All Forum Posts by: Avery Carl

The way that we get around this in my market is this: we have a separate bill of sale for the furniture for the cost of $1. So that way we don’t run into the issue of the appraiser asking how much of the purchase price is real estate and how much is personal property. Obviously, Fannie and Freddie lenders can only lend on real estate, and not furniture/personal property, so having the separate bill of sale stating the exact cost of the furniture eliminates that confusion. 

STR's don't really fit into many of the boxes and calculations that traditional long term rentals do. There are many moving parts and there are no real rules of thumb that work for every property or market. I agree with @John Underwood, you have to get as much information as you can on the expenses, do as much research as you can on similar properties in the market's performance (on any and all rental platforms), and then run your numbers. You can also use the major STR income data sites like Airdna and Mashvisor as a loose guideline. Although their data isn't perfect, it's pretty good and it can definitely help you figure out the income range that you should be able to attain (it's actually a little on the low side compared to what my STR's do).

It's important to take any rental history with a grain of salt. Two owners with identical properties can have wildly different returns that have everything to do with their own management skills/style, and nothing to do with the property itself. You can usually find the differences in their listings that make one more successful than the other.

In my markets, most of the sellers are not investors, they are true "vacation home" owners who just threw the property on with a local property manager so that it can "pay for itself." In addition, most of the local management companies' properties underperform compared to self-managers and some of the more cutting-edge national managers, so it can be difficult to get accurate/investor-centric data from them.

Bottom line, nothing is going to be handed to you in a nice neat spreadsheet in most cases, but if you are willing to do a little research, you can come up with a pretty accurate basis for what sort of return you can get if you maximize a property's potential. Unfortunately there's just not a rule of thumb or calculator that can do this for you. But if you do your research, and you find that the return is high enough for it to make sense for you, then go for it!

Some lenders can do an investment property for 15% down, although it’s not the norm. @Parker Borofsky can.

The Takl app can be a really great tool for odd jobs.

@Jason Taliaferro to underline what @Austin Hair said, all you need to self-manage an STR remotely from anywhere in the country is a cleaner, a handy-person, and a smart phone. Managing STR's, while it does require a little work, is literally the equivalent of answering text messages a few times a day. Maybe throw a phone call in there every now and then.

@Jason Taliaferro I roll it into single and small multi family LTR’s.

1/3 of my portfolio consists of vacation rentals. Mine are in the Gatlinburg/Smoky Mountain area of Tennessee. I will only consider true vacation rental markets such as Gatlinburg (although there are various others that produce great cash flow as well) for STR's/Airbnb property because the economies of those markets have been dependent on tourism and short term rentals since well before I was born. In other words, those markets are far less likely to impose unfavorable regulations on short term rentals, as they figured out how to capitalize on them decades ago.

My goal isn't to build an entire portfolio of STR's. I use the heavy cash flow from my STR's to roll into other types of investments. It's been a really great strategy so far.

@Paul Sandhu your responses never get old.

The first thing I would do is look at the regulations in all 3 areas. Vegas is getting stricter as is Kissimmee. @Mike V. can speak to the Hawaii market. 

The best markets with the highest returns vs. purchase price are The Smokies (I own 5 there), Panama City Beach, Big Bear, and a few others. The Palm Springs are also yields huge returns, but I believe their regulations allow 1 property per person and has minimum stay requirements. Hope that helps narrow it down some!

@Paul Sandhu the jury is still out on that particular decision, haha.