All Forum Posts by: Caroline C.

@Constance Kawa-Small It is entirely possible that you can find a good deal in either market, or even Tampa, if you have the right local contacts to work with. I would suggest working in the market where you can find people on the ground that you can trust. You already have inroads in Tampa, so if you work that, maybe you can find a good deal. Best way to get recommendations is through your professional or family network. That's how we've gotten our best referrals, and those recommendations can come from places you least expect it. Our key partners in our latest market came from a recommendation from the person who ran a fitness blog website I was following - she lived in that market. In another market it was a former co-worker of a distant cousin, and in another market it was the spouse of a casual friend. We are looking at a new market now, and the realtor helping us is the daughter of a professional acquaintance not related to real estate - that was unexpected for us, but it is amazing we have an on-the-ground realtor we can trust. You might have similar connections in your life. Put it out to your network and you might get something good back.

Also, since your cash-on-cash return is greatly influenced by having a tenant that pays on time and doesn't move out and doesn't need an eviction (tenant turnover equals no income 1 or 2 months, high pm fees, and repair/turn costs), your PM is the MOST IMPORTANT factor in cash-on-cash return - since they place the tenants and work to collect rent if tenant falls behind. You can be in the best market but have a terrible tenant, and your return will be negative, especially if coupled with a PM that isn't great. Also, the challenge is that you won't know your PM isn't great until you have a situation where they under-perform. All PM's are great when tenant is good and pays their rent on time.

@Michelle McGinty we are prepared to withdraw from our retirement accounts if needed, but ideally our real estate passive income and other streams of non W2 income we are working to build will be enough to bridge us to the age where we can withdraw from retirement without penalty. While it would be better if some of our early savings were not in our retirement accounts so we'd have more flexibility in getting access to it, we have been able to do real estate investments in a Solo 401(k), so at least we've been able to diversify the investment of our retirement funds.

@Greg Hansen I agree - if there is something in the contract that says units will be vacant, I would delay the closing and let the seller deal with it. Was there an original lease at least? If so, then it probably renewed month-to-month at the end of the term, so you can provide 30 days notice and then if eviction is necessary it should be more straighforward. Hope it gets resolved easily...

@Kim Durst how long have you owned it, in the sense of do you understand how much capex is really needed each year to keep it in tip-top shape? Might be even more than the $29k. When you are renting a place for $300+ per night, you need to keep it in 'high end' condition, and a nicer condition than it would be if you were just using it on your own. It is off-season now for our places, and one of them sleeps 10 and gets $350+ per night in high season as well, and just to replace all the towels we are talking upwards of $1000!  Beach towels, bath towels, extras, spares for when there are quick turnovers, etc. Let alone making sure all the furniture looks great and small issues are dealt with. It has a pool and this year we need to replace the pool chairs, which is also not cheap. We are finding our high-end place has a lot more expense than we would have expected. Income is great, but keeping expense down is challenging. It is definitely possible that profit might be better from 2 smaller places that require less upkeep and maintenance.

@Amie Gray Congrats! Having a pool of properties is great so that you have a few others to back you up when a big repair is needed or you have a costly turnover. 

You said you were happy with your property management, but keep a close eye on that and how they respond when there are issues, because poor property management is what can kill you in the end with poor tenant placement, poor communication when tenant falls behind on rent, or passing on costly repair costs. Don't hesitate to change pm if you find issues with current PM. I'd recommend researching backup pm's, so you are ready to make a move if it ever becomes necessary. And don't sign a contract with a PM that doesn't allow cancellation with 30 days notice.

@Kumar Gaurav Zestimate is only as good as the homes in the neighborhood that Zillow arbitrarily picked to include in it's calculation. I own one home that shows Zestimate as under $30k when it really is more like $70k and I own another where the Zestimate shows as over $350k when it really is more like $250k. In both cases it picked poor nearby homes as comps.

The best thing to do is look at the map at the home of interest and choose to look only at 'sold' homes - select sold and deselct for sale, potential listings and for rent. Then you can pick a few recent solds in the same area with similar size and bedrooms, look at the photos to judge condition of home, and do your own comps analysis. Or work with a realtor who can run actual comps.

@Jamie Jenkins Hi Jamie - we are using PriceLabs as well. It is a little complicated to make the most of all the features, but to just get it started is pretty easy. Once you set your base pricing, it will automatically adjust the price up or down based on the demand in your area. The cost to you is monthly per property, but it is reasonable, and as soon as you get a booking that is higher than what you would have done on your own, it pays for itself. Same if it lowers the price automatically in a low demand time and you book a night you would not have otherwise gotten booked with a higher price. I believe they have a free trial for one month.

We have three vacation rentals in Costa Rica in Tamarindo and Langosta. We also looked in the Southern Zone but opted for the more developed Gold Coast area. Since there is no MLS, you really need to pick your neighborhood, network, and look at listings over a long period of time to get a sense for prices. Good luck!

Any recommendations for mold remediation services in Indy? We got 2 bids -- 30% apart, close to $5000 and $3,500. Mold is in basement and laundry room. Quotes are for remediation but not restoration.

@Kenneth Hartog Assuming that house already isn't a short term rental, then it is very very tough to estimate. It depends on how it looks, how you price it, what kind of reviews you get, and your ongoing expenses. Startup and ongoing expenses can both be higher than you anticipate. Best thing to do is go into short term rental sites, look at other places in the same area, their nightly rate and look at their bookings to estimate how much you can charge and the possible overall occupancy. AirDNA can help somewhat but looking at entire markets or areas of a market in aggregate won't apply to your specific situation. Also, you may not realize full potential until year 2, since it takes time to get some reviews and get solid bookings, depending on how saturated the market is.