All Forum Posts by: Collin Hays

It sounds like there isn't anything nefarious going on - I just need to be patient.

Hello everyone.  I am kind of stuck and need advice of what to do next.  I own a number of vacation rentals in eastern TN.  I decided to take advantage of the low interest rates and do a cash-out refinance loan on one of my rentals.

A local credit union here in Texas offered me a really good deal, so I proceeded in early October to complete all of the paperwork.  Everything went smooth, until in early December, the underwriter insisted that I have flood insurance on the property before they would approve underwriting.

Well, long story short, the house is not in flood plain, but rather than wrangle over the issue and miss out on the refinance and all of the work we had done to get it closed, I decided to get a flood policy.  That was two weeks ago.

Now, the credit union keeps saying "the underwriter hasn't yet cleared out the flood insurance...hopefully soon".  They've been saying that for 10 days now.  The credit union never calls me - I always have to call them to get an answer.  At this point, something doesn't feel right about this.  Should I continue to wait for the credit union, or is it time to go above my loan processor's head and find out what is going on?   

I don't want to make the loan processor mad and them then just ditch me, but at the same time, this is moving into a stage of weirdness.  Maybe I am off base.  

Thanks for any advice.

I like the sounds of the service.  However, what I have found with folks who buy STRs as investments are generally pretty active in their investments by nature.   So this personality type isn't necessarily going to be the hands-off type that you need to sell your service to.

What would be cool is to put together an investment buying group, whereby you pool dollars to buy various STRs, and your service to that company is the various things you outlined.  That has some attraction to passive investors, I would think.

A hot tub never really needs to be replaced, unless you just want to.   Occasionally a heater or pump will go out, or once in a great while a circuit board.  You just repair/replace and move on.  A tub is a tub.

We have had one at one of our vacation rentals for 16 years and it's going fine.  Although we have gone through a pump, a heater, and a circuit board.

When we take on a new client, we sometimes get asked "can I do without a hot tub"?  I say "Well of course!  Just knock 20 percent off of your annual rental income."  

I expect folks to keep taking vacations for a while yet, so I'm still bullish.

Hey Chris!  Awesome question!  I don’t know about loopholes, but you can deduct all of your expenses, plus interest if you have a mortgage, plus depreciation!

I googled your question and came up with a few million results, but that’s the gist of it.

Many claim to pay someone in Bangladesh to take care of your place for $4 per call.  

I would soak in your hot tub for an hour and meditate on it.

Aren't we all renting in the end anyway?  I haven't seen many vacation homes hitched to a hearse lately.

I don't see any problem with it whatsoever, provided that there is full disclosure to the landlord.  If the landlord is good with it and the subject property is in an area where short term renting is allowed, you have zero ethical or legal problems.  You only have those problems when you are breaking zoning laws and/or willfully misleading your landlord.

The idea that a short term rental is going to have more wear and tear than a long term rental is bunk:  My experience is that guests take exceedingly good care of my vacation homes.  They are often not even there - they are out looking at attractions, theme parks, etc.  Cooked meals are often fairly rare, so the kitchen isn't used that much. 

Most folks use vacation rentals to watch some TV and sleep.  Thus, they suffer a lot LESS wear than a live-in property.  

Finally, there are 365 days in a year.  Even the busiest short term rentals are only renting 80 percent of the time, so that means 20 percent of the time it is unused.

I say if you can find good opportunities for STRs and can negotiate a long term lease with the landlord and they allow you to rent it out nightly, go for it!   One more caveat, however:  Only do this in areas were STRs are prevalent and allowed by ordinance.  If you don't follow this rule, you are in for a nightmare.

I would ask your accountant.