All Forum Posts by: Collin Hays

We spend substantially more than this, as we are believers in buying high end furnishings, appliances, and decor.  We spent $4000 for a handmade hickory dining table and chairs alone.  But our guests appreciate the quality and treat our things with great care most of the time.

So we got a worker's comp audit for our property management co. We employ 2.5 people. As most other STR owners and Property managers do, we contract out for housekeeping. It is almost always folks (primarily women) are work independently. We assign them a property (or two) to clean when we need it. Our audit is asking us to list all subcontractors, but there seems to be a distinction in TN between a subcontractor (who has to carry his/her own workers comp insurance) and an independent contractor, who works by themselves and does not have to carry workers comp.

Do any of you TN folks have a knowledge base on this from past experience?

I think it's even safer to find a community that embraces them.  Because a short term rental is technically allowed by ordinance doesn't translate into a happy life for you.  If you go into a primarily residential neighborhood and open up a hotel, you are going to be chased out by the "hounds of Baskerville", guaranteed.

You can get a zoning map for your entire city at your local city hall.  

I always go 30 yrs.  If I can borrow for under 6%, I’ll borrow as much as I can, for as long as I can. Your results may vary.

Remember that apartment you rented and they wouldn’t refund your deposit even though you left it spotless?  So does everyone else, which means it is false economy to charge damage deposits.  People are highly suspicious of damage deposits, as well they should be. You will lose far more in reservations dollars than any damage you might pay for with deposits.

VRBO and Airbnb have already figured out how to tack on big chunks of junk fees, so you don’t really have opportunity there, either.

Seems like a saw a commercial where a fellow fixed a leaking boat with some sort of goop.  Like while he was in the boat. Maybe it would work?

 All of mine are vacation rentals.  Selling them presents a whole host of problems.  Take property number 1:  I have $330K in it, it produces about $65K a year in rents, and I could probably sell it for $500K rather quickly.  But what then?  I have capital gains tax on probably a $250K gain after depreciation.  So after that I'm walking away with maybe $400K.  Where do I put $400K that produces $65K a year?   

I have been tempted to sell my properties for major profit.  But then put the money in what?  Even if the houses never go up another dime in value, the income is incredible.

Dave Ramsey seems to be a really great guy and all, and has some good advice for getting out of debt.

But he isn't going to be a proponent of using leverage when investing.  The problem is, leverage is what makes RE of any kind so attractive.  Take away leverage, and you might as well put your money in Fidelity Target 2030 fund or whatever.  

When it comes to investing and risk, I would be the polar opposite of Dave Ramsey. I don't invest in all of the things he tells you to - IRAs, 401Ks, etc. I don't have a single penny in an IRA. I don't like them, for a variety of reasons.

When I was in corporate America, I was pretty much forced to play the 401K game.  When I left my company back in 2013, I took the entire $400K in my 401K and cashed it in.  My accountant threatened to fire me.  After all of the taxes and penalties, I was left with $265K.  I used that money to buy around $1 million in vacation rentals, and those rentals are now worth probably twice that.  They are also throwing off about $175K a year in rents (not including taxes and housekeeping fees).  

Wealth is almost always obtained through risk and leverage.