All Forum Posts by: Dina Schmid

If all goes well with Monday's post-repairs inspection, we should close later in the week on a cabin that we want to use as a getaway for us + STR when we're not using it. It was a new build, shown completely furnished and the builder listed it for use as a STR after we saw it. We knew the place was special, that's why we jumped with a full-price offer. We had no idea just how many other people would think it's special.

The next available weekend is June 6th! There are bookings for the other weekends in June and only five random open days in March. While this is a good problem to have, I'm starting to stress about it for a few reasons I'll put below. I want to note that bookings will transfer, but we're under no contractual obligation to honor them. I'm trying to figure what the best thing is to do moving forward.

Reasons why I'm stressing:
1) There's a drone photo showing no other cabins around. It looks completely isolated. Except that this spring there's going to be a cabin built next door. By fall there might be others. Imagine showing up to a cabin you thought was isolated and finding construction going on?
2) I don't like the idea of renting out a cabin I haven't stayed in myself. I don't know if there's anything missing. It will be a royal PITA to do a one-night stay on a random Wednesday, but it could be done.
3) It's currently listed as pet-friendly with only a $30 pet fee. I'm highly allergic to cats (like super-allergic) and also allergic to most dogs. An extra $30/stay isn't enough for me to have to make myself a zombie on Benadryl in order to sleep there and not wake up with my eyes swollen shut because someone let their dog sleep in the bed.
4) I think it's been priced too low. It's led to incredibly high occupancy rate in the off-season, but I'd rather have a slightly lower occupancy rate in order to reduce wear and tear and leave some weekends open for personal use.

I'm at a loss on what to do about this. On one hand I like that it will probably cash flow (we expected to break even at best) and know there's issues with canceling reservations. On the other hand, I want to be able to enjoy this place too. Any suggestions? How have you handled it when you've purchased a popular existing STR?

If you're counting on getting some financial aid for your children's education, you'll want to take a good look at how owning an investment property (negatively) impacts financial aid. Your home equity you currently have will count as an asset on the CSS Profile, but not on the FAFSA - unless you've taken a HELOC to buy the other property. Home equity in an investment property will count against you on both. If your income is high enough that you won't qualify for financial aid (or you've saved enough in 529s) then it won't matter.

I'm going to say it depends on what your intended use is for the space. If you're keeping it a separate studio rental and want to maximize the space, then removing it seems to be the right move - and definitely reduces the liability. If it's going to be a bonus space for your rental, or you want to keep a very unique and vintage vibe going, and it's not operational (say it's a gas fireplace and you cut off the gas to it) then it could stay. You could decorate around it to create a very eye-catching 70s vibe. I think it would photograph well. 

I can answer your first question: Logan is home to the stunningly beautiful - and extremely popular - Hocking Hills State Park. It's also located near many other State Parks, Nature Preserves and Forests giving access to a lot of good hiking. 

We were looking to invest in the area, but ultimately decided not to for 3 reasons:

1) The area has become too popular. Hiking trails are so crowded that the most popular ones are one-way and you can find yourself waiting a long time to get through some spots on those trails. We wanted something we would use frequently and we have found ourselves drawn less to the HH area for this reason.

2) Lack of critical infrastructure. If it can be used as a STR it's going to have septic, well water and need Starlink for internet. High probability you won't have cell phone reception if you're close to HH Park.

3) Our money could buy something nicer in the Red River Gorge. It was a true trade-off as the Logan area is more limited in STRs and new builds so ADRs are higher and likely to stay there compared to RRG where the market is headed towards being flooded and there's the potential of ADRs going down like in Gatlinburg/Pigeon Forge area.

@Sarah Kensinger might be one to talk to.

@Shannon Leckinger My advice would be to be patient. It took us well over a year to find the property we're buying. During that time we were able to save more money and our budget went up. We also knew what we were looking for and jumped when we found it. So much so that my husband agreed to put in an offer even though he hadn't seen it. He was traveling and my friend went with me to the showing as a 2nd pair of eyes on it. 

I also suffered from analysis paralysis. It sounds like you might be in the situation I'm in: buying a vacation home that I plan to use as a STR when I'm not using it so that other people can help pay my mortgage. We are hoping to close in the next two weeks on a property that we know will *maybe* break even and more likely lose about $2K in the first year, but we're okay with that because we're getting something that we absolutely love and hope to enjoy for years to come. We've rented other people's STRs in the past and now we're putting that money into an investment instead. Since we're not in this 100% for the invesment, we're okay with a slightly negative cash flow. But the level of negative cash flow that you're talking about is quite high and it sounds like it's not something you're comfortable with and thus should look for something else.

Is your mortgage for a business/investment property or for a second/vacation home? If it's a mortgage for a second/vacation home, you will need to check that it can be transferred to an LLC. You may also need to change to a business insurance policy is that's not what you have already if you went with an LLC.

LLC protections are changing and it may not be worth it as others have pointed out. The IRS changed how they treat single-member LLCs (solopreneurs like myself) and I expect there will be more changes like in Illinois coming. Whether you go with an LLC or continue to own the property in your name, having good liability coverage is always recommended.

There are a lot of good resources out there if you want to DIY the decor. My personal favorite that I've used is Designer in a Binder. There's also a FB group just for STR design.

My 2 cents FWIS: You have three colors going right now and should stick with a 60-30-10 rule. You decide which of the orange, white and sage you want to be 60% of your decor and which are 30% and 10%. Then go for a rug that mixes those colors together well (you also really need a coffee table to fill the space and something vertical like a floor lamp to help balance out the different window sizes.) Since your walls are white, I wouldn't recommend a white curtain, but you could do something white with orange or sage in a pattern.  I'd also recommend you go big, bold pattern on the rug and small pattern on the curtains, but you could do the opposite. 

Artwork is often personal choice, but you definitely need some stuff there. Good luck with getting it all together!

There's a Facebook group for this and an associated newsletter that you could checkout: https://www.facebook.com/groups/strhomesforsale