All Forum Posts by: James Carlson

@Heidi Wills . Taking your last question first:

Yes, right now, buyers are getting a little more than they were over the summer. In the last four years in the Denver Metro area, the median sales price decreased about 5% from the summer peak to the winter low. But in each of those years, prices then jumped 14% from the winter low to the next summer's peak. So if the trend holds, median home prices might be a little lower now than the winter, but that won't last long as prices begin to climb again through spring and summer.  

Short-term rental (STR) property managers usually charge significantly more than traditional property managers. I see between 20 and 25%. That sounds like a lot, and it can be if you don't find the right property. With the right property, though, you could be pulling in 2-3x as much in rents, so the costs can offset. (To me, I think a "right property" is all about location for Airbnb. Tourists want to stay in places where they can feel the vibe of Denver. Sorry 'burbs, that's just not you as much.) Doing the numbers on an STR deal is no different than any other deal. Run your numbers, accounting for vacancies, management, repairs, etc. and see if they work. I know people who use Effortless Rental and like what they do. They're Denver-based. AirM&M is another, but I've had less experience with them.

About my rentals. I think as with anything in real estate: it's all local and individual. We get $1600 for a furnished 350sf studio in Cap Hill. It's pretty nice inside and is on the penthouse floor with partial mountain views. The building has a pool as well. Our other -- a furnished 1br in Cap Hill -- gets $2000. That building is really nice, has a pool and an amazing roof garden. What do other 1 or 2br units garner? That depends on so much. Location, size, neighborhood feel, furnishings, building, etc. I may be biased, but I think mine are furnished really well and show well in pictures. (The main way that nurses decide on a place.) My general rule that I've seen for my two units is that we get roughly 50% more for a furnished 3-6 month lease than we would for a conventional lease in the same space. 

Hope some of that helps. 

@Sukhi Singh As Airbnb's biggest fan, I am intrigued by your idea. I agree with what @Ken Graham and won't retread about STR-specific property management companies. To @Andrew Kerr 's point and yours about regulations and Airbnb-friendly cities ... I think there is a difference between an Airbnb-friendly city that just has nothing on the books about short-term rentals and an Airbnb-friendly city that has passed a law that allows them in a capacity that you can take advantage of. The former type seems like a place that just hasn't discovered Airbnb yet and may still pass something. the latter is a place that recognizes Airbnb and wants it in their city. If you don't want to have to keep up with regulations in tens, if not hundreds, of different jurisdictions, I'd look for places that have already addressed it in a favorable way.

Arizona, for instance, passed a law last year that just went into effect that overrides any local ban on Airbnb and basically allows it anywhere in the state. Now that's a pretty good place to look. 

Good luck and keep us up to date on your project. Very interesting. 

@Ryan Horne. All good advice above. And I love the Airbnb model. I'll just add that you want to check out the local ordinances. Most big cities are cracking down on short-term rentals like Airbnb offers. A lot of the cities that allow it at all, allow it only in your primary residence, which precludes you from doing it in an investment property. And at least hear in the Denver metro area, I know that while many of the areas immediately outside of Denver have not yet passed any laws, they are all considering it and are looking strongly at the primary-residence-only model. I don't know anything about Atlanta or College Park, so it may be a different regulatory environment down there. 

@Heidi Wills. In my experience, the bigger potential headache is turnover, not wear and tear. Pre-stay communication, cleaning, key handoffs ... it can get to be a bit much. If you're in a big market, however, there are companies that specialize in property management for short-term rentals and will handle everything for you. 

About Airbnb renters, I think people generally respect the property, especially if they feel it's your primary home when you're not there. (As opposed to some sparsely furnished unit that's obviously not your home.) I've just never had any experiences that told me Airbnb wears more on my property than a traditional long-term tenant. Is it a bit of a risk? Yes because you have more people coming through. But then again, you get a long-term tenant that is terrible, you're stuck with them for a bit. So it's really about your risk-tolerance and what you feel comfortable with. 

You could split the difference and furnish the place but rent to only traveling nurses. You get about 50% higher rents than conventional long-term unfurnished but don't have the potential headache of the full Airbnb experience.

Hi @Heidi Wills. Sounds like you're in a good position. As an aside to those questions, I'd throw this idea out there. Because you don't have a primary residence elsewhere, you could establish whatever place you buy as a primary residence, which would likely allow you to Airbnb (or short-term rent) your place while you're on assignment. It's a little more up-front work to get an STR-specific property manager, but the returns are great. (And it being your primary residence gets around a lot of local restrictions on Airbnb.)

The markets you're interested in vary widely, so you might try to nail down what your goal is in buying this property. Is it purely an investment? If so, are you looking for immediate cash-flow or more long-term appreciation? If it's not a pure investment, and you might want to live there between assignments, what kind of quality of life are you interested in? 

Good luck!

Hi @Account Closed. Not sure what kind of insurance you're looking for, but I just had a good experience with Mark Blaising at Sally Taylor Insurance Group. We purchased two policies for rentals and one primary homeowners policy. 

Hey @Jim Stanley 

I echo the sentiment that it's better to get started in real estate invesment than not. Too many people get caught in analysis paralysis. 

That said ... you seem to answer your own question in your headline -- "I know I should pass." Buying a property can seem daunting, and it seems like you like this deal more because it would be relatively easy to do with a friend and not because it actually makes financial sense. Consider first clearly defining your goals. Once you do, I bet you can find other places that will get you closer to meeting them. 

(Oh, and I wouldn't discount condos. HOAs can be high, but not all of them. And if the numbers work, then they work ... whether you have an HOA or not.)

Thanks for the info, Matt. I did a lot of research on ADUs after I posted this. Looks like very few pockets allow for new carriage house builds. Clayton, Wittier, Cole, City Park West, some parts of Sloan's lake area, Highlands and Platt Park. I set up a search for properties with all sorts of carriage house synonyms in the "remarks" section, as you mentioned. 

We'll see. 

Hey @Mindy Jensen . That's an awesome idea. You can scale Airbnb-style short-term rentals, but you've got to get an STR-specific property management team to start running your properties. I like your approach, though. An STR-legal property has the potential to well outperform a conventional long-term rental, so it's a great investment, even as a one-off.

That said, do you actually live in Longmont? If so, watch out for Longmont regulations.  This story from early last year says the city is looking at regulating Airbnb and other STRs. I don't know what the latest is, but because the biggest cities to tackle it so far -- Denver, Aurora and Boulder -- all have primary residence rules, you can bet Longmont would consider something similar. 

@Ro Maga. I agree with you and @Michael Greenberg about the dearth of options for short-term rentals or vacation rentals. It's such an untapped market and virtually none of the major carriers are offering a product to meet the need.  And there is definitely a need. A regular homeowner's policy or tenant policy won't cover any claim if the carrier finds out that the incident occurred during a short-term stay. 

I like Slice because it's totally on-demand. It's relatively cheap per day and it seems to cover a lot that other services don't. (Loss of income due to not being able to use your rental, liquor liability -- as in, if a guest gets drunk off your booze and then drives drunk.) Like Michael said, I don't think they're in Jersey, yet. CBIZ, which partners with VRBO's parent company HomeAway, is another good one.