All Forum Posts by: Jerry W.

There have been several cases on this.  New Orleans also lost a very similar case.  In Pennsylvania the courts ruled that you did NOT need a realtors license to manage a short term rental for another, even though it was required for long term rentals.  Please note that the Austin case is a federal court, so you can argue it is precedent nationally as it is based upon the United States Constitution, where the PA case is based out of a state court.

@Chelsea Price, in my experience it depends on why they are traveling.  If they are going to the beach or Disneyland, or a ball game they want to be as close as possible.  If they are just travelers passing through they will not care about location other than close to the highway.  In they case of traveling through more bedrooms is very important as it gives you options of folks who want to use it.  2 bedrooms means 2 couples can rent it or a couple with children can rent it, etc.  I would look at it as will the ability to have more people want to rent it overcome the convenience of close.

@Taylor Cartledge, I try to have on hand not less than 3 of everything I think I need.  One clean for them, one set to just swap out instead of wash in place, and one emergency set in case of rips, stains, or other problems.  I go with 2 towels per bed, two hand towels per bathroom, two wash cloths per bed, one set of sheets and pillow cases per bed.  Multiply all of that x3.  Buy 2 shams or bed covers for each bed instead of 3.  Your cleaner will thank you especially if they have more than one to do per day.  I just had all 5 turnover today and only have one cleaner.  Having extra of everything to wash later is a must.  I also go and start towels in a couple of units when we have multiple turnovers, they are the longest to dry.  Also get washing machines with quick wash and quick dry settings.  That also really helps.

If you live local have at least one set of everything you need in your own home in case your cleaner is a no show or calls in sick, etc.  That way you are a backup.

@Dan N., I use Fort Wayne Property Group LLC. I have used them for a few years and I am fairly happy with them.

Jerry

June was clearly down about 20% from the last couple of years, but July was pretty good, easily as good as last year.  Odd recent weather patterns may have contributed to June being off.

@Brianne Lee and @Nathan Gesner, I think maybe buy a few houses with 6 or 7 bedrooms, add a few more and rent out by the room for $800 a month.  They should be paid off by the end of the boom.  Just a thought.  Maybe we should make a road trip to all meet and strategize?

HEHE, this sounds like fun.  It might complicate things if you get a bad host who breaks things or won't leave, but their reviews should tell you a lot about them.  Let me know if anyone wants to visit Wyoming, maybe go see the Buffalo BIll Cody Museum, head to Yellowstone Park a few days, maybe lounge in some hot pools, look at Indian petroglyphs, go hiking, float the river or fish it, etc.

@Abby Weaver, welcome to BP. The laws of all states differ a little, but here are my thoughts. First using an LLC or some form of corporate existence does provide some protection. The problem is that as long as you are the sole operator you do not gain a lot of the protection available. The LLC does protect you from being sued directly if operated properly, the problem is that most liability claims involve some type of wrong doing, since you are doing the wrong doing they will add you anyway. For example, if you hire a plumber and the plumber messes up the furnace and the house explodes then you did not breach the standard of care the plumber did and you can use that as a defense. If however you drive the company car drunk and hit someone, it doesn't matter that the LLC owned the car or that you were acting as a member of the LLC they will sue and win. Many of the suits I see are based upon failing to do an action. Stairs with loose railings, stairs that have improper drops or slanted, etc are an example. The manager should have repaired them to code. The failure to repair them is a breach of a duty of safety owed to the tenant and his guests, the failure to repair causes the fall, and the person is damaged and gets compensated for lost wages, pain and suffering, loss of future earnings, loss of quality of life, etc and they want hundreds of thousands. So yes having an LLC helps in many circumstances, but you lose a lot by still being hands on.

I use a company for the majority of my rental units even though I self manage.  It all helps.

@Dan N., you have already probably gotten all the information you wanted, so I will toss my brief 2 cents in. First in my experience loans obtained in the name of an LLC costs me about 1% higher interest rate than in my personal name. Next single member LLCs do provide some personal liability protection in lawsuits. Some states give them more protection than others, but as far as I know all states recognize them. Piercing the corporate veil is usually a matter of equity, not law. So a judge or jury has a lot of leeway in that decision. There has to a legitimate reason to pierce however. The most common reason is alter ego. That is usually where you comingle funds from personal and your LLC, intentionally under capitalizing your LLc is also a very common. Transferring a property from your personal name into an LLC that has an existing mortgage in your personal name in my opinion in my state would not be sufficient to pierce the veil if that was the only issue. It is common to put property into an LLC by the creator of it so it can do business, and to expect the LLC to pay the mortgage if the mortgage caused the price to be lowered.

I do believe that forming an LLC is a very cheap way to add personal liability protection. For a few hundred dollars a year you can get a lot of protection if you operate correctly. Managing your own property makes it a lot more difficult to avoid liability. If the property has a violation of the local code say your hand rail is too low or too short then the violation of the code if it is tied to the injury, falling down the stairs, then you might be personally liable, as it is your duty to provide a safe property. If you hired a licensed plumber to work on the furnace and he messes up and the tenant gets Carbon monoxide poisoning your are probably not liable, the plumber might be. It is highly likely that the lawyer will sue the LLC and the members of the LLC even if they are not liable. The vast majority of cases are settled out of court. The fear of having a million dollar judgement has caused a lot people to lose sleep and agree to a $100k settlement they would have never agreed to if it had only been a $100k lawsuit. You want all the layers of protection you can get when you get sued. A two hundred dollars a year for an LLC is pretty cheap insurance. I have seen landlords sued for a million dollars, as well as judgments that exceeded the insurance coverage.

I advise use an LLC and keep good insurance and if you can afford it, an umbrella policy. I dropped mine awhile back as it was getting close to $2k a year.

Most importantly run your business right.  Good luck in your investing.

Hey @Brianne Lee, welcome to BP. It looks like you are in Cheyenne. I am in Thermopolis. I did live in Laramie for awhile going to college. There used to be a REI meeting there, but I have not heard from them in 4 or 5 years. Good luck on your investing.