All Forum Posts by: Jon Martin

Quote from @Mat Garcia:

I feel the same way as well. Every property in your STR portfolio is a property tax bill, a lawn to mow, a roof, an HVAC, and a thousand things that can break and go missing, often occurring in short succession after one another. Would rather have 3-5 properties that are top notch than dozens of mediocre units. I could even advocate for a single great property if it weren't for the risk of being shut down by a disaster or weather event, which is why I like the idea of a small handful spread between at least 2 markets.

I've also come to the conclusion that you are either 1 bedroom or 5+ bedroom. 2-4 bedrooms are the squishy saturated middle. 1 bedrooms make good income relative to purchase price, but a 1 bedroom SFR (assuming you can find one) will get killed on the recurring expenses that don't scale down like WIFI/Cable, STR insurance, lawn care etc. I see this with my 2 bedroom that may as well be a 1 bedroom because 85% of my stays are 1-2 people, and many of the recurring expenses are about the same as my 5 bedroom across town with an ADR 2-3X+ higher.

Whereas if you have a 8-20ish unit hotel, now you can capture that market segment at scale on one property and spread out the fixed costs. Plus you are also at a size where you can rent the whole place out for special events. 

You will have recurring expenses, so why not automate them and pick up some rewards along the way? Plus it keeps it all under one umbrella, so you don't have to be your own forensic accountant next spring trying to parse out what was charged to which property or business. 

If you stay too many nights per year you could run into trouble from a tax standpoint. Maybe rent the place to family/friends at a reduced rate through the OTA? I am not a tax professional and that is not tax or business advice, just a hypothetical. 

Ultimately it comes down to which goal is more important for you- the cash flow or a second home somewhere that you really enjoy? Ideally you could find a property that does both, although it would be tough to optimize for both. There is no right or wrong answer, only what works best for you- decide which lane is more important and go with that. 

Quote from @Andrew Steffens:

Any thoughts why it is falling well below pre-pandemic levels?  It is obvious COVID was a boom, but it is consistently falling well below pre-pandemic.  GSMNP is driveable for so many, so I don't think it is all relating to just economic factors.  Many people can drive on a tank of gas and get a very good deal on a cabin.

Interesting question. Maybe there are a lot of people that repeated that trip too many times and are now looking to other regional destinations? 

When it comes to repeat travel there is usually a community element to it, otherwise most people get bored. Growing up in Michigan, if you went to the same beach or lake every summer you would usually expect to spend time with the same people on the same program. 

From what I've gathered, Santa Rosa is not STR friendly, nor is Sonoma County in general because of a strict county wide ordinance. Which gives you an idea of how most residents feel about it. For that reason the performance of the existing stock is pretty good because they are grandfathered in. Not sure if it's even possible to legally enter the market at this point.

If you are set on the area then give the STR ordinance a look and maybe you will find a zoning code designator or part of the county where it's allowed and you can search for properties with that in mind.

To be clear I do not invest in the area but I used to live up that way and travel there frequently. Good luck with your search. 

It's your money. Lots of very successful RE investors use their 401k/IRAs to get started. Not hard to outperform a retirement account with sound RE investments. That said I do agree that investing in a self directed IRA could be the best of both worlds.

The 10% fee is unavoidable but you can offset the income tax obligation with cost seg/bonus depreciation, mortgage interest and other deductions. Also, IIRC the taxes and/or fees only applies to the employer contributions. 

Sounds like you are in a bear market 

***bah dum Ching***

Update . . . Spoke with someone at "superhost support" (lol) today. Sounded like they were out of India. They told me that I would be deactivating the listing, which would automatically cancel any outstanding listings without penalty. 

Considering the source I won't hang my hat on it, although he at least sent a summary of what we discussed. Will update if/when the time comes. 

Quote from @Collin Hays:

I’m living this nightmare now.  We had one home listed on Airbnb at the homeowner’s request. Then they sold the house and I had to cancel all reservations. Now Airbnb wants to fine me cancellation fees for all if that.  Been fighting for days now. 

 Yikes . . . How bad are the fines?!

Thanks @Michael Baum all great questions and ideas. 

Would expect to sell it to an owner occupant but you never know, the numbers are good enough to justify keeping it an STR and sell it turn key. Hot "path of progress" market where I got in low, so it would move quick.