All Forum Posts by: Alan Ford

@Collin H. I include mortgage for sure. That doesn’t It’s the biggest component of my expenses.

@Gerald Pitts which is totally valid but just proves the point. Not everyone is speaking the same language. I tent to like the profit approach. How much hard cash do I get to spend re-invest etc. after paying for literally every expense in a year on average for a given property.

So on my 4 bedroom property - I put 10% down, purchase price of $395k = 39,500. Pure profit for 2019 after all (literally all) expenses was $14,365 (doesn't include equity gain) - works out to a 36% or so ROI (for my initial down payment). This was a better than normal year because I didn't have any major repairs to deal with or appliances to replace etc. Last year it was $12,567 profit - had to replace some decking and a dishwasher. This year I have it earmarked for new staining - so I expect to finish the year around $11,000 in profit or so. Although - on a four bedroom - one random *** weeklong vacation in an off season month can really bring it back up. My PM just put someone in my cabin for two weeks starting Valentine's Day. Was a nice reservation during the traditionally worst month.

@Malgrum Holley totally agree on the gross rents comment. Most people here seem to include the money collected for cleaning fee for example

Which makes sense when self managing.

When I say gross rents of $73k for my 4/4 - it does not include cleaning fees because that goes straight to the cleaner. My PM nor I make profit on it.

@Julie McCoy I just was commenting on your post that said “self managing is mandatory to make money” that is false and too much of an absolute.

@Todd Goedeke I have no idea what his marketing budget is. A lot I think .

But yes - those numbers I mentioned are absolute profit numbers after factoring in all expenses.

@Michael Baum One in Pigeon Forge and one in Gatlingburg. Actually, I pay for “repairs” and the cleaning fee is paid as an addition to the room rate. The PM nor I make any profit on the cleaning fee. There is no question that I might be able to squeeze out a few thousand dollars more a year on each property - but as someone else mentioned.... is it worth the hassle and effort? To me, at this time, it’s not. That could change at any moment- pretty much as soon as my PM stops making money for me haha.

I totally agree that PM isn’t for everyone and that not all are equal.

But PM’s have been making people a lot of money in this area for many many years. Long before AIRBNB and VRBO came along. The dynamic is shifting and fully agree with the Carl’s that someday in the near future the AirBNB crowd will take over. Just think it’s a little too cut and dry to say it’s not possible to make money with a PM. There are a lot of them and they have been around a long time. Not all of their customers are “suckers” I mean they were smart enough to be real estate investors in East TN right?

My only regret is not buying into the market a decade ago lol.

@Julie McCoy - per @Lucas Carl after my consult with him - my property manager (or my actual properties) may be an exception but I don’t think it’s right to put out a blanket statement that you can only make money through self managing. My properties both are beating the high end of the numbers you mentioned above and that is before any cleaning fees etc. $73k for my 4bd (before cleaning fees) and $38k for my 2bd (but I got it in May).

After every single expense, utilities, mortgage, taxes, Maintenence, and 30% cut to the property manager- each of my properties are making pure cash profit (not including equity) of over $1,150 per month. Roughly a 26% ROI on my down payment.

I am fully willing to admit my results may not be common, but while I know this forum is vastly leaning towards self management- it isn’t accurate to say it isn’t possible to make good money with a PM. This forum is a wealth of valuable knowledge, and has helped many many people. Lets just be careful with absolutes in my opinion.

Doubly odd when you factor in that my PM does zero AIRBNB or VRBO etc. business.

And - to be honest - something to be said with literally doing nothing and making money. Never having to take one phone call when something goes wrong (and it will) is a nice feeling.

@Gary Dawson it’s all over the place. I think it’s fine to take a $10k deductible personally. Shop around is my only advice and be careful on what’s covered or not covered.

So in my STR area is Eastern TN, the name of a cabin believe it or not can dramatically increase rentals. I've seen it first hand. For example, two identical cabins in almost the same resort - same property manager... one is called Log Wild and the other is called Mountain Escape. The Log Wild one generally does 10k-15k more a year gross.

Has anyone else experienced this? Post some of the best selling cabin names you have seen or heard of?

My two cabins do ok... I inherited one (Family Traditions) and the other I renamed to Sweet Serenity.

I use Foremost - they wont cover my pool cabin.