Santa Barbara, CA · Member since 2017 · 25 posts · 5 votes
Hello all,
I inherited a house in Phoenix last October. It's worth about $350,000 and no liens.
I was thinking about making it a midterm rental or a short-term rental but it would require quite a bit of work and would require getting a home equity loan.
Also considering selling and buying a turnkey str.
I do plan on leaving the country and I'm not sure where I'll end up.
Would love to hear the pros and cons from all you professionals.
Realtor · Phoenix AZ, USA · Member since 2023 · 209 posts · 81 votes
1y
Hi Cyndi, I'm an investor and agent myself in Phoenix.
I think it really depends on where the home is at, the condition, etc that may help you make the right decision. I would be happy to get on a call and talk through the options that you have.
My business partner and I actually own a portfolio of STR's in the area, so if you wanted some insight on that business I'm happy to share as well!
Real Estate Agent · Lakeland, TN · Member since 2015 · 214 posts · 105 votes
1y
@Cyndi Lees the thing that catches my eye in your post is that it would require quite a bit of work to get it started as a rental. Do you have experience with other rentals? Is that something that you are interested in? If you are then this probably would not be too crazy to get it up and running with some work.
With that being said you do have lots of options. Did you inherit this home with a step up in tax basis or will you need to pay taxes on any gains if you sell? If that is the case it would require a 1031 which is just another layer to the process but ultimately not really that complicated.
Without knowing how much repair work would be needed it's difficult to give specific advice. If you are ultimately looking for a mostly hands off solution you have options there as well with single family turnkey. If you are looking for a more active solution you could buy a turnkey STR. What goals do you hope to achieve through this property? That may help you arrive at a solution.
Realtor · Phoenix AZ, USA · Member since 2023 · 209 posts · 81 votes
1y
Hi Cyndi, I'm an investor and agent myself in Phoenix.
I think it really depends on where the home is at, the condition, etc that may help you make the right decision. I would be happy to get on a call and talk through the options that you have.
My business partner and I actually own a portfolio of STR's in the area, so if you wanted some insight on that business I'm happy to share as well!
It sounds like you have a good problem with a number of choices. Your choices will depend on what you are looking to get from the property.
STR is becoming more difficult in many areas. You may need to look into this in the area where your property is now. Many areas are becoming saturated and the laws are changing. This would be a concern for the existing property and any other turn key you may find for STR.
Many of the investors that I work with prefer the LTR strategy. It may make less cash flow/ per month but in may cases in the long run after PM fees and Repair costs, many times it turns out similar. This may also be an easier option if you are planning on leaving the country. With a property that is paid off, the cash flow should be there.
If this property is not in a great area for that or if the the property is in need or repair/ update, then maybe the option of trading the property to a newer bigger Ltr is a good plan. With that kind of equity you would be to find a newer, nicely performing Quad in a market that is appreciating. This might be a better situation if you are leaving the country.
Santa Barbara, CA · Member since 2017 · 25 posts · 5 votes
1y
@Todd Anderson hey Todd, thanks for all of your advice, you've given me a lot to think about.
I've been going back and forth, I need to do some research and work out the numbers. It all seems a little overwhelming at this point but I know it's what I need to do.
Santa Barbara, CA · Member since 2017 · 25 posts · 5 votes
1y
@Jackson Harris would absolutely love to get in on a call I don't live in Phoenix at the time I'm in California but I'm going there in the near future.