I'm an investor/developer in Colorado Springs and I've been in the Short-Term Rental Game since 2017. I've got my own Real Estate portfolio of Short Term Rentals that make $2,000+/mo each in cash flow. I've noticed a lot of interest in Short-Term Rentals so I figured I'd start a Forum to see what questions are out there and how I can help!
Investor · Sacramento, CA · Member since 2019 · 44 posts · 38 votes
4y
I live in California. In my area, due to housing shortage, you are allowed to use only your primary residence as STR and for only 90 or 180 days per calendar year, depending on the county. It's illegal to use ADU as STR as well. I've been interested in STRs for a while, but I don't know how to make it work full time. I would be curious to hear how others succeed in such circumstances as I know there are plenty of STRs around.
Just 3 knucklehead landlords. One of which is not funny but I’ll never stop trying.
You look like Kevin Kronin. My post about asking about what to do with a dead body in an STR got deleted by a moderator. I guess the moderators have no idea what goes on with STRs. I've had 2 dead bodies, 1 one which nobody would claim the body. I don't make up stories. I just tell what happens. If moderaters think the truth is too much, they are doing a disservice to the people that read this foru.
I think Airdna is pretty accurate. We actually use them a lot to determine comps and then to see what the rest of the market is doing. Pricelabs isn't so much a market analysis tool as much as it is a pricing tool. We've gone through a few pricing software systems and currently really like Beyond Pricing.
I came across this platform called Turnoverbnb and that connected me with a few cleaners who I then contracted off of the site to work for me personally. Might be a good place to start.
So the minimum stay thing is an interesting topic. I personally like having one night minimums where you can afford it. You make a large portion of your revenue off the cleaning fee, and you get more of those the more often there are checkouts. Now with that being said, we have run into a lot of parties in certain parts of cities with colleges or younger populations. What our current SOP is, is that when we have an issue like that come up, we switch to a 2-night minimum for that listing. Otherwise we try to maximize revenue by maintaining the one-nights.
So one creative solution that we've come up with is that we only open up our calendars 90 days forward. This kinda achieves a few things:
1. We maintain really tight prices and we avoid people booking a year in advance to get a discount.
2. We allow our owners enough time to be able to book their own home if they ever want to stay in it
3. We inadvertently can prove that our listing isn't being "used" for more than 90 days. We have a close relationship to most of our zoning enforcement people and one thing we were told is that they have no way to prove that we're using it for more than that unless we have the calendar open with reservations booked.
Hopefully this is a creative solution to the issue. Some people worry that they wont book up, but trust me, we've never had an issue hitting our target occupancy regardless of the market regardless if we were opened up 90 days or 360.
Investor · Sacramento, CA · Member since 2019 · 44 posts · 38 votes
4y
@Joshua Kolnitys But my understanding is Airbnb has all of your booking information stored and would provide it to authorities upon request. Also, we are legally required to store all information pertaining to visitors up to a year, which would also show that place is being booked for more than allowed. And even if you do book it for more than 183 days per year, it is no longer considered your primary residence... I know that a lot of owners operate Airbnb illegally in our area (number or registered STRs is lower than actual available STRs), but I’m not looking to go that route and that’s why I’m wondering what other strategies may be used. I was considering running it short term for 90 days and then use it for traveling nurses for the rest of the year, which still doesn’t solve the primary residence problem legally.
Investor · Rockledge, FL. · Member since 2017 · 62 posts · 21 votes
4y
Hello Joshua,
Thanks for starting the conversation. I want to know how to scale my business. I have been flipping for a couple of years. I have saved my cash and ready to transition into STR. My investment partners want to get involved also.
So looking for destressed homes can work and help scale with BRRRR tactics. How would you scale otherwise? I want to have 5 or 6 homes a year.
I am considering an STR in a mobile home park. The lot will be rented. The listing states that lot rent pays property taxes, does that mean that I cannot write off the property taxes since they are covered by lot rent?
@Mike Malyy So that really gets into some grey space. For example, you can go on Airbnb and set a minimum reservation of lets just say 30 days. This means that nobody can book anything less than 30 days at a time. So now, technically you're not "Short-Term Renting" your house, you're just "long-term renting" it. So do those reservations count towards your 180 days? The reservation is from Airbnb, but it's not less than the 30-days that defines a "Short-Term Rental". If you post on one of the Traveling Nurse sites, why are those categorized differently than Airbnb? In reality they're not, it's just how we associate them.
Not really saying one is more right than the other, but just some things to think on.
So we send all of our clients an "Inventory Requirement Checklist" when they first reach out to us. It's basically a list of all of the items that we require them to have before we'll take them on for management. We have item descriptions, the quantity, and the link to buy it.
We do charge an extra guest fee. That's usually at guest 5 or 6. We do that as a "Utility Offset" in order to protect our owners from extremely high utility bills when there are more than the normal guest count.
Hot tubs can be incredibly valuable! We have noticed that our hot tub listings make on average $80-$100/night more than those without, especially those in the mountain cities like Colorado Springs and Park City. Remember, with STRs it's all about the experience.
Investor · Sacramento, CA · Member since 2019 · 44 posts · 38 votes
4y
@Joshua Kolnitys thanks for your response. I’ve got a few ideas of my own too as I believe there are loopholes in the law. Going to read the code a bit more thorough to see if I can make it work legally.
So what I've done to "Scale" in the STR space is create a management company. I essentially started with a little crew for just one of my own homes, and then I started hiring them out to other people who became my clients. Then that slowly grew into me managing other people's properties and ultimately taking a portion of other people's profits.
I also continue to buy my own properties which expands my own portfolio. To scale that, i've got a whole other thread we could do on creative financing possibilities for you to find ways to keep buying real estate constantly.
@Joshua Kolnitys But my understanding is Airbnb has all of your booking information stored and would provide it to authorities upon request. Also, we are legally required to store all information pertaining to visitors up to a year, which would also show that place is being booked for more than allowed. And even if you do book it for more than 183 days per year, it is no longer considered your primary residence... I know that a lot of owners operate Airbnb illegally in our area (number or registered STRs is lower than actual available STRs), but I’m not looking to go that route and that’s why I’m wondering what other strategies may be used. I was considering running it short term for 90 days and then use it for traveling nurses for the rest of the year, which still doesn’t solve the primary residence problem legally.
AirBNB pays local taxes in most cities, so the city is well aware when you are renting more than the allowed number of days. There are plenty of people doing illegal things, who have not outsmarted the system, they just haven't gotten caught yet. Enforcement often comes in waves and with COVID many things have been a low priority. Often when people say "loophole" or "creative" what they really mean is ways to avoid getting caught. You have to decide how you want to run your business. I believe following the law, zoning and ordinances is the best way to run a successful business.
Investor · Sacramento, CA · Member since 2019 · 44 posts · 38 votes
4y
@Joe Splitrock Thanks Joe. Just to be clear, I don't intend to do anything illegal. Not worth risking my family welfare for this, but, there's wording in the code that if I put a tenant in there on a long term lease (6 months min), I'm allowed to use part of the property as STR, not ADU though. So I'm thinking of either separating a master suite, putting a long term tenant into the "majority" of the house and renting master suite as STR, or, putting long term tenant into ADU, and renting out primary property as STR. Still have to consult city planning on this. That also eliminates any day count limitations as this does not reduce the number of available long term housing.
Real Estate Agent · Hillsdale, NJ · Member since 2020 · 87 posts · 39 votes
4y
@John Majoris I see your in NJ. Where are you thinking to get started work STR? AirDNA is a good place to start while not 100% accurate, or will give you a goo idea as to potential revenue / profitability.
Where would this "other thread" be located at. I dont live where I plan to invest and work full time so running a management company wont work for me. Thanks!
I'm an aspiring Airbnb host! Currently, I'm not in the position to own my own property yet. I can't wait to be able to create unforgettable experiences for guests, so, in the meantime, I would love to co-host for an owner. However, It's been difficult trying to find someone who needs assistance with their property locally or even remotely. I've read books and done my research, so I'm extremely eager to get started!
I have three questions:
1. How might I find owners who want their properties managed? I know this is an area of business where you need experience to get experience, but I'm willing to work for free to learn how to be a great host. I'm still not sure how or where to make this offer to current hosts/owners.
2. If I promote this offer online, it's likely that the property would be located further away. I've learned about hosting remotely from books and research. I wonder, though, would you recommend starting a PM business remotely?
3. Do you have any other suggestions for getting started when I can't own or "arbitrage" my own property?