All Forum Posts by: Craig Jones

This is maybe not the kind of arbitrage you were thinking of. But depending on when you bought your house and your mortgage rate, it might be possible to convert it into an STR with enough cash flow to more than cover the cost of renting another dwelling as your new primary residence. Especially if you're open to something a little smaller in an area that's a little less desirable. I know that might sound ludicrous, but the rapid appreciation in housing prices and interest rates has created some very interesting rent vs. own dynamics, especially in the Bay Area. You'd have to do some analysis to see if this pencils out for your house.

Theoretically San Jose limits STRs to 180 owner-not-present days / year. But with zero enforcement since they don't issue or require STR permits.

I built my own website in Wordpress using a vacation rental template that I bought for about $20.  I use OwnerRez as my PMS and their Wordpress plugin provides the booking functionality on my website.  They also do hosted websites for a little bit more money if you don't want to muck around with Wordpress.

OwnerRez also syncs calendars across all channels.  In my case, that's AirBnB, VRBO, Google Vacation Rentals and my own website, but it also supports many others.  And it syncs the dynamic pricing data from PriceLabs to all those channels as well (or Wheelhouse, Beyond Pricing if you prefer those).

They also support integration with real credit card merchant accounts.  So I'm under 2% for CC fees on most of my channels now, don't have to live with Stripe's 2.9% anymore.  Except AirBnB of course.

What is the comp set that's being used to come up with the "market" price?  If the comps have the same sqft and bedroom count, but this property has part of it carved off into a JADU, then for sure it will sell for less than the comps.  Regardless of how nice the JADU is.  The death is just a red herring.

My ideal STR candidate is a property where I can add bedrooms within the existing building footprint. And it looks like plenty of opportunity for that with this house. You could easily carve another bedroom out of the basement and still have a very generous family room. Maybe even a 7th bedroom /w bath by converting part of the garage.

That kind of modification might hurt the resale appeal to a future owner-occupier, but let me tell you, it's STR gold. Lots of bedrooms is the ultimate amenity, and pretty difficult for competitors to copy 😊

 Re: PriceLabs, have you tried messing with the Demand Factor setting in the Advanced Customizations section?  "High" should have the exact effect of a bigger price swing between low and high demand dates.

I have a commercial policy from State Farm for my STR as well, and it's got three primary coverages. Building, liability, and loss of income. On my policy, the loss of income limit is based on 12 months gross income for the property. So I expect they're asking for the info to decide what this limit should be.

Agreed, Tahoe is a pretty good STR market. April and Nov through mid-Dec are the only true low seasons. Washoe County on the NV side is pretty lightly regulated with no cap or density restrictions on STR permits. Placer County on the CA side has a cap but hasn't hit it.

Forward looking occupancy in my north Tahoe comp set of ~100 properties is up 15-20% YoY.  I recently raised my prices.

FWIW, I think AirBnB already made some changes in response to this law.  Until recently, checkout would itemize pet and extra guest fees for the guest.  But now they are non-itemized parts of the subtotal, which is divided by the number of nights in the booking to get a nightly rate.

At the moment, cleaning fee is still itemized.  So either AirBnB thinks the new law doesn't apply to the cleaning fee, or they're still planning to do the same with that before July 1.

In any case, it appears hosts will still be able to configure whatever fees they like for cleaning, pets, extra guests, whatever.  And AirBnB will take care of generating a unified nightly rate that the guest sees.

I've got a $3.3M SFH, currently a STR that does very well. However, I've got *a lot* of equity tied up in it that I'd like to deploy elsewhere. $1.5M mortgage, 30-year-fixed at 2.5% so I really do not want to sell or refi.

I've looked at equity co-investment outfits like Point and Hometap, but the deal terms seem atrocious.  Hometap claims "no interest" but if you look at cash now vs. percent equity they'd take in a future sale, the implied interest rate is something like 25%.

Are there private investors out there who are interested in doing similar deals with better terms?  Also open to hearing other ideas for this situation.