All Forum Posts by: Alyson Gordon

• You're definitely on the right track. Here's my 2 cents from my experience but i'm not an attorney or CPA so it would be good to ask one :)
• 1. I'd buy a SFH or something with little/low land value would be best. You'll want to buy a property with a high enough value to really get the benefit of the cost seg. I'd estimate 12-15% of the sales price as you'll have to back out land value and then you'll get closer to 20% of actual home as a deduction (assuming 100% bonus depreciation which the jury is still out on that being extended.
• 2. I think yes to the LLC but you can do that after you purchase. it makes things unnecessarily complicated IMO for the purchase process. If you don't keep your money separate the LLC won't be protected anyway so be sure to set up your bank accounts properly before you operate the STR.
• 3. Yes, you need to self manage. I would get a PMS (Property Management System) or channel manager that allows you to list on all platforms but manage in an integrated way as if you have 1 platform. Something like Hospitable, Owner Rez or Guesty. 
• 4. I'm not familiar enough with the best markets in MD however I'd definitely try to stay in state if you can. If not, you'll have to file + pay taxes out of state and also if you're using a CPA they charge extra. As I read your question, your goal is to avoid taxes and keep your $ not spend it :)

• 5. I'm not sure about the audit but if you're doing things the right way you should be ok.
• 6. I'm not aware of any other real-estate related options, and outside of having a business of some sort to have write-offs, I only know of the traditional things like maxing out retirement contributions and such.  

hope that helps and good luck!

I would try Jackson Law based in Raleigh or try STR Law based in TX but they have assisted me with properties in NC and VA.

Good luck!

Quote from @Schaefer Marks:

Apple is building their East Coast headquarters between Raleigh and Durham. 5,000 jobs with median salary of $240k/year. Google has already build an office in Durham which houses their largest collection of engineers (around 400-500). The agent you spoke with in Raleigh is correct. These are not blue collar jobs. 

 Because of this and many other companies with HQs or a large presence here, the home prices are climbing and will continue to. Buying is still competitive as well. Its a great place to invest but you won't see much cash flow though you likely will see a lot of appreciation. It all depends on what your goals are but Raleigh-Durham isn't a place you buy a cute duplex and start printing money :)

Quote from @Owen Rosen:

Quote from @Pranav Parikh:

Hi everyone, I am closing on a property near the Asheville market that I intend to use for vacations but also STR via airbb/vrbo. I am looking for insurance to adequately cover my liability as a potential STR as this is not my primary property. I have a quote for statefarm as a "homeowner policy" with "home-sharing endorsement". My family will end up using it <14 days out of the year.

The statefarm agent I am working with is assuring me that it will be "written as a seasonal/secondary home for you with the endorsements to cover the air B&B"

Is this adequate or should I be looking for more commercial full rental policy?

I would love to see what most STR hosts purchase for insurance in comparison and what the expected premiums are. As a frame of reference, my property is 2300 sqft, mountain views, 2021 new construction, 4bed/4bath

 Since you're planning on using the property 95% as a short term rental I'd confirm there isn't a limit on how many days it can be rented versus used by your family when written that way.  Get it in writing.

Agree with this - I have a similar policy as what you're referring to and I can rent it out 26 weeks out of the year. I'm in a beach market so that isn't an issue for me since its so seasonal.

Proper is the gold standard for this type of insurance but you'll pay like its actually gold :)

Congrats on getting your first STR!

Before continuing with the previous management company, I would vet them same as you would any new vendor/partner. Just because they have been managing the property doesn't mean they've been doing it as well as it could be done. 

I'd start by assessing their performance - compare the actuals to the airdna / bnbcalc projections, assess the ratings and reviews on the listing. If you're not quite ready to self manage, I'd also meet with 1-2 other property managers just so you feel confident about whatever decision you make. Most companies will want you to sign a 1 year contract. 

If you don't feel ready to self-manage I also wouldn't jump in during busy season, but take the time to listen to podcasts and read books, etc in the mean time. 

Good luck! :)

As a real estate broker and STR manager / cohost, here are my 2 cents!

You should get E&O insurance for yourself. If you're referring to Airbnb/VRBO insurance for damages then I would say the clear answer is "no" but you can purchase a variety of products to lower your risk.

For bookkeeping, doing it yourself or hiring a bookkeeper would both make sense.

STRs will have all of the expenses that an LTR would have plus a bunch more like toiletries for example. 

I think that Hospitable or something similar would make your life a lot easier, in addition to pricelabs for dynamic pricing software. You're also going to want to get external cameras and a wifi lock for access to the property.  

There's a lot to learn but its definitely doable :) I agree with the comments about Avery Carl's book as a starting place and would also listen to at least 50 hours of youtube and podcast content on the topic.

Good luck! :)

Looking forward to it!

I do think that $3700/mo is reasonable for MTR with a 3/2 home. I agree with trying Zillow and also add your property on ALE Solutions' website. Its good to explore all options so looking at what selling would do as well as LTR could make sense as well. 

In this market, I'd target 20% COC for STR vs the 30%+ we were seeing a few years ago. For all of the additional work involved, I'd be hesitant to do a STR deal at 10-15% but of course it depends on what your goals are for the property and for your finances.

I only use rabbu as the 3rd data source to validate my analysis, I find that it runs really high but its helpful and also easy to see what your competitors might be doing. I start with the paid version of AirDNA but also use the enemy method and you can check out bnbcalc as well.

Hi Greg! I have the same set up as you.

I think you said you're are not seeing the issue with hospitable...and if you're not seeing the issue with pricelabs, I would make sure all of the settings are accurate on each system, then disconnect your hospitable from airbnb then reconnect it. I'm guessing this is related to your integration somehow, I've had a couple of random issues. If airbnb knows you have a PMS and you reach out for help they likely will blame it on hospitable any way :) but try that and see if it works! if the custom length keeps coming back it could be something with your api feed.