All Forum Posts by: Dan Maciejewski

Yes, have a rental agreement. Depending on your area, you should be able to get a state lease, or have an attorney draft you one for your specific circumstance. That will help you with the HOA and the courts if you ever have a problem. Make sure you follow the rules and document. I don't know your area, but in my experience, people that want to rent for 30 days will usually rent for a few months. So you may only end with 3-4 turns per year.  

My impression is that PA isn't like WA or NY for holdovers, so you most likely will never have that issue, especially with short term or medium term vacation rentals, but it never hurts to think about!

Also, advertise on furnished finders and VRBO, too.

Check your note to see what's allowed. 

BUT, in general you only need to occupy a second home for 14 days in a calendar year.   Chances are very high that you lender will tell you that they don't care, just report your rental earnings on your taxes.  If your rent is high enough, I believe you don't have to report if it's rented for less than 14 days.

When it's not a conventional product like mentioned above (VA, medical/doctor loans, etc.), it would usually be a double loan product, where you get a first and second mortgage at the same time. Generally I see the second purchase money mortgage being higher rate and much shorter term. It has helped with some jumbo products a few years ago but I haven't seen anything like that fly around me in a few years with all the extra cash coming in.

Mainly because your homeowner's policy would deny a claim and drop you if there was a guest claim.  They probably specifically disallow using the property as a rental, especially a short term rental in the policy.

Also check with some great local insurance brokers.  They may be able to find good deals.  And I I know KIN has been writing somewhat reasonable policies for my clients.  

A lot of those condos were purchased before the big appreciation of the past 2 years, so the returns are much better for the owners.

The restrictions are that, unless it's purpose-built as short term rentals, they usually have limits of 30-90 days minimum. Plus, the HOA can decide to restrict rentals at any time they vote. It just takes one powerful member that hates them to push it through.,

Treasure Island has a few zones (other than commercial where hotels are allowed) that restrict anywhere from 2-6 turns per year.  FL law makes it so that any municipality that tries to limit short term rentals loses ALL rights to restrict them.  Only laws in place prior to 2011 still stand.

-What are the returns like for condo hotels compared to unmanaged?

The returns will vary based on the purchase price and the ADR/occupancy.  The ADR will be determined by the other condos in the building as they are your direct competition.  Occupancy is largely a function of pricing.  You can run 75-85% all day if you are priced right, but when you start to overprice, you start to be the last unit in the building to be rented.  Honestly that's my biggest turn-off for beach condos as pure investments.  They are great if you mainly want a vacation home that you rent to defray the cost (or make cash flow, but that's rarer with today's prices).  So there's actually downward pressure on rents because a lot of the owners bought when prices were way lower, so they cash flow well at any price and they want to maximize occupancy, so they compete on price.  It makes it much harder to cash flow with today's prices.  That's why most (all of the pure investors) of my clients prefer single family homes -- you can price higher than the condos that cost the same.  

I think you're asking about the fees -- they are going to hit you and it will depend on the building how much they charge. Happy Fiddler has management built into the HOA, others charge a percent or a flat fee per booking.

-Views: Ocean vs Intercoastal. Obviously ocean is preferred but are people still doing well with intercoastal views?

Yes, you can do well with intercoastal views.  The occupancy will be the same, too.  You will see a fall-off with street views, but at the end of the day, it's a beach condo and will rent out fine.  The lower ADR will be offset by the lower purchase price.

-Can anyone recommend certain buildings that perform well over others?

In this market, you can just look at every listing in every building that allows it -- it's not like there's hundreds to wade through!

-What is your top criteria for investing in beach condos?

I like to look at the building maintenance.  And see if there have been big special assessments -- that's a sign that the fees are too low or the money isn't being spent well.  And then it;s a spiral down to deferred maintenance and more assessments.

-What are potential red flags e.g age of building, assessments, lack of parking, month long rental requirement vs. weekly etc.

Yes, all of those!  Also board members and management.  

Tampa Bay, specifically Pinellas County, has been a vacation-home Mecca for over a century and we shouldn't ever have a drop-off in occupancy.  There's plenty of beach -- from the county: 

35 miles of powdery white beaches and nearly 588 miles of coastline. And, with an average of 361 days of sunny weather each year, you can enjoy the surf, sun and sand just about whenever you would like.

And the great news, with the ever-changing vacation home landscape, is that Florida passed a bill that any town that allows short-term rentals cannot disallow them.  So there won't be any _____ is regulating short-term rentals, like I hear Denver is planning.

I think this can be a great idea.  There are many millionaires that say to buy investments before buying a primary.  

I could say that it would depend on the individual properties, but a good investment is rarely a bad idea!

This would highly depend on your state and jurisdiction.  It sounds like you have buyer's remorse and are grasping at "legal gotchas" to get unwind the purchase.

In my state, it's buyer beware. And the buyer's responsibility to obtain the HOA docs during the document review period, and determine all building stats and get insurance quotes during due diligence.

I assume that you paid cash if you're only looking at the insurance policy after closing.  A financed deal would have required insurance to begin on the day of close.

The answer, in most cases, to the question of, "who will be responsible?" can really only be you. There's nobody that will swoop in and pay your HOA dues or make sure your insurance is where you want it. Generally, teh time to verify everything is before you write the big check and take possession. Of course, that is what lawyers are for, so you can always ask an attorney in your local jurisdiction.

 You can operate your business "from" anywhere you choose.  The properties just need to be located where it's legal for them to be rented short term.  You can contact each municipality to find out the rules -- Municode is very helpful for that, as well

You do have to be a Real Estate Licensed Broker to manage property for others in Florida, and especially if you are going to be helping them search for and purchase a property.  Unlicensed practice of Real Estate is a felony in FL.  To get a broker license, you will have to have had a sales associate license for for 2 out of the past 5 years.  You may be able to manage if you have ownership equity in the properties, but that is definitely a lawyer question, and I am not a lawyer!

As far as recommendations for areas to look for a vacation rental / short-term rental in Pinellas, that will depend very heavily on many factors, not the least of which is budget. If you are purchasing above, say, 700k, I would be either on the beach barrier islands or in a luxury home close to the beach. 1.5-2.5MM+ might get you an amazing, performing property on the water with a 6%+ cap rate. Other price ranges will have various different areas that will maximize ROI.