The locals ‘Guide’ to owning a Vacation Rental in the Greater St George area

If your client or yourself are getting ready to buy a second home in the Greater St George area, and part of the economic strategy is to rent it out when not using it, then you may need some insight on what PUD’s or zoning laws allow, their associated ordinances and licensing requirements and general strategies to make the experience successful.

Escape Properties, a member of VMRA (the Vacation Rental Manager Association) and only National Association of Realtors designated RSPS (Resort and Second Home Property Specialist) firm has been managing and operating vacation properties since 2008 in the area with thousands of successful guest stays.  We have spent a great deal of time and effort compiling this information for your benefit.  Where possible we have contacted municipal authorities to get the most accurate and relevant information as possible.  


Feel free to reach out to us for a specific analysis of your vacation
property – no obligation.  (435) 414-1525 or email  kendall@escape2stgeorge.com.


Vacation Rental homes have been around for hundreds of years in Europe.  In the United States most vacation homes have been concentrated to sea side communities or mountain cabins.  In the last 15 years with the advent of what is termed as the ‘sharing’ economy there has been a boom in the FOR RENT by OWNER options across the country and globally.  

Communities like St George that are located near destinations like Zion National Park or the Grand Canyon or have developed a sports tourism options have seen a boom to nightly rentals and second home ownership.  

There are 20 individual cities within Washington County and all with vastly different approaches to short term rentals.  Not all areas are geographically ideal for a nightly rental business models.  As such this article will focus on what we term as the Greater St George area (90% of our population) and will cover the cities of St George, Washington, Hurricane, Santa Clara, Ivins and La Verkin.  The cities of Toquerville, Rockville and Springdale are  near enough to Zion National Park that we will address them in a follow up article.

 

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St George

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Washington

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Hurricane

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Santa Clara

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Ivins

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La Verkin

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Springdale

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Toquerville

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Pine Valley

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New Harmony

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Rockville

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Hildale

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Veyo

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Dammeron Valley

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Leeds

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Virgin

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Enterprise

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Apple Valley

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Central

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Grafton

Our team gets asked often “Where is the best place to buy” a vacation home.  The simplest core answer is – “where ever it is allowed”.  Sounds simple right.  IF the property is not permitted for nightly rentals, and you want to off-set your costs with renting it out nightly – you are wasting your time and our time thinking about it.  There isn’t enough money or motivation to deal with code enforcement violations, angry neighbors, tax implications etc. to be successful with non-zoned units.  (Unless you are interested in operating the property as a ‘temporary housing’ property.  Ask us for details on this option)

 

To help in our discussion, we need to review a few terms and types of lodging options one may encounter in Southern Utah.

Hotel/Motel
Zoned commercially or high-way commercial.  Located in town on major traffic by-ways.  Single rooms with single bathroom, mini-fridge.  Large parking lots, no group gathering areas without a fee, elevators, limited views.  We have a few nice hotels – clean, good amenities, comfortable – but we don’t much in the way of a resort hotel that you want to take a vacation to per se.  They are building one in Ivins near Tuacahn.  I think it will have its own degree of success but may or may not have any opportunity for private unit ownership.

Glamping/Yurt/RV

These are options, but will not be discussed in this review.  Glamping is ‘glorified camping’ and is usually in a YURT or Tent.  There are a few that have popped up in the area around Zion National Park and are popular with the urban camper.

Shared house
(room for rent).  Also known as the Airbnb Model.  Owner lives on site.  Offers a space in the home for rent, usually a room with access to a private bath but all other areas of the home typically are shared.  Grandma’s house falls in this category.  Usually only accommodates 1-2 persons but may vary.  (In St George, even staying at Grandma’s house is illegal IF you compensate the old lady in cash or in kind)

Guest house private space.  Like the room for rent, but more private.  Owner still on site but the unit is separate with private kitchen/kitchenette.  Accommodations for 1-4 people is common.  

Whole Space (May be condo/townhouse or single-family home) May have a community pool with other shared amenities or may be all private amenities.  Most popular are homes with private pools and these are the hardest to find.  Units typically accommodate between 1-14+ persons (some up to 100) IF you’re looking to buy, this is the type of accommodation you will want.  Focus your time on WHOLE HOUSE options.

Management Options There are two types of management styles we will discuss here.  OPEN and CLOSED.  OPEN means that the home owner can choose who manages the unit (A management company of their choosing, themselves if they live in the county).  The selection of management companies may be limited to 3-4 different approved firms.  CLOSED means that the home owner is required to use a single designated property manager.  Other restrictions may apply.

Pricing | Setting rates for revenue

. . .What’s the best rate for . . .

Pricing is a never ending chore because there are just too many ‘what if’s’ and ‘what’s going on’s’ with a mix of ‘who’s’ just for good measure to keep on top of it! 

Price Guessing VS. Smart Pricing

I don’t pretend to know all things about AirBnb’s price tool.  I can only speak of it as to my own experiences.  What I found is the concept is great in  theory – but reality – it too is a hit-or-miss option.  IF you’re the first property to market, the tool sets your rate lower to attract travelers – some times too low.  As people book, available units nightly rates go up as inventory goes down.  So – how do you make it work?  Do you block major dates and open up later and hope you guess the timing just right to get the big dollar for a key weekend?  Do you force a rate and hope its not too high and your unit sits empty until demand picks up?  Do you drop the rate in hope to get occupancy but oops – you gave it away for a major holiday!  Sounds like a lot of work, guessing and time figuring it out to me.

Escape Properties deploys a technology that looks at current, future and historical trends and 28 total points of moving data in real time to set rates based on quality of your photos, sleep capacity, what INQUIRIES are doing vs. BOOKINGS and many other points to try to get “fair” market driven rates – good for both the traveler and the owner.

Focus on winning and not the one amazing booking!

Even if you’re not that in to sports, you will understand my point(s).  IF you’re a coach of a baseball team you will focus 75-80% of your efforts on single and double base plays, to load the bases, so when you get the one big home run you sore the most runs batted in (RBI’s).  If you’re a basket ball coach you drill your players to have a high percentage, like 90%, of shots taken within 8 feet of the basket (post position or lay ups) not all in trying to drain the 3-pointer from beyond the arc.


The same is true in Vacation Rental pricing.  You want to have ‘Fair’ pricing 90% of the time to get the most bookings (occupancy) and 10% of your bookings will be for ‘Top Dollar’ home runs.  If you’re always focused on the TOP DOLLAR rate, your occupancy rate will drop and your net revenues will tank.  Staying focused on occupancy will grow your revenue.  At the end of the year you’ll see a nice over-all balanced successful VR business.  This is a marathon, not a sprint.