Episode Transcript
[00:00:02] Speaker A: Hey y'.
[00:00:02] Speaker B: All.
[00:00:02] Speaker A: Welcome back to another episode of the short term show. We're talking about Southern Utah. This is our Southern Utah series with our expert agent in that market, Cody Roberts. And today we're talking about the thing. Everybody wants to hear about the thing. Everybody's been waiting for us to publish the numbers, the income numbers. We're going to talk income, we're going to talk a little expenses. After that we have Rachel Gagnotti from STR Insights. Good friend of mine, helps me with all my New Orleans stuff. Thank you for doing that, by the way, Rachel. Anyway, thanks for coming on. You want to say hello?
[00:00:36] Speaker B: Yeah. No. Hello. Morning. It is always, always a pleasure to be on with the rock star of strs. My favorite.
So honored to be here. Happy to talk Southern Utah because I, I personally love it. This is an area of the country that I just, it's, it's close to my heart. I've spent a lot of time up here, so I feel like I know it well better than folks that have just only looked at it on a map. And I think there's still a ton of opportunity in the area. And you know, it's a national park market. And maybe most, I don't know how many people understand this or not, but there's, it's really well known for being kind of the center of the big five. There's actually five national parks in this part of Utah which you're not going to find anywhere else in the country. So it's, it's a pretty interesting market and still fairly early on, I guess, in its development amongst your more seasoned STR investors, which is pretty intriguing to me because I've been going out here for pushing 30 years now.
[00:01:38] Speaker A: Oh, wow.
[00:01:38] Speaker B: So it's still got a lot of
[00:01:39] Speaker A: room to run, you're saying?
[00:01:41] Speaker B: Yeah, it does. It's got a lot of room to run.
I'm sure, you know, y' all can, the agent can speak to this too. But it's an area that it hasn't been terribly slow to develop. It's difficult to develop out here. So while there is new construction, you're not going to see new construction reeled off here like you're going to see someplace like the Smokies just because it is a less populated area. And the expense to actually bring new starts or new construction homes to the area is higher than a lot of other areas.
So there's just some challenges. It's almost a self regulating market in that way. And you know, within the market there are multiple sub markets right but it has been to some extent self regulating. But at the same time, I think a lot of people, those that follow you, obviously every. I think everybody knows where the Smoky Mountain national park is. I don't think a lot of people know Zion national park in southern Utah is the second most visited park in the country.
[00:02:39] Speaker A: Oh, is it? I thought it was Grand Canyon at Zion. Huh.
[00:02:43] Speaker B: They, they run neck and neck, but Zion likes to continue to tell people that they are. And if you haven't peeped their tick tock, it's great.
[00:02:51] Speaker C: Yes.
[00:02:53] Speaker B: Yeah. You have 5 million visitors a year coming to Zion and I think it definitely gained a lot of interest during the COVID period. But unlike a lot of the smaller parks that got that Covid bump, Zion hasn't given theirs up. They've held that steady visitorship since that time frame, which is an interesting statistic that we don't see. Like I said, I track a lot of national park markets because I have some preference towards them. I believe that there's still a lot of opportunity in those kinds of markets in the country for investors. And Zion really, really, really has been very strong and continues to show that strength.
And they don't have a ton of lodging options for people. There's.
I went further for you than I would normally in my day job, but I actually looked up number of hotel rooms. So Zion, according to multiple data Sources, has between 2000 and 2500 hotel rooms available that run a 65% occupancy year round. And when you think about the greater Zion market, there's. There's still only a little over 4,000 short term rentals that are running about a 55% occupancy rate.
That's a pretty decent discrepancy for 5 million visitors annually.
[00:04:09] Speaker A: Interesting.
[00:04:11] Speaker C: And also I was going to add to that that the governor put out an economic report forecasting that southern Utah or Washington county will double in population and growth within the next 15 years. And so that's quite substantial for this, for this market. And if you take a look at what real estate has done in the last 10 to 15 years, which is pretty much doubled in values, obviously past performance is not indicative of future performance, but you can extrapolate that real estate market is definitely going to grow and possibly double again in the next 15 years.
[00:04:48] Speaker B: I would, I would tend to agree with that. Yeah, I think so. And Utah for some reason has been an insulated market just as a. When you take the state as a whole, your appreciation rate is very, very strong. As states go in the Country. I, I don't pretend to understand all of the underlying economics and why that actually is, but it's something that I've noticed. It's insulated in a way. Kind of like Colorado.
They don't have the super duper highs, but they also don't have the super duper lows. They just have the steady, you know, trend line on appreciation, which is crazy for the, you know, you don't have a huge occupancy that like a huge population across the state. So it's intriguing to me in that way. But you see it too with the development. I mean, when just price per square foot in these markets that we're talking about is going to be elevated compared to others. But it really is because of the lack of inventory.
[00:05:42] Speaker C: Absolutely.
[00:05:43] Speaker B: Yeah. So, you know, good signs.
[00:05:46] Speaker C: If you're an investor that looks at
[00:05:47] Speaker B: the whole picture and wants to think about protecting your interest and your exit, it's not a bad place to really throw on your radar because things do seem to transact the good stuff. I mean, I know I've gone after more properties in Utah than I've won because good stuff comes to market and it just goes. And there isn't really a lot of difference between, you know, list to close prices. They've got just a very, very strong market there.
[00:06:12] Speaker C: Yeah, the city of St. George was named the fastest growing city when it comes to real estate in the nation a couple of times in a row a few years back.
So it's. There's just this draw like most people know. If you say St. George, they know they've heard of it.
A lot of people have traveled through here, whether they're going to the five national parks like you said, or they want to come here on business or golf or just, just anything. There's just a lot of draw that brings people to southern Utah, and it's a very unique part of Utah. It's got a very specific climate compared to the rest of the state.
We've said it before on previous podcasts that it's 300 plus days of sun, so you're pretty much guaranteed great weather.
And that that alone brings the draw in. They don't have to worry about getting rained out for the most part, and they definitely don't have to worry about snow or it being too cold. It's just always warm and sometimes hot in the summer, and they just love it. For outdoor activities. You just, you're just almost guaranteed good weather.
[00:07:15] Speaker B: Nice.
[00:07:16] Speaker A: All right, so the main event, let's talk about the numbers on different Bedroom counts.
Rachel. So you ran the numbers on the St. George Zion hurricane area. What did you see overall?
[00:07:34] Speaker B: Yeah, I think where I want to start is you have to under like I want the listeners to understand that there's different sides to the market. It is all quote unquote, the same kind of Zion on the west side.
When, when I look at this market and I think about the, the sides of the market you have, we've, we've mentioned ZION with their 5 million visitors, but you also have Bryce Canyon national park, which is, they're about an hour apart from each other. Most people that come to the area will, will do Zion first and then you've got the, the folks like myself that are national park travelers. You get within an hour of a second when you're probably going to go hit that one too. So don't sleep on that. But to understand kind of the geography and I also made you a cute little map, Avery. I don't know if you can link that somewhere when you're coming from the west. So I look at St. George and Hurricane as kind of the, that the anchor for the market. They are the largest pockets. That is the west side and where we know from looking at traveler data, where a lot of the visitors are going to come from. Because a lot of people, while this is a drive in market for some areas of the country, it also does draw people as a fly to market. So a lot of folks are going to fly to Las Vegas and then they're going to get on the interstate, they're going to drive up and they're going to come through St. George and Hurricane on their way to the parks. That's also the largest of the cities that have, you know, all of the other things that you're going to need as far as infrastructure is concerned. So I want to start in St. George because it is the largest kind of population hub, largest city. It also has the most overall number of short term rental listings. It also has, you know, hotels.
You're going to have the highest amount of competition in that area, but you also have consistently kind of the higher bands of revenue out of St. George. And I would lump Hurricane and again, talk to your realtor who does know the ins and outs of the individual pocket. But what we do see is that things are relatively the same between St. George and Hurricane as far as the profile from a revenue standpoint, what bedroom count works and then the profile of the actual properties that are working the market. So I, this is going to be a theme whenever people talk to Me, I don't love the middle of any market. Generally speaking, I find that there is less opportunity because the three and four bedroom size homes in most markets that's what's in abundance. Right? So in St. George in Hurricane I like one and two bedroom homes.
I, I will caveat that and say there are going to be some, some condos that can work in this market. It's interesting. I, you know, never really thought about condos in Utah, but in some of these places you are going to have the option of a condo and some of those will work and revenue is going to work just fine or one and two bedrooms safely. And I want to, you know, temper people's expectations. We underwrite a lot of times for our clients to the top 10% of the market. I don't think that's fair to just come on and tell anybody to go in this market you can be top 10%. So I'm going to give you some the averages. But average revenue range on one and two bedrooms. On the St. George hurricane side of things, you're looking at 50 to 70 thousand dollars in gross income. Okay. There are 1400 short term rental listings in that, in that size. So they are in abundance and it is going to be, you know, kind of harder to pick out your pocket. But what we do know cells here are, I don't want to say unique but the more modern. So there you have a lot of newer builds in this area. Just stick to those. Don't go buy the ones that were built in the, the late 70s, early 80s. They, they just don't have the facade, the physical appearance that the travelers are looking for. Stick to the stuff that looks more modern, you know, clean lines and just has that look about it. That seems to be what travelers are responding to. And we, we're seeing that kind of carried over across all the bedroom counts.
You know, the three bedrooms in this market, again I would just kind of stay out of that range there. In my opinion that that particular bedroom count in this area is a little bit saturated. I know we don't like the word but you're going to have the most competition there.
Therefore it makes it a little bit harder to separate yourself if that's what you can afford. I honestly would tell people like click down. If your max budget only allows you to buy a three bedroom, take a look at some of the smaller bedroom counts because I actually think that you will perform just as well, if not better because you have less competition in that space, then I like to jump over. So when I'm just St. George and the hurricane side. I really like the five bedrooms and then the six to seven. And I know that sounds gigantic, but that's where the data really diverges, right? So five bedrooms, you're going to see 120 to $150,000 in gross annual revenue and there's less than 600 of that bedroom count in particular in this area.
When you get to the six and seven bedrooms, there are less than 300 of those available.
And the revenue, that's again where we really see the largest divergence. So you're going to start somewhere around 130 in gross annual income and that can go, I mean there's properties doing over 300, but safely it's 130 to $230,000. The biggest to the biggest separation in the data really does come as you get into those big bedroom counts. So again like your ones, twos, threes, fours, they're all kind of average and they run about very similar profile to a lot of other markets that are out there. But you get into the bigger homes, you're really going to start to see that divergence and you're not seeing this massive jump up in price point to get to those five and six bedrooms from the threes and fours. So for me, you know, bang for your buck really is either stick to the small ones or go to the big ones. Kind of stay out of that middle.
Again, I can't stress enough that the newer built, more modern looking homes are what's selling in this market. You know, don't try to stretch your budget to buy something that was built in the 80s that just doesn't look like everything else around it.
You, you will have trouble competing in the market. It, it's interesting to me that people have this, you know, they, they have some, some taste and they seem to want these places that are classy and have that modern aesthetic to them. And then if you can find something with a private pool, there are, there's plenty of that inventory by the way. Try to get a pool. If your budget can afford for you to get a property or that already has a pool on site, that's where you're going to get the higher end of those revenue ranges. You're seeing that with the properties with private pools.
[00:14:16] Speaker A: Good to know, good to know. So I'm looking at the, you put an Airbnb link maybe for like a top property in this and I'll link this guys in the show notes in the spreadsheet.
And it just so happens to be A short term shop client. They obviously bought in Utah before we got there, but they bought several with us in the Smokies and they're wonderful. So.
[00:14:41] Speaker B: Yes, I only shared that because I knew you would know who that is and thought you would like to see.
[00:14:45] Speaker A: Yes, I never forget.
Okay, cool. So would you say that, that, that St. George hurricane area is probably the best, I don't want to say safest because I don't like that word, but easiest to get rolling place to buy?
[00:15:03] Speaker B: Yes, I would say because you're going to have more inventory, more available inventory to choose from over there. It would be the easiest spot to start to get rolling. And again, it depends on your buyer's preferences. Some of these areas are remote.
If you are the person that is, you know, thinks that you have this romantic idea that you're going to own something in Utah and you're going to go visit it, you may want to stay in a place that is close to civilization when you do go visit your property. And I think you're going to find more boots on the ground, more of, you know, infrastructure for the service providers because you have population in that particular area. It is also very, very easily accessible and it is the main traffic corridor. Again, you know, obviously people can come from the other sides, but we do know that looking at travel data, a lot of the people that start to do this big five loop through southern Utah, if they fly in, they will come out of Las Vegas. The first city that they can hit on that route as they get into the section of Utah is going to be the St. George area.
Okay, that will not change. Right? That's just not going to change. It's always going to be kind of the anchor and the jumping off point for the rest of the region.
[00:16:18] Speaker A: Okay, good to know, good to know. So we like St. George and Hurricane one to two bedrooms or five bedrooms or six to seven bedrooms.
[00:16:28] Speaker B: Correct. And again, it's not that you can't, it's not fair to say anything can work in any market. I would just caution people to.
When you're looking at the price to rent ratio, what you have to pay to acquire the threes and fours, their revenue really isn't that. It's not that much higher than the, the ones and twos and it is substantially lower than breaking into the fives and sixes.
So I weigh that. Right. If, if that's what fits your family and that's where you're comfortable, it doesn't mean you can't make money in that. I want to be Very, very clear about that. But for me, when I look at the overall picture of a market, I'm looking for the, you know, you're looking for that window of opportunity, that soft spot where there's less competition in a certain bedroom count or, you know, whatever the case may be, that that large divergence that we're seeing when you get into those six, you know, as you get to the five and six bedrooms, where the revenue really starts to jump up relative to what they're paying. So we like to kind of pick our spots, but that does not mean a three or four won't work for somebody.
[00:17:30] Speaker A: All right, good to know. And then to recap, the high performers are newer, like modern built and private pool, if you can get one.
[00:17:37] Speaker B: Absolutely, absolutely. I would imagine that you could even put a pool in here because there are a lot of pool homes in, you know, a desert region. But there's so much inventory that already has a pool. I would look at those first again, if your budget allows and you really want that modern aesthetic.
[00:17:54] Speaker A: All right, Cody, do you have anything to add before we move on to some more ancillary?
[00:17:59] Speaker C: I think that pretty much covered it. I do know that Utah is. Is one of the largest supplier of new homes across the nation. We have like per. Per capita. And so what Rachel was saying by the newer homes are the ones that people want.
It's so true.
If you are going to look at an older home and consider it, it'll have to be renovated because it just. There's just so much newer inventory that when guests are looking to book something, they want to stay in a newer home. And it's got that look and feel and that desert modern design theme. That's what they're looking for and that's what sells.
[00:18:45] Speaker A: All right, So I know there are going to be people on here. They're like, I. I like to go against the grain. I like to invest in the places that people aren't investing, which is not me, but you know, different strokes for different folks.
So a couple other places outside of that main jumping off point of the St. George hurricane area. So we've got a new or newer entrance to Zion national park on the other side in the Glendale Orderville area. And then we've also got Kanab, which is kind of like its own little remote destination. And my. I'm glad y' all told me how to pronounce this before we started recording because my Southern ass was like K nap.
[00:19:27] Speaker B: So
[00:19:30] Speaker A: anyway, let's talk about that new new entrance side. Rachel, what did you find there?
[00:19:36] Speaker B: Yeah, no, I'm glad you brought that up. So this is something that we've been watching, obviously, internally. Again, I'm just a natural, a national park kind of ner, so I pay attention to these things. We knew that the east entrance was coming. It's great. If you've been to Zion in the last couple years, you know that the traffic is horrendous trying to get in the park during peak season, so they definitely needed it. But again, I think it's just. I call things out like that because I think it's a testament to understanding the strength of the market that we're talking about. There is so much interest in this national park that the federal government decided to spend money to open up another east entrance, which opened up some markets, these little towns that existed, and there were some rentals there, but they. They really didn't do all that well, because if you, you know, on paper, it looks like I can throw a rock and I can hit the park, except for I have to drive out and around. And that might add an hour and a half to my trip, which cuts down on, you know, you're a mom. I'm a mom. The families that travel, you do any kind of digging and you find out that you got to load up your tired kids or your. Your difficult children and add time to the trek. It really cut out the families.
So you have the younger folks or the single travelers, the couples that would go to that side. But we really didn't have the opportunity to kind of get the family avatar into that side because, again, it was just not accessible for them. It was easier for them to stay on the other side by St. George and Hurricane, now that they've opened an entrance. And some of this is theory, but I. I get paid to theorize for people, so I'm going to say that I believe that that is where we're going to open up some opportunity. And we're already kind of starting to see that in the numbers as that market has started to establish itself now that we have that entrance. So unlike what I said about St. George and Zion and. And, you know, think kind of key things to point out about this side. One, the real estate values are a little bit lower because it is not as developed as St. George, so you can get a little bit more of a bargain on this side. There is a lot less inventory.
So, you know, if you're the person that sees a good listing and you're like, yeah, but another better listing is going to come up next week, it might not. Okay. The reality is only so many places come up for sale over here because there are only so many of them. And yes, there's new builds that are starting to pop up, but it's not the most conducive area to just drop houses. It's an interesting terrain over there. So if you see something that you like, I guess all of this is to say, like, don't hesitate. It kills me when people have something great in front of them and they don't act on it because they think something better is going to come. This is not that kind of market. There are not a ton of available listings, but we see that translate, you know, kind of in the numbers as well. So in Glendale and Orderville, and I kind of lump those two together. They're basically what and what side by side. On this east side entrance, I actually like three bedrooms here. There isn't enough data on the ones and twos that. Not that I don't think they work, but there's just not a lot of them out there.
So I really started focusing in on the threes, the fours and the fives. So starting with the threes, you're looking at 65 to 90,000 in gross revenue. And again, remember, you can have that at a price point lower than that. St. George and Hurricane side, there's under 200 three bedroom listings on this side.
And you're gonna. That theme is gonna. You're gonna see that all the way through our four bedrooms, you're looking at 70 to 110,000 in gross revenue. And they're less than 150 of those active on this side. Out of this, these two little towns that I'm talking about, and then the five bedrooms, we again start to see a little bit of that kind of big divergence. Again, heads and beds comes into play here, but that's. Those are going to run you 75,000 to 150,000. And that's. I'm still cutting the bottom and the top. There are places that are going to outperform 150,000 in the five bedroom. There's places that'll do more than 110 in the four bedroom and so on. But giving you a reasonable range for the average operator who doesn't make this their life's work to be the number one listing in the market, that is a reasonable expectation of a revenue range. And when you get to the five bedrooms on this side, there's less than 100 of them. So again, when you kind of compare that to how many available listings There are on the other side, we have way less competition on this side.
You. But you also have less available inventory to choose from on this side. You're looking at a little bit of a different profile. Yes, I still want as modern of a structure as I can get. But you will look, the second you look at the listings, you'll understand what I mean. They are not going to look the same as the modern builds on the St. George side. They're like, I don't know. And maybe one of y' all can jump in here like modern, rustic, modern adobe. It's a little bit different on this side, but I really do focus on properties that have views over you here. So on this side of the park you can really get some exceptional views. You need to make sure that that's part of your buy box views are imperative on this side.
We're seeing that the, the travelers that are coming to these listings over here are raving about they feel like they're a little bit more in nature. They like that seclusion, they love those views. And of course now the park has become accessible to them if they do decide to stay on this side. So think more nature.
And those folks that may be natural park purists that aren't going to go out to, you know, eat dinner at a fancy five star restaurant at the end of their day, they may just grab some stuff from the grocery store and come home and cook because they're spending most of their free time going to the parks or just trying to hang out in nature. So you're going to want to play into that. But I, my personal preference in this particular market right now I'm watching very closely. Glendale and Orderville. There was a, there was a two structure property that was on the market maybe a year ago for the first time. Didn't sell. They couldn't get any, anybody to bite on it. Just under a million. The guy brought his price tag all the way down to 800,000. Mind you, this was a, you know, a new build, but it was two structures like a three bedroom and a one bedroom. Super cool. He had a stargazing dome and a little climbing wall built into the one bedroom.
That thing. I just went and looked it up last night when I was doing this research has already broken $150,000 and it was sitting on the market for a year and it come all the way down to 800. I must have shown it to four or five clients that wanted a national park market. I was like, this is an opportunity. Nobody wanted it.
There is Opportunity on this side because we're starting to see you can finally bring that kind of nature lover, those exceptional views and still get that modern. But you have that easy access to the park that we just didn't have before. So I'm really watching this very carefully to see where this market goes. But I think there's a good bit of opportunity on that east side Glendale order Bill.
[00:26:32] Speaker A: Interesting.
So it is not going to be as much of a robust vendor pool over there though. So keep that in mind that opportunity. There's probably not a lot of cleaners though yet. Probably not a lot of, you know, just the different services that pop up to accommodate you as an out of state owner that you might have over in the Hurricane and St. George area. I have such a hard time saying hurricane that way. I really want to say hurricane. My grandmother used to call them hurricanes and I just feel like Nana mispronouncing things. I know it's hurricane, but I can't.
[00:27:09] Speaker B: It's so hard.
[00:27:10] Speaker A: Anyway, okay, so let's talk about Kanab because that's kind of like its own little. It's a little further away from the park, but it has kind of become its own little remote destination.
[00:27:26] Speaker B: I, I want to start with. So Kanab is. I say cannabis. Maybe I'm saying that wrong.
Kanab is interesting.
[00:27:36] Speaker A: How are we saying it?
[00:27:39] Speaker B: It's interesting in the sense that geographically again I, I encourage anybody that's interested in southern Utah, familiarize yourself with the map and just where things are located relative to other things, what you're going to find.
Again, I think I've mentioned this a few times. We're national park people. So I love the national parks. I'm trying to see them all. I want my kids to experience that. I was just here two years ago, brought my parents, my sister and all her bad kids.
We ended up choosing to stay in Kanab of all places because I am a planner and I wanted to. We were going to do three of the national parks together. It is uniquely positioned in the market to be this wonderful jumping off point to do Zion and Bryce and the Grand Canyon, which to me again, if you are, maybe this isn't the place for the first timer to go. But if you're the experienced investor or you have at least one or two under your belt and you understand some aspect of just kind of marketing and how to do your listing copy to explain to people the benefits of being in this area, it can add will show up to another. I know I'm getting a little bit off Topic. One of the tricks that we use. When I'm looking at an address or I'm thinking about an area, go to Airbnb and search whatever the big traffic driver is in that market and see if the place that you're looking at pops on that map. So what's interesting about Kanab is if you put in on just directly into Airbnb and say, I want to go to Bryce Canyon Canal, show up. If you put in Zion can, I will show up. If you put in the Grand Canyon, cannabis will show up. Why? Because it's in the middle.
So revenue is lower here. But I want to, I want to, you know, be very clear about how I explain this. Revenue is lower here because there are not good listings. There is opportunity for somebody to do better than what we see in this particular market. It is an underdeveloped part of this general region.
I personally stayed in this area and as luck would have it, the exact house that we stayed in happens to be on the market today. And I can tell you why that property is only making $75,000 because I stayed there. So I can tell you all the ways why that place should be making a lot more money than they are. Because it was a great spot to me. I think, you know, again, everybody has to weigh what's valuable to them. St. George and in her hurricane are, they're the bread and butter market for here. They're that gateway town. You have plenty of resources. You have all of the, you know, the modern amenities that certain travelers are going to want. If you are, if you think that you can capture families like mine that come out and try and do a little bit of everything because we're, we're taking a long plane ride just to get out there. And I want to see more than just one place. I do think the Kanab is a great central hub. There are enough listings that we do have data. So again, no real small places here. And I don't think this is a small place play. This is not the market that like this is not the spot to go do a one bedroom couples retreat. That's not it. They're not coming here. This is families. It's the families that need, you know, enough bedrooms to spread out. And then again, we're just missing the amenities this market really didn't have.
I mean, I can't tell you this is a whole nother thing, but it took me three months to find an Airbnb to stay out in this area that worked for my 70 year old father and my sister's. Six year old and everybody in the middle. That was also where it made sense for us to locate ourselves based on how we were going to do it. And we're not alone. I mean, that's, that's what I kind of come back to on Canop is it is a great central point for families to do multiple parks. And you're still in civilization because I had restaurants, Main street, you know, the banks, the grocery stores. There were multiple coffee shops to get the coffee fixed. There were. I could get all the services that I need. Certainly not as built up as St George, but there was enough to support us as travelers. There just weren't quality listings, but there are, there are opportunities. There's plenty of inventory here that somebody could take to the next level and make that, that top tier listing. So I don't want people to be discouraged when they hear these numbers. Three bedrooms in Kanab. There's a little over 200 of those available in the market.
They're right now the average 50 to 85,000 gross revenue. Which you, you know, you hear that and you're like, that's not, that's not great. There is most assuredly room for more in this market.
Everybody is kind of on an even plane in an, in an unusual way that I don't see in a lot of markets. There is nobody separating themselves from the pack. Literally everybody is average.
So we have no idea what somebody can come in and do if they separate themselves from the pack. There is traffic here. There's just not a great listing for them to land at. And I can personally attest to that.
Four bedrooms, 55,000 and 90,000 in annual income. There's only about 50 of those in the market. Five to six bedrooms. There are only 16 of those guys in Kanab, Utah. 60 to 110,000 in revenue.
Again, I like. It's. It's pitiful. The listings are pitiful.
Somebody go buy the one that I stayed in. It actually has a little casita. I promise I'll send the listing after this is over with. That one should be making money. Could be making good money for somebody. It's priced very well. You're going to find newer built homes here that do have some views, they have some seclusion. But again, I love that it's so central and we're starting to see it kind of develop, but it's certainly not there yet. I think this one has the furthest to go as the other areas around it develop out and people find less and less opportunity. I do think we're going to start seeing where people look to Knob. But again, I just think it's one of those places where you, if you have a little bit of exposure experience under your belt and you can see that vision and why that this area is so valuable from a location standpoint, you could really do something special out here.
[00:33:45] Speaker C: Yeah. And the great part, and I think you've already mentioned it, is in the Canab market, like your price per square foot on what you're going to buy for real estate is substantially less than what you're going to see in the St. George Hurricane Market. So you're going to get your, your entry point is going to be much less and you're going to get much more square foot bang for your buck. Right. There's a five bedroom house right now that's like 150 bucks a square foot. It's, it's phenomenal and it's brand new. They just built it and we already have a client that's interested in making an offer on that as soon as they're done. The other thing too that I would add is that people miss on Kanab is it's got a world renowned, one of the largest animal sanctuaries and it's called Best Friends Animal Sanctuary. And it's surprising I didn't know because I just kind of grew up around it. I just didn't know how world renowned it was. And I had a client come internationally and his, his wife. I was like, wait, I thought your wife was coming with. Oh, she went to Kanab to volunteer at Best Friends for the day. I was like, whoa. Like didn't know that people from the Netherlands even knew about it. So there's another draw there that is quite surprising and it brings in a lot of people too.
[00:34:59] Speaker B: Cool.
[00:35:00] Speaker A: Well, I think, I mean, that is a very comprehensive, great job, Rachel. Very comprehensive presentation on the area. In terms of income.
Cody, we're not going to talk about expenses in terms of like how much is the electric bill, but is there anything that people need to know when they're looking at these income numbers about, you know, property taxes or sales and occupancy tax, things like that?
[00:35:25] Speaker C: Yeah, definitely.
And a lot of it is driven by the state and then by the county, but also by the local city.
And generally speaking, because every city is going to be different within a couple percent, but generally speaking, you're looking at about 12% that you're going to be paying for your sales tax, your occupancy tax and just little stuff like a half percent here and there.
And what you'll also find out is depending on the city. So I'm pretty sure that St. George and Hurricane already do this, but they'll have Airbnb and VRBO will a lot of times already have agreements with the city and the state and they collect that tax on your behalf and pay it on your behalf. Or some of these smaller cities that we talked about, Laverkin and Kanab and Glenda, they're not going to have those. So it's still your job to collect those and pay pay.
And some of it's easy, like you'll just pay a check to Utah State and they'll disperse it where it needs to go. And then some of it you unfortunately have to do yourself where you'll have to pay some to the county and then some to the city and, and kind of do it that way. So depending on which one you're in, it takes a little bit more management, but yeah, just plan on roughly that 12% and I think you're going to be, be safe. But always call the city, call the county and verify what those will look like.
[00:36:48] Speaker A: Totally always do that yourself, guys.
Anything else related to income or potential expenses outside of just your normal utilities and stuff, we need to think about. Do you know about how much cleaners charge Cody, or is that too subjective? Are they all kind of over the place?
[00:37:05] Speaker C: It is pretty subjective because it can depend on like what you want them to include. Include versus like are they bringing all the linens?
Do they own the linens? And there's pros and cons to that. That costs a little bit more to the service. If you're stocking all that and they're just washing it on site with your washer and dryer, it can be a little bit less. But yeah, it's, it's, it's, there's, there's fairly quite a range. Obviously a two bedroom is different than a seven bedroom and you also have to think about not just the cost of the cleaning but the time that it takes some of these larger homes.
Now to be clear, you can do a turnover same day, but there's a lot of cleaning companies on these larger homes that will not do it same day. And then now you're losing out on a whole other booking. And so we can show you ways to get around that because it's possible. But just think about a 5,000 square foot home to try to clean that and make sure you've got it done in time for the next booking. If you have a same day booking, can Be challenging.
[00:38:13] Speaker B: I had a follow up question really quick, Cody. Land to building value out here. I mean land value seems really, really low.
[00:38:23] Speaker C: Well, I don't think so. I guess it depends on what you're comparing it to. But yeah, if you're in the St. George Zions more market if you, if you want a lot to build a home on, you're going to be 170 to $250,000. And that's not even getting into the, to the high end ritzy neighborhoods. And that's just for the lot just to build, just to start building on.
And I think that's the difference when you go into the Kanab and Mount Carmel and Orderville area is the lots are much more affordable so you can drive a much better price point. Same with going into Cedar City which we actually didn't, didn't talk about. But Cedar City Market, the land is, you know, you can still find a lot there for maybe 90 to 120,000. But yeah, in the St. George hurricane area it's, it's very expensive to buy the lot just to start building and then it's the building permit fees on top of that.
You know, Hurricane, you're going to be $18,000 just to get your building permit.
So it's pretty expensive for all the hookups into the city. And then Avery and I were talking about this previously but the, we're a desert and some people don't think about this, but water is a commodity of itself and you have to have water rights. And so part of that developing a lot out here you have to pay the water conservancy district and it can be between 15, 20, I've heard is sometimes $30,000 just to have the right to connect to the water system.
So there's, there's quite a, quite a bit of expenses when it comes into building and obviously that drives the real estate prices out here.
[00:40:04] Speaker B: Yeah, no, I should have clarified when I've looked at a couple of these properties in Kanab and on the east side like Glendale, Orderville, that area. And it seems like the building it make for nice cost sex because most of the purchase prices, the building value, land value seems low. But you're right. St. George on the other hand, I have seen those lot prices.
Yeah, yeah. There's a, you're paying for civilization over there, right?
A developed city.
[00:40:28] Speaker C: Yeah. There's a great subdivision community out here called Black Desert and there's a Black Desert golf course which is extremely popular. But it's in a city called Ivins which is the second most expensive city in the state of Utah. But to get a lot out there, just the building lot, you haven't even started going vertical yet. You'll be 8, $900,000.
Yeah.
[00:40:51] Speaker B: Utah, Avery. All the money in Utah, it's just, it's mind boggling sometimes and we scratch
[00:40:57] Speaker C: our heads because people are buying them and we're just like, man, like it's crazy.
[00:41:02] Speaker B: Yeah, I, I, I have really, we, we've offered them way more properties in Utah than we won. I, I mean it's, I'm always shocked at the amount of competition that is out there for some of these properties. Yes.
[00:41:13] Speaker C: Yep.
[00:41:16] Speaker A: Well, cool. Well, thank you guys so much. Very, very good, informative session here. I'm sure the listeners are going to love it. Guys, if you want to get a hold of Rachel@STR Insights, how do they do that? Rachel,
[00:41:30] Speaker B: I'm, I'm in your Facebook group. That's probably the easiest way to find me. I'm the only Gadi in your Facebook group.
[00:41:36] Speaker A: And how on earth do they spell Gatti if they're listening on?
[00:41:40] Speaker B: I know, I mean this is the problem, right? It's G, N, I a D Y. They could always say, hey Avery, how, what's Rachel? Just tag her or you know, my email rachel.gagnottitrinsights.com or hit our website. You can actually send a message. That way they will put you in touch with me just strinsights.com all right.
[00:42:02] Speaker A: And if y' all are interested in buying a short term rental or learning more about the southern Utah market, you can get in touch with Cody by reaching out to us at agents at theshortermshop. Com. Thank you guys so much for coming on. And listeners, we will catch you next week.
