All Forum Posts by: Jerry Jenkins

I have been doing Airbnb solely for 2 1/2 years an a SFH and even with internet connected lock and camera, maid service, auto price online service; I still have to spend 3 to 4 hours a week at the house checking condition, replacing supplies, and doing minor repairs. Remotely managing a short term rental will require you to have higher costs for Co-Host and might completely offset higher income from short term rentals depending on your market. You can write a standard lease for 6 months or 9 months if you have that timeline desire. I just recently added Someway and VRBO as listing channels but have not yet optimized completely to increase income and to limit time requirement.

I would recommend that you calla few property management companies that handle rentals in your area, have them provide furnished rental comps and expenses.  Then calla couple of Co-Hosts and have them run numbers for short term rental with them managing it 100%.  Once you have both numbers then you can see if the risks justify renting with either option.  This is for whole house listing.  When Started I did rent by the room and the labor and turn over requires one person there every day so you might have 1 person living in the house and managing the other rooms but again all of these options are basically a math problem.

Any reason behind those 4 cities?  Miami just had a news report where they are fining Airbnb owners and I also believe I saw another on Vancouver fighting short term rentals as well as NYC now stating it must be owner occupied and only allowed to lease for a certain number of days per year.  

Setting up things the way you are means that you will need to learn 4 different state laws on short term rentals and property in general, 4 metro areas on STR rules and regulations, 4 different seasonal demand for STR rentals Not saying it can not be done but it will be harder than 4 rentals in one market. Also remember that regulations are subject to change and you will need a Plan B if short term rentals are outlawed or if rates and occupancy suddenly drop. I also have an Airbnb that is cash flowing great but regs are still being written where my property is so I would not recommend a new host trying 4 markets. Make that a goal but focus on San Diego, learning that market and laws and once that is on autopilot then you can research and expand to area #2. Good luck.

WARNING!  Be VERY careful accepting advice on nationwide or worldwide forums like this and here is why.  ALL real estate law is STATE law and it varies greatly from state to state.  What may be legal, ethical, and binding in one state might not be the case in another state.  Your sales contract should have been approved for use in YOUR state to follow your state laws but would not be valid in another state so taking advice from people out of state cares with it risks.

We have all heard.."Location, Location, Location"   BUT has anyone EVER explained why you say it 3 times?  Here is a short version of my take on this old saying.

FIRST Location is again state laws.  Some states use attorneys to close while others use Title Companies.  Louisiana has parishes versus counties and sometime follow French law instead of English.  Property tax rates very greatly between states.  Rental eviction laws are another topic most investors miss.  Here in Nevada I can evict for non-payment in 12 days while other states require months; and this will effect your cost to manage the property over time.

SECOND Location is city or county.  Population going up or down? Jobs going up or down?  Do you have rental restrictions?  Restrictions of rental increases?  Local taxs and regulations.

THIRD Location is the neighborhood or community the property is located in. Is there an HOA? What are the HOA restrictions, fees, rental restrictions? Does the house back a 4 lane highway or a power line or a T intersection?

When evaluating ANY property you need to find answers to all 3 location issues to really know how the property will be for the use you have planned for it.  This is by no means a complete list for all 3 location issues but it should get you started at looking at other factors to consider.

Realtor in Las Vegas, NV where we are also in a Seller's market. I had a past client move to Texas and were wanting to return to Las Vegas and see is what they did to get a house without competing with other buyers. The wife went on to the county recorders website and got a list of all houses in their area of interest that was the same floorpan as the house they lived in here before and then she wrote a letter to the owner of record saying.."Family trying to return to Las Vegas and want kids in same school zone and are fully qualified for loan and hoping that you might consider selling your house." She did receive a response, seller got agent to list the house and put it under contract immediately and then represented both sides for reduced commission. This couple had rented out their old house and had used me to purchase 3 rentals they still own but knew the market was hot, most houses selling quickly and that they had enough experience to ensure that they did not overpay for the house. They did talk to me and I pulled comps and shot a video of the house for the walk thru since they were still in Texas but I was happy to help them out based on past purchases. They got a house that I would NOT have found for them since it was not listed on MLS and they saved 3% on commissions on a $600K home. I would have liked to earn a $18,000 commission but that was not in their best interest.

Below is Case/Schiller Index for national housing prices since 1895 with inflation backed out.  They also sell a current graph for different metro areas, like their 24 major metro area graph.  If you draw a line for each high and each low you will see that the national market goes up 10 to12 years and then falls for 5 or 6.  National we topped 2006 and fell to 2012....6 years.  2012 to 2018 is 6 years up so "normally" we should have another 4 to 6 years of increasing prices.  BUT all real estate is effected by local factors; the biggest being population growth or decline, job growth or decline.  if you look at how high we went in 2006 then you know that has to crash.

The last boom was intensified by very loose lending limits, 75% of buyers being 2rd family homes or "investment property". Right now we have; at least here in Las Vegas, NV 90% are owner occupied with stronger borrowing restrictions.  We are also still 30% under top boom prices while there are several markets in the uSa that are above boom prices.  I would suggest that everyone see where their local market is price wise compared to historical avgs and then decide if you want to ride the next wave down and backup again.  Real estate prices will always recover due to inflation and holding three down cycle while tenant pays down any loan amount can be a good strategy but it depends on how long you want to hold and your overall goals.

When a market tops there are signs.   Number of listings will increase, days on market get longer and sellers start accepting offers under list price or most recent comps because you have more sellers than buyers.  Prices will fall until the Supply/Demand changes to a more equal ratio.  At the bottom of the cycle the number of listings start selling faster so a reduction in listings, more aggressive offers from buyers, days on market get shorter, and prices start heading back up.  A huge factor is how the local economy is doing again in regards to population, jobs, taxs, avg. income.

First I would google Case/Schiller Index for 100 year graph and then see if you can find a Case/Shiller major metro market report for your area.  On avg. the national market goes upper 10 to 12 years and then falls for 5 to 6.  we topped in 2006 and fell until 2012 soil she bought in 2007 then she might be close to break even depending on the local market.  Some markets are already above the 2006 peak prices while others are 30% below.  The 2rd thing I would look for is population and job growth for your local area.  If population is going up and jobs are increasing then that will lead to higher rents and higher appreciation but if you are in Detroit where the population was declining then prices will collapse.  If it was not for illegal immigration the population of California would be going down and I think that the avg. income must also be declining considering high taxs and regulations.  I have never invested in California and am not a local expert but everything depends on your local market and how it is doing.  Talk to people working for the city and county to get a feel for job growth, population, planned expansions, etc to see if it makes sense to hold, buy, or sell.  Any local Realtor can pull rental comps for that neighborhood and show you how long rentals sit on the market and what current prices are.  

Have you studied Case/Shiller Index?  There is a 100year graph you can find on google showing the avg price of houses since 1895.  On avg. the market nationally goes up 10 to 12 years and then falls for 5 or 6 so I would look to see where your local market is in comparison to decide what the risks are for holding over 10 years.  Can/Shiller also does a 24 major metro study but they charge subscription fees for each market so it is not public data but you can find older reports online.

Few more tips;

I started with a Yale keyless lock but 2 problems. First is that Yale requires you to push STAR and then 4 number code and most guests forget the star, second it wore out after 1 1/2 years and did not provide enough power to completely close deadbolt even with new batteries.  I switched over to Schlage and on it you push the Schlage button to light it up and then 4 number code. Better lock, better programing, and hopefully longer life.

I originally bought $350 sheets and $56 microfiber cotton towels from Bed Bath and Beyond; the best they carried and got zero comments so now I buy $7 towels at HomeGoods and if they get stained I just replace.

Beyondpricing.com   My listing goes for 4 bedrooms with pool usually $130 Sunday thru Thursday and up to $300 on Friday and Saturday.  Last year for Dec 30 and 31 they recommend $778 for 2 nights and someone actually booked it so it is definitely worth the 1% of booked revenue they charge me per month.

Here in Las Vegas, NV we have 13,000 Realtor and there were 36,000 sales last year so that about 3 sales per agent.  40% of agents had ZERO sales.  The avg. income was $34,000 and UNDER 750 agents made over 100,000 for the year.  90% of agents quit the business within 2 years due to finances.

If you want to be a successful agent then you need to pick a "farm" a certain area where you NEED to be THE expert.  Go to EVERY listing in that farm.  Tour them day1 of listing and determine your own valuation for the property. Offer to sit Open Houses in that area for other agents regardless if they are listed by your office or not, just call the listing agent of the listing and offer to sit it and then give them feedback. 40% of the people who tour Open Houses are sellers and if you are the agent they see the most, talk to, demonstrate your willingness tone truthful and represent their best interests you will start to build a contact list of people who can use you or refer you.

Read a book called the Go Giver.  

If your location has restrictions against Airbnb or rentals less than 30 days; I would look in to traveling nurses who want furnished rentals for several weeks. There are forums for traveling nurses and you can check with local hospitals to see what needs they have for staffing.