Managing Your Property

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Kyle McCann
  • Lender
  • Collingswood, NJ
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36
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Short Term Rental Reserves

Kyle McCann
  • Lender
  • Collingswood, NJ
Posted Jan 20 2022, 09:06

Hello,

I'm in the process of completing renovation on 24 units that are being converted from multifamily to condos in a Jersey Shore community. The game plan is to AirBNB the condos seasonally. After refinancing, I'll have an annual PITI payment of roughly $490,000 across all of the units. AirDNA estimates my annual revenue at roughly $1,040,00. This leaves me with over $500k of unadjusted cash-flow. The cash-out refinance should leave me with about $900k in proceeds. $400k of that will go to pay off investors. My ask for advice is what to do with the remaining $500k in cash out. I typically like to keep at least 6 months PITI reserves for regular long term rentals. Should I be putting more away for STR since it is a more volatile seasonal rental? In theory, I will have enough cash to reserve a whole year. Is that necessary or can I afford to pay myself here?

Your input is appreciated.

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