
Pam: Okay. So Las Palmas unit, they could be bringing in anywhere from $15-25,000 in a year.
Jeremy: Annually. Okay. What is the most expensive property that you manage?
Pam: Most expensive property that we manage currently is at Estancia.
Jeremy: Okay, so what would they bring in in a year?
Pam: Actually, close to the same.
Jeremy: Isn’t that funny?
Pam: Because here is the thing. Because here is what people want. They want bang for their buck. Right?
Pam: So, when you tend to have a property that is higher-priced, sometimes maybe it does not get quite the occupancy that one does that is more fairly priced.
Jeremy: So Estancia, really quick. Describe the Estancia unit compared to the Las Palmas unit for the listener.
Pam: Okay, so basically the Estancia unit, the most expensive one that we have would be considered like a Presidential suite. So it is like a four-bedroom, four-bath unit, top floor unit, over looks the pools. Right? And one of the neat things about this property compared to some others that we do is we do rent it as a three, a four or a one, which is like a hotel room. We have a lockout on it. So we can actually divide the unit up. Our biggest units over at like Las Palmas, they are actually equally as nice. We have second and third floor units that are three bedrooms, three baths. Beautiful units with lots of square footage. What would you say, Tai? About 1500-2000 in one of those? Yeah.
Jeremy: Yeah, that sounds right.
Jeremy: Marlene asked a question. What is a normal occupancy rate for Arcadia, Paradise, and Ocotillo? Like for annually?
Pam: For annually, I am going to say it is going to be between, because they are still fairly new properties, you are probably talking between 30 and 50% occupancy in those.
Jeremy: I heard, and you guys know Kendall, and I was commenting about Kendall on Tuesday because he was texting me while we were on the air. So Kendall has done a lot of vacation rentals, and we are in this conversation, by the way, of creation versus competition. So, hey we are talking about their competitor. But he is a great guy. These are great people. He was commenting that at some of those places that you are seeing about 60% kind of max. But you have not seen anyone with more than probably 50-60%.
Pam: No, absolutely not. Not with as many rentals as we have in the area right now.
Jeremy: Yeah. There are so many. Are there, and you get to be opinionated here –
Jeremy: — and well remember the reason I say that is because I think people are afraid –
Jeremy: — and I have gotten quite opinionated on this radio show.
Pam: You have.
Jeremy: It is fun. It is fun. I am not quite Rush Limbaugh, but do you think there are too many units being built, vacation rentals being built and zoned?
Pam: I think the zoning is a great thing. I think that we probably have too many being built right now because the problem is with the amount that are being built, they are still a very costly piece of property compared to what an average home is. Right?
Jeremy: Yeah, that is what you said, Jesse, when you commented.
Pam: Except for what that ends up doing is driving down the nightly rate because we all compete. Every single company here is going to tell you that they do like market analysis, right, and we are watching what the prices are. Well, you have got to compete with your competitors and where people want to stay. So that drives down the price, the nightly price.
Jeremy: Yeah, and I have been, strongly think that we are building too many, and I am, remember the litmus test is the notice, did you notice test, and did you notice when you drive around town that everywhere you look there is another billboard or 8×8 sign in the ground that says we are building new units that are nightly, weekly zone.
Pam: I heard you say that the other day, and I see them too. We drive around to see them.
Jeremy: What is going on here?
Jesse: The opposing opinion about that would be is that the City just trying to offset all of the private owners trying to do the nightly rental in places that are not zoned. They either open it up to the City or keep it where they can control it.
Jesse: They are going to be here either way.
Jeremy: Correct. We have 1000 new hotel rooms right now. So 500 just this last year and another 500 coming online. That is a lot of hotel rooms.
Jesse: That is.
Jeremy: This becomes challenging. One of the strongest opinions that I have is I do not really advise for most locals that they are purchasing a vacation rental in St. George. If I were purchasing a vacation rental, I would be purchasing it in Park City, Coeur d’Alene, Idaho. In a place that I want to go. Right? And I want to spend some time in, and then allow these tenants to offset my costs at 30-50% per year.
Jeremy: That is just me.
Pam: So here is –
Jeremy: I do not know.
Pam: — here are two little tidbits for you.
Jeremy: Yeah, go.
Pam: So first one is even though we have that many hotels already, and I know we are building so we may reach that cap to where all of a sudden, we have got too many vacation rentals, too many hotels. But even right now, President’s Day weekend, and you can talk to other managers and they will tell you the same thing because we call each other to help each other. Our phones are ringing off the hook. There is no place to stay.
Jeremy: There is no room at the inn.
Pam: There is no room at the inn because we have got sporting events going on. We have got Parade of Homes going on, and –
Jesse: That is true.
Pam: — we are just packed to the gills. You heard people on the radio complain about the traffic issues and stuff.
Jeremy: Oh, it is, yeah.
Pam: And then the other end of it is as far as locals owning, now I have had several people come to me and I have actually had people that have purchased, and you can talk to other realtors about this as well that are kind of into selling the vacation rentals, but what is really, really interesting is that there are locals that want them. Why do they want them? This is a retirement community.
Pam: So now all of a sudden I find myself in a really small home. Our home is not very big, and we do not want to get bigger because our kids are grown. Now, all of a sudden, the families are growing. I have got three children, five grandchildren, ten children, everybody comes for Thanksgiving –
Jeremy: Oh, I see this. And you want to invite them in.
Pam: Where do I put them? So they buy one to make a little money, but they also can put the family up there when they have got big holidays or summer or whatever it is.
Jeremy: I do not hate that, and I like this alternative opinion. So here is a question. At 30-50% occupancy, let’s call it 50% occupancy because remember, all of our listeners out here, we have got Pam Eisham with My Second Home and they manage second home vacation rentals, basically, right, short-term rentals. Remember that the rate that you are paying per night is high compared to like a long-term, meaning a long-term lease on a Las Palmas unit is $1400 a month. But per night, it is $150 a night.
Jeremy: So could someone cash flow and even make, not just break even, but be profitable at 50% occupancy in their unit here locally?
Pam: Locally, I think if they buy right. They have got to buy in the right place for the right person.
Pam: For example, one of the units in Las Palmas, three bedrooms, three baths sold for like 260-something.
Jeremy: Yeah, it is getting expensive. Paradise Village we talked about. I used Paradise Village for the event posting on Facebook. That stuff is expensive. Pam, who are your owners? Who is an owner? Not by name, but who would be an owner? How much time, Andy? Three minutes. Perfect. Thank you.
Pam: So who would be an owner? So, like you said, a lot of owners are from out of the area. And interestingly enough, a lot of the owners actually are maybe snowbirds themselves, so maybe they want to come for a month or two down here. So they are from Idaho, from Washington, from all over, Oregon, whatever. Right? Northern Utah. We have several from Northern Utah. But, an owner is someone that maybe they want a place to stay themselves or be able to put their kids up, their brothers, their sisters. I have people that do that all the time. Share it with the family, but they want to make a little money on the side, too. Maybe they want to cover their HOA fees or all of their power bills and stuff. They may not always cover their mortgage –
Jeremy: So all of your owners independently wealthy people who just have $500,000 to buy a unit?
Pam: Absolutely not.
Jeremy: Say it with a grin.
Pam: They are people just like us.
Jeremy: The coolest thing about rental properties as we start to wrap this show up, and the coolest part is that, so Jesse, if you have a Roth IRA or a 401K, your employer, if you had a good employer, might match it, but the issue with your Roth IRA is who funds it? Who puts the money in every month?
Jesse: I do.
Jeremy: You do. Right? The cool thing about investment properties is that somebody else pays for it every month.
Jeremy: That is the zinger. By the way, you might, a listener out there might be somebody a dual-income family and he runs a Jiffy Lube and she is a teacher at Heritage Elementary, those folks would be incredible investors.
Jeremy: And you know what is funny? Those people –
Pam: And there are a lot of them out there.
Jeremy: And a lot of them, there are, and yet a lot of them do not think of themselves as investors.
Jeremy: It is like whoa, go get a property. Pam Eisham, thank you. So how do people reach you? Tell us how they contact you.
Pam: You can reach us at My Second Home Vacay dot com.
Jeremy: My Second Home Vacay dot com.
Pam: Vacay dot com. And you can also reach us at 435-313-5143. Glad to answer any questions.
Jeremy: Okay. I am going to give it again. 435-313
Jeremy: Yep, 313-5143. Guys, thank you so much for listening. Thank you for being on the air.
Jesse: Thank you.
Jeremy: You are amazing.
Pam: Thanks for having me.
Jeremy: We are going to have to have you back, and of course, listeners, thank you. If you have got questions about your own real estate situation, buying a rental, selling a rental, or you want to give us a vote for Best of Southern Utah, visit us at Sold in St. George dot com. Sold in St. George dot com. Over and out.