All Forum Posts by: James Carlson

For those interested, we're going to host a discussion about Covid-19 and Airbnb in Colorado tonight starting at 6 p.m. MST.

Looks like Airbnb will cover 25% of hosts' lost revenue for all cancellations between March 14 and May 31. A glimmer of good news for Denver Airbnb hosts.

Airbnb just announced today (March 30) that they've set aside $250 million to offset losses to hosts.

The press release states, "When a guest cancels a reservation due to a COVID-19 related circumstance, with a check-in between March 14 and May 31, we will pay you 25% of what you would normally receive through your cancellation policy. This applies retroactively to all COVID-19 related cancellations during this period."

I know a lot of Airbnb hosts and STR buyers I've worked with in Denver and Colorado Springs were pissed that Airbnb overrode hosts' existing cancellation policies to unilaterally refund any guest for cancelling. This isn't full coverage, by any means, but it's something, and I'm happy to see Airbnb take a step toward doing the right thing.

@Colin Smith

I hear you, but I guess I'm trying to suss out the "you never know what will happen" advice from the concrete language of the law. If you can pay, then pay. Avoid any possibility of hiccups later. Solid advice. But if you're on the line and trying to decide what to do, I guess I'd like to know for my Denver or Colorado Springs clients what would actually happen if they did the mortgage forbearance.

Also @Matt M. @Colin Smith, are you hearing anything from your lenders about this?

@Chris Lopez

Thanks again for sharing. I'm not seeing that Covid-19-related mortgage forbearances still affecting credit. I'm actually seeing the opposite. (I'm not advocating what you should do, but do want to know what is possible.)

I'm interested to hear more about what you're reading or hearing. (And any lenders out there have thoughts about this? (@Travis Sperr @Jared Bouzek )

I've been reading advisories sent out by law firms (not necessarily in Denver) that work with banking/lending institutions. Here's what I'm finding:

This advisory from financial services law firm Troutman Sanders says 

• loan service providers will still report to credit bureaus BUT that lenders are required to report any accounts in forbearance as "current" if the forbearance was granted due to coronavirus. (See halfway down page under "Sec. 4021. Credit Reporting During COVID-19")

This advisory from Stokes Lawrence says two interesting things:

• A loan modification is normally classified as a "troubled debt restructuring" (TDR), which negatively affects credit. BUT, the CARES act (coronavirus relief bill) temporarily suspends classifying any loan modification as a TDR, if the modification is due to Covid-19. .... (See 1/4 way down page, "Provisions Granting Temporary Relief From Troubled Debt Restructurings (TDRs)")
• Like the first advisory, it also states that "Financial institutions who enter into forbearance agreements or loan modifications with borrowers due to the COVID-19 crisis must report these borrower accounts as 'current'" ... (See halfway down page under "Credit Protection for Borrowers.")

A couple other notes:

• Lenders are only required to report you as "current" if you were already current before coronavirus.
• You have to apply for forbearance. DO NOT JUST STOP MAKING PAYMENTS!
• Adding a "consumer statement" to each of the credit bureaus is another layer of protection. This is where you attach a statement explaining why there was a forbearance. (See first bullet point half-way down.)

The big takeaway I'm seeing is that applying for and being granted forbearance should have no impact on your future ability to qualify for a loan. What am I missing?

A quick reminder that we'll talk about coronavirus and Airbnb tonight at 6 p.m. Just a few of the things we'll touch on:

-- Why deferring mortgage payments might be a better option than accessing small business loans offered as part of the relief package.

-- Why I like medium-term rentals better than long-term rentals as a transition from Airbnb.

-- Things to be aware of if you're currently house-hacking in Denver or Colorado Springs

-- Other ideas for cutting costs right now.

I look forward to hearing about your experiences tonight. You can join the video meeting at meet.google.com/xyd-mtzj-nek or by phone at 724-617-2039‬ PIN: ‪271 423 059‬#

A quick reminder that we'll talk about coronavirus and Airbnb tonight at 6 p.m. Just a few of the things we'll touch on:

-- Why deferring mortgage payments might be a better option than accessing small business loans offered as part of the relief package.

-- Why I like medium-term rentals better than long-term rentals as a transition from Airbnb.

-- Things to be aware of if you're currently house-hacking in Denver or Colorado Springs

-- Other ideas for cutting costs right now.

I look forward to hearing about your experiences tonight. You can join the video meeting at meet.google.com/xyd-mtzj-nek or by phone at 724-617-2039‬ PIN: ‪271 423 059‬#

@Megan Hirlehey

Great post. Interesting discussion.

We have four medium-term furnished rentals between Denver and Colorado Springs. (One 1br, two 2br units, and one 3br unit.) 

I'll list some general thoughts below about the medium-term model, but up front I'll mention a big relevant con for anyone house hacking or doing a rent-by-the-room model like @Richard Santi: I have a buyer client who has a friend renting out three bedrooms. Two were vacant but about to be filled by tenants. The third bedroom was already occupied by a nurse. That nurse contracted coronavirus, and now the other two potential tenants pulled out. I don't know what the answer is, but it's something to consider.

That said ... 

We don't rent specifically to that demographic. Occasionally we get travel nurses, but we're interested in medium-term renters in general. We don't care if they're nurses or not. 

The pros are that: 

• It's more money. (20-40% more than a traditional long-term rental, in our experience). 
• You also get back into the unit more often to check on it and ensure it hasn't been ruined. 

The cons are that:

• It's slightly more work than a long-term tenant. (Though, I've done a lot of Airbnb/STRs, so coming from that world, mid-term rentals are a breeze.)
• Furnishing costs. (It's around $4,000-$5,000 for my 1br unit and about $6,500 each for our 2br units. Our 3br was our primary residence before furnished with our original stuff, so that cost isn't relevant.)

Other considerations

• I think the tenants are better. This might just be because the price point naturally pushes out lower-qualified tenants. They're more often in professional jobs, and not that that's a sure-bet that they're responsible, it is an indicator
• Marketing channels: We have had the bet luck on Airbnb (set the minimum night stay at 30+ days), Facebook Marketplace, Zillow and Furnished Finder. Zillow offers one free rental listing and subsequent listings are $9.99/listing. Furnished Finder is $99/year. Oh, and also look for specific groups targeting sublease, rooms-to-rent on Facebook. We have a few groups like that in both Denver and Colorado Springs, and posting there have brought some good leads.
• The lease is the same, for the most part. (In most cities, a 30-day rental is in the same category as a 1-year lease, so there no other legal considerations for the lease.) The only thing different is that we make them sign off on an inventory of the items in the place.

Hope that helps. Good luck!

@Brian Markley

I'd reach out to @Tyler Howell. He's a property manager in Denver. He runs Whole Property Management. I've had several buyers and investors of mine in Denver use him and have always been happy with his communication and management.