All Forum Posts by: Joe C.

Youtube video at slide he is presenting about Destin:

At exactly 14:00 into video he shows a slide and talks about Destin being the #1 market for home price declines in the US? Destin is a huge STR market. I just purchased a STR nearby and I'm not seeing this at all, but when someone like Ken says it, you start to question yourself.

Thoughts and input on what this is all about?

@Patrick Vos please do not do this. If you are intent on doing this, please read every single entry on this bigger pockets thread:

https://www.biggerpockets.com/...

This case got national attention. Just google "Palm Springs AirBnb squatter". This is unfortunately not the only instance of this happening. Minnesota landlord and eviction laws apply at some point, you better know when that is because you could be in for a rude awakening when you are expecting your guest to leave.

For every case of this happening, I'm sure there are 99 cases of trouble free longer term guests. Just be prepared to be that 1.

@Paul Cox The article you mentioned says:

Fannie Mae issues ruling on renting newly-purchased second homes on Airbnb

The update clarifies that homeowners can rent out second homes after 1 year of ownership

National /April 19, 2019 12:00 PMTRD Staff

Second-home owners who want to rent out their properties will breath a sigh of relief, and perhaps make a bit of cash.

A newly rewritten document from Fannie Mae suggests homeowners and lenders may have been misinterpreting rules around rentals of second homes since 2001.

Fannie Mae’s April 3 clarification of the “Second-Home Rider” shows that homeowners are allowed to rent out a second home after one year of ownership, and that short-term renting during the first year is also permitted under specific conditions, the Wall Street Journal reported.

Previously, the rider had been interpreted by many owners and lenders as saying that second-home owners with mortgages backed by Fannie Mae or Freddie Mac were completely prohibited from renting their properties. It read: “Borrower shall occupy, and shall only use, the Property as Borrower’s second home.”

A Fannie Mae spokesperson told the Wall Street Journal that the rules had not changed, but that the rewrite was triggered by calls from lenders wondering whether borrowers could use short-term rental services like Airbnb.

The new rider states: “Borrower will maintain exclusive control over the occupancy of the Property, including short-term rentals.” While owners are still barred from turning second-homes over to management companies or timeshare arrangements, the rewording makes it clear that after the first year, and owner can explore these and other short-term rental options.

Before this clarification, some borrowers and lenders believed that in order to rent out a second-home, they would need to take out “investment mortgages,” with higher rates. [WSJ] – Decca Muldowney

@Luke Carl Where in forgotten coast? Not familiar with that area. Thanks.

There is more to an STR than heads in beds. Do you have enough places for people to sit and watch TV? Eat at the dinner table? What about plates/bowls/mugs/etc.? Parking spaces? 2 toddlers might mean 2 high chairs and 2 pack-n-plays, do you have room for that?

Decide for yourself the maximum number of people you will support, set a hard limit and politely reject any request to go over. This includes number of cars. There's a big difference between 2 families of 4 each showing up in 2 cars vs. 8 single adults showing up in 8 cars.

Nobody will be happy in a cramped house no matter what they say. They will leave you bad reviews for all the problems they encounter. The bottom line is they can't afford the home they really need to rent for their group size and are looking for you to fix their problem when what they need is to rent the proper size home.

You might want to consider Wildwood. I just sold a 3/2 condo in Wildwood Crest purchased 11 years ago for 257K for 447K and it rented out for about 30K per year give or take, last year 33K. That was a full-time rental with no personal use. Wildwood is generally cheaper but the rents are not that much less.

Wildwood is different from Wildwood Crest, it is more depressed and more in need of some love. However the future is bright and there are some major redevelopment projects investing big money into the area. The area is very popular with the Philly crowd and those suburbs. It is a drive from NNJ however.

The NJ shore market is made up of mostly 2nd home owners that rent to cover some expenses not to make a killing in profit. The prices they pay are not based on rental income. If you are looking purely for rental income and no personal use you should probably look elsewhere. However I assume you are looking for mixed personal use and for the right property the price appreciation may make up for the income and allow you and the family to have a place to call home for a few weeks in summer and as much as you want in the off seasons. Just be clear what you are looking to do, make money or make memories.

@David Hedges it is impossible to answer your question without more specifics. Please go back and read as much of the old posts in this forum as you possibly can, your question has been asked dozens of times.

You can't answer your question because it depends on so many factors. Where is the property and what is the market like? Is it a ski area that rents 3 months of the year? A condo near Disney in Orlando? A residential apartment in NYC?

Cleaning costs on a 2 br cabin in Pigeon Forge vs. a 2 br apt in Brooklyn NY vs a 2 br home in Malibu will be wildly different.

Look up Luke Carl's enemy method and you'll have a much better start before asking the next set of questions.

Joe

What happened in Pigeon Forge in 2005????

LOL when then consider me corrected! Enjoy your trip! But would you fly to Gulf Shores? 

In Wildwood Crest I had a 3/2 for 11 years I rented. I could do $2750 in season weeks, last week of June through maybe 3rd week of August. Rates out of season need to be aggressive to rent out but in season is a no brainer. The Wildwoods have a lot going on in September so I could usually rent through 3rd week of September no problem, after that is pretty much dead. Add in Memorial Day weekend and if you are luck another week or maybe a few weekends in June and that's pretty much it unless you have some specific draw. I did not do Airbnb but perhaps could have picked up a few weekends in the winter but honestly it wasn't worth it to keep everything going all year like cable for the possibility of a weekend rental. With cleaning fees it is hard to compete with hotels for the off season.

Subtract out all your costs = profit! 

Good luck to you!