All Forum Posts by: Chris Seidler

Putting at least five percent down will reduce the VA funding fee. Get a quote from a VA specialist like National Bank of Kansas City. That may shave some costs on the financing side.

Are your orders long enough that you would have sufficient equity to sell and break even on vcosing costs when you PCS?  If so then you have an exit option.  How much can the market dip and still be in thr black?

If you have to rent it, is it a part of the country you don't mind coming back to?  Because you will spend leave time to come back.  Is it easy to fly to?  Family nearby?

What's the local and state tax situation? How do your numbers look with those factored in?  Do you understand the preferential treatment military gets on capital gains if you just sell?

How landlord friendly is the jurisdiction?

If you have two properties in two different states and visit both of them for business purposes on thr same trip, how do you split the travel expenses?

Example with round numbers to KISS:

-Travel from residence to property A.  $300 mileage, two nights in a hotel ($300 total).

-Travel from A to B in the next state over.  $100 mileage, three nights with family so no lodging per diem.

-Travel from C back to residence.  $300 mileage.

in this example there is $1000 in deductible expenses.  Do we allocate based on days at each property (so 2/5 and 3/5)? Do we allocate each expense to a specific property, so all the hotel goes to A? Thanks!

Check your state laws.

Consider doing a non refundable holding fee that then converts to the first month's rent.

Then whatever security deposit you would normally charge.

Agreed -- I didn't mention this above....  We actually keep a pantry pretty well stocked with basics:  tea, coffee, cleaning supplies & laundry stuff, cup of noodles, ramen, soup, oatmeal packets, microwave popcorn, spices, bottled water, lemonade mix/crystal light, etc.  

There's bulk packs in our owner's closet that the cleaners can use to refresh supplies with or we just do a walmart.com order to resupply.

We have gotten a number of positive comments in reviews on the pantry staples.  Our mental model is to have enough that someone arriving late could put together a bare bones meal for dinner and have the essentials for breakfast before they head out to get actual groceries.  We've had guests do exactly that.

We do not advertise any of these supplies until our check-in instructions welcome them to use the pantry, and let this be a pleasant surprise to people when they arrive.

In theory a guest could clear us out but nobody ever has.  And its not like any of that stuff is super expensive if they did.

This property is in the mountains and has electric heat, so the main bill comes in the winter when the heat is running.  

We took the highest month of "normal" winter usage we had records on -- people in the house, heat running at a reasonable temperature, washer/dryer running, etc.  We then added about 50%, rounding up to a round number.  That's our cap.

The only time we have seen an electric bill higher is when contractors were in there working and using a ton of electricity for industrial heaters for a month.  I think you'd really have to work hard by mining bitcoin, leave the windows open in winter with heat on full blast, or something similarly unusual to exceed the cap.

Ours is in a rural area with strong seasonality and lots of regional vacation travellers going out for a weekend or maybe a week. We are within a few hours drive of several metros. We do a mix of STR & MTR. MTR brought in 75% of the gross and more of the net due to lower cleaning fees for turning over the STR.

For gross numbers we brought in about 1.2% of the ARV value in monthly rent this year which is decent based on the rules of thumb at least. On paper we were slightly in the red but much of that is due to one-year expenses/repairs & allowable transportation costs to get up to the property for work days ourselves. For CY25 I realistically think we'll be somewhat in the black with about ~3-6% ROI/COC now that much of the initial rehab is settling down and we have our systems in place.

We were very pessimistic (realistic?) with our estimates for both income & expenses on this property.  Sure enough the rehab ran over budget (we had a large contingency that was used up -- some due to contractor malfeasance, some due to pulling the trigger on big repairs like a new roof) and the revenues were right around expectations, maybe slightly below.  Because we were clear eyed going in it has worked out ok.  If we had gone with more optimistic assumptions then it would have been a very disappointing year financially at least.

Every market is unique.  But I'd be shocked if people are getting significantly better numbers in similar "regional destination" type areas.  I think if you're in it for the money, location in a decent sized metro with a lot of transient work force would be key.

We have two rental properties out of state.

Consider Transportation:  One of them is a few hours drive away.  The other is a full day drive, or a short/cheap direct airplane flight and we have family that lives nearby.  If your property is hard to get to then think again.  Things will happen and you will have to go there sometimes on short notice.  If you can hop on a $100 non-stop flight, nbd.  If its going to be a 2 day drive or a 7 hour/$1000 airplane adventure with a 3 hour layover in the middle, not so cool.

Both of the properties are also places we don't mind going so its not a huge hassle if we need to drop in.

Taxes:  The taxes get significantly more complicated with new state returns.  Plus your home state wants to know about all that income and while they probably shouldn't tax it, they'll let you know how much they think you might owe.  Finding a single tax professional who is smart on the varying rules in different states may not be feasible either so those costs go up too.

Legal:  Procedures vary in different states.  Lease provisions in one place that are common and acceptable may not be allowed elsewhere.

Overall its worked out for us but there's definitely some potential pitfalls.

Our market is relatively small and rural so I have a good idea of what is available based on looking at comps:  a few minutes on Zillow, Airbnb, Furnished Finder and Realtor.com tell you what the comps are.

In our area a comparable LTR is maybe ~$800/month.  We can charge about +50% in the off-season and +100%ish in the peak season.  Realistically around $1200/$1600 although.  Typical utility bills (which we include) are $100-300/month.  The place is furnished and with 7 year deprecation (hah!) that's worth one or two hundred bucks a month too.  So in reality our MTR rent -- especially in the off season -- pretty much covers the utilities, furnishings deprecation, and another hundred bucks or so, at least in the off-season.  In the peak season the math is better.

We started charging MTR a bit more for the four biggest holiday weekends of the year.  The tenants have paid and if someone is thinking about moving out then an extra surcharge that hits if they aren't out in time for us to turn the place for a lucrative AirBNB short term rental can help massage the move out timing.

That said with MTR we do not have the cleaning costs that eat up a lot of STR gross, and its lower hassle in some ways. And it gives us a lot more flexibility than a LTR which in our particular case is nice.

Our medium term lease covers utilities but includes a cap for electricity.  Its generous and I don't think anyone would go over it with normal usage.  If someone was over during a high consumption month I'd give then a notice/warning for the first month along with some energy consumption tips then tack it onto the rent.

Ours is in a rural area.  There is no high speed internet available yet and we haven't sprung for Starlink.  We absolutely have some "low tech" entertainmnet.

- Interior TV antenna mounted:  pulls in a bunch of channels as we're on a mountain.

- Board games:  We have a Kallax unit.  About two cubes are full of games.  Some "euro" games and some traditional ones.  We also have some RPG books (Basic Fantasy RPG is super cheap) and dice that have been used by guests.

- Books:  We have a mix of books including some local area/regional stuff, some fiction, and kids books.

- Kids Toys:  We advertise to families and have another 2xKallax cubes full of toys that won't break and are tolerant of missing pieces, but are easy enough to cleanup:  lincoln logs, blocks, hard animals, stuff like that.    Nothing tiny (no legos!).

- Art/Decor:  We have sourced local art from farmer's markets and the like.  Its tasteful but makes things a little cozier.

We are not a luxury property, and that's ok. We are literally next to a golf course and about 10 mins from a ski place and I don't think fancier amenities would generate a ton of ROI. Our guests are out golfing, hiking, skiing, etc and seem to want a conveniently located place with a full kitchen and bath when they get back -- and that's who we market to.