All Forum Posts by: Account Closed

Travis, I think a lot of people, especially on the STR forums, would argue that short term rentals are worth the extra work. I think the main benefit discussed would be the additional cashflow that a well run short term rental can generate. Besides that, one additional benefit might include owning a property you could use. Depending on the area of the STR, another possible upside would be owning in an area that has different market fundamentals and may still perform even in contraction stages of the RE cycle.

Having said the above, there is a learning curve to running a short term rental, and my experience has been, that there is also a period of getting the property running smoothly and getting reviews before it is running at its peak. Although STR investors recognize the increased work, I also think there is still a tendency to continue creating and refining systems so that even short term rentals can be run with minimal effort.

@Lorenzo Prieto, I have read (actually audiobook) Cal Newport's work and do think he has a very valid point about developing a skill you can leverage to be marketable. Having said that, I'm not sure there is a "best option" when it comes to STR vs LTR. There are tons of people finding success and honing their skills in both of those arenas. I'm pretty new as an investor and happen to own both which I suspect is true of many investors who do venture into STR.

If you were looking to really focus on one of those two options, you might consider the pros & cons of either, as well as some markets, and your personal goals for REI and see which is a better fit. For example, STRs may provide more cash flow (once established & if self-managing), but the tradeoff is more involvement (less passive) on your part, and you'll likely need a year of rental history before using STR income to help qualify for any future loans.

@William Crutcher, I do not personally own in SLC, but wanted to see what sort of input you may get on this post. When I was just trying to get started in REI, I did look seriously at Salt Lake. Since then, I have been able to get into the STR space and co-own two cabins in North Carolina. My wife and I have stayed in STRs in SLC on multiple occasions, and I continue to be interested in eventually owning there. Some of the things that have made me reluctant to look more seriously have been the high entry prices relative to projected rents as well as not having a good sense if the city or different municipalities could eventually limit STRs, putting someone in a difficult position if converting to a LTR wouldn't cover the mortgage.

Thanks @Todd Rasmussen. I appreciate you sharing your experiences. Good input on considering the tax implications also. 

Thanks @Todd Rasmussen. When you say "this actually happening", you're referring to the lender calling the mortgage due, right? It sounds like you've done this several times. Have you put the title in the name of an LLC before specifically?

Not sure if this is possible: I am looking for ideas on how to legally add someone (or an LLC) to the title of a property without necessarily having to obtain a new loan.

The background: My partner currently owns a property in his name and is the sole person on title. Going forward, we have arrangements to run the property as a 50/50 partnership. We would most likely hold title in an LLC which we are 50/50 owners of.

Since the terms of the loan my partner already has are good, we are investigating if there is a way to add me to the title (or put the property under the LLC) without obtaining a new loan.

From my limited knowledge and initial reading, it seems like adding a non-family member to title can initiate the acceleration clause where the loan would be due.

Any input is appreciated.

Not sure if this is possible: I am looking for ideas on how to legally add someone (or an LLC) to the title of a property without necessarily having to obtain a new loan.

The background: My partner currently owns a property in his name and is the sole person on title. Going forward, we have arrangements to run the property as a 50/50 partnership. We would most likely hold title in an LLC which we are 50/50 owners of.

Since the terms of the loan my partner already has are good, we are investigating if there is a way to add me to the title (or put the property under the LLC) without obtaining a new loan.

From my limited knowledge and initial reading, it seems like adding a non-family member to title can initiate the acceleration clause where the loan would be due.

Any input is appreciated.

John, first off, congrats on the purchase. Have you considered self-managing the property? I know that not everyone wants to self-manage or may not have the time/capacity to devote; however, I think you'll find that many people on the STR forums will share that self managing is where you typically see the additional cashflow you are targeting from STRs.

I am pretty new to the STR space, but own 2 properties out of state with a partner which we currently self-manage.

Jeffrey, my first investment purchase was an OOS duplex which I got off the MLS using a realtor. We used an escalation clause. I do not have strong feelings about whether I love or hate them. I don't believe they are used in all states. In my case, it felt like it worked well: I was ready to buy the property up to a certain price (in hindsight it still would have been a good deal at even higher prices). I ended up getting it at my upper price limit (the escalated price). Cynically, I could think that having to pay my upper limit was fishy, but this was in a hot market on a multifamily. Units like the one I bought regularly go under contract the same day, so I have little doubt that the whole transaction unfolded fairly and above board. Really, I am just glad I didn't lose out over $1000.

Thinking about your concerns: I think a lot of that could be alleviated by working with a realtor you trust and have a good rapport with. They'll have a good pulse on the market and advise when an escalation clause makes sense. I tend to think that most realtors wouldn't risk their license and reputation over trying to nudge the price up by the amounts involved in escalation.  In my case, I think the asking price was 180k, and I got it for 188k, so it would seem risky to have a side deal to try to squeeze 3% of 8k ($240).

Wes, I am newer to the STR space so take my input with a grain of salt: Your approach may vary a bit based on your market and where you are at with your rental. If you look and comparable rentals have their listings open for the summer already, that may influence your decision. Also, if you've already racked up 100 five-star reviews, your approach may be different than if you're just starting out where you may be prioritizing quantity of bookings over getting the highest rates (at least until you get more reviews).

I've been experimenting with opening 2-4 months out. I use a 2-night minimum. I figure that 1-night rentals are not ideal for the calendar or the guest experience (once fees are factored in), but my thought was that many people are just getting away for a weekend or short trip, so 3 nights seemed limiting. In the market I'm in, so far, it seems like most bookings happen pretty close to the dates of travel, so I might not need to have dates open 4 months out. For months in the future, I was planning to try to get 1-2 bookings on the calendar and then raise rates.