My wife and I are looking to capitalize on the equity on our home and start getting into the STR world. We have recently gotten a HELOC and are looking to start making the steps to buy a rental property. Being completely honest we are new to this. We have been reading a lot of books and information on this and want to start out in the right foot. How would you all recommend finding the right resources to help set us out right? I.e. tax advisors, maybe lawyers, business consultants, etc? All the books say to find good people but don't give great suggestions to make sure we get someone who knows what they are doing and are right for the world we are trying to get into. I appreciate any help you can give. Thank you for your time.
You do not need tax advisors, lawyers, or business consultants to start investing. You need a property. Just learn how to evaluate a deal (there are literally hundreds of thread on the forum about this) and go buy something! You'll learn so much more by doing than by studying theory.
Hey @Matthew McKee, thank you for the reply. I would be more than willing to set up a conversation. I am not in the boise area so if there is a way to do a zoom type call I would be on board for that. I am trying to learn now and build the right team to move forward with this. I don’t know how your process works but I am willing to have a call and discuss. Thank you for your help
@Cody Wageman- thanks - best first step will be to get formally pre approved with a lender for whatever hypothetical scenario for the rental purchase you want to work with ...this will insure you are able to get financing for the property plus it will educate yourselves with the process and the present numbers ( payment / rate / cash needed for closing etc ...)
The main rule of thumb is make sure the property is profitable if you were to put a regular tenant and DO NOT rely on STR as your income when you're running the numbers for the property. I have had dozens of properties in FL and all short term, and it was basically a 10 year nightmare. Me personally I would never, ever do it again but I understand some people like that type of work/customer service. Get a good lawyer, appropriate structure to buy the property (LLC) and so forth. And just don't take anything personal, like those calls at 2am telling you there's a mosquito in the living room... Good luck!
So I will disagree with @Fernando Figueroa on some points. You don't need an LLC with a single property starting out. All that does is force you to use a commercial loan with higher interest, higher down and more points. I think a good CPA is a must. A lawyer is nice to have in your pocket but not necessary.
I also don't think they have dried up. It will all depend on your area, what you offer and how you manage. Our lake house is doing just fine for 2023 and booking some stays for 2024.
Not everyone is cut out for the customer service a vacation rental requires. I haven't received any 2am calls from any of our guests in the 5 years we have been running ours. Having the place setup well and doing all the maintenance 2x a year on all systems will keep things running smoothly.
@Michael Baum thank you for all of the input and suggestions you have provided. I agree with everything you have said. I have worked 10 years in the Tetons in the hospitality industry so I understand what’s it takes and a lot about the people who visit these areas and what they expect. I’m not overly worried about the unhappy customers, I believe we have the right knowledge and ability to set ours up to avoid that (mostly, I’m also not completely naive and realize there will always be people who are unhappy or complain no matter how well you do). I am actually currently working on getting a CPA. That is actually really high on my list mainly because I recognize I don’t understand that world and there is a lot of potential tax benefits to having someone who does have that knowledge. Do you have a tax person you work with that has been good for this type id industry? You can direct message me with that sort of information if you do or whatever works. Thanks for the guidance
@Cody Wageman I am in Idaho Falls. My wife is a Realtor here and services the entire Eastern Idaho region. She has helped many out of state investors find and purchase property here, both for LTR and STR. I can offer property management services as well for LTR within my immediate area, but not for STR. They require more time than I have available at the moment at least until I find the right people to make that happen. But I can put you in contact with others who are successful with STR in the area to find out who they are using. If interested in buying something here, anywhere from Island Park, Driggs, Idaho Falls, Pocatello, we can help!
That's so exciting! That is how I started my real estate investing journey. I used a HELOC on my primary house to purchase my first Oceanfront STR condo. I'm happy to chat with you about the journey. Shoot me a message!