All Forum Posts by: Joshua Strickland

Mine sprays monthly and treats for stupid carpenter bees 2x per year. (Cabin issues)

These things happen. Unless it happens multiple times in a row I wouldn’t be too concerned about it, but obviously assist the guest while they are staying. Could just be a rogue roach.

To go above and beyond you can request your pest company to make an extra trip while the guest are still there. Might cost you $40, but could save a good review. If they do make sure you tell them to ask the tech not to speak with the guests and only report any issues to you. Just in case they do actually find some nasty stuff.

Replace the door knob that has a keyhole with one that doesn’t and just use your smart lock deadbolt as the lock. There are many types out there but I like the schlage encode and I’ve never had an issue like this with it. Have a set of backup keys in a lockbox outside the property in case the battery dies.

I also have one long term rental in addition to STRs and that income is counted as well. It does all depend on the bank. I'd always compare multiple ones until you get what you're looking for. I probably called 15-20 lenders to get the terms I was looking for on my newest STR in FL.

I second what @Joseph Bafia said. I did the same thing and the lender would count my STR income once it was filed on my tax return. Helps offset DTI so you can qualify for another second home loan with cheaper rates and less down.

GSMNP is the big draw, but Harrah’s Cherokee Casino isn’t far from their too. People also come for the railroad. The Polar Express train ride is in Bryson City and gets a lot of traffic around Christmas time.

All depends on the lender. Some local lenders I've found will go as little as 15% down while using STR projected income and there are also national lenders like Host Financial and Visio Lending if you can put 20 or 25% down. These are for investment loans though, so your rate will be at least a percentage point higher in my experience.

I don’t know of a lender that will allow you to use projected rental income if doing a second home/vacation loan. Pretty sure Fannie or Freddie wouldn’t buy that loan if they did, but I could be wrong. Just none of the 20+ lenders I’ve ever spoken with would do that. Let me know if you find one and I’ll be calling them same day!

Supply vs. demand

@Corey Frank Here is my opinion and is probably worth what you paid for it…

I believe the threat to the STR market will be an economic downturn that doesn't so much effect housing prices, but rather median wages. The loan process is much stronger today than during the Great Recession which if you look back through history was the largest housing crash since the Great Depression by far and the market still came back in less than a decade. So even if it "crashed" history says it is much more likely to level off or go down by only 5-10% vs. 50%+ like it did in 2008.

However, if wages do not keep up with inflation then people will have to choose between going on vacation or buying groceries. This could cause STR rates to fall which probably will regardless once people can begin going on cruises and traveling to other parts of the world. Basic economics of increased supply with the same demand. 

I don’t have a crystal ball but personally see the STR and housing market remaining strong for the next couple of years given we don’t see a world changing event like Covid 2.0 or a war.

Last point - If I didn’t invest in STRs then it would either be stocks, crypto, or other business ventures. Diversification is a great hedge, but all of those would also be effected by any unforeseen event. And with inflation on the rise I choose assets over dollars in the bank. (Other than my very conservative amount of reserves for a rainy day.)

@Collin Hays you seem pretty bearish on the state of the current market. I agree that there are many factors that cause concerns, but it seems there are just as many factors that would say this market could continue for years to come. Full disclosure I am still new to real estate investing and have not owned during a bear market (unless you consider the first part of covid that). I am curious as to what strategy you would recommend for new people that have already jumped in with multiple properties or people like @Alex Smith who are looking to jump into investing? My thought process is that all investing whether in real estate, stocks, or business ventures is inherently risky, but so is doing nothing and holding cash with inflation running rampant. Buy less properties while putting down more cash on the front end so that you have more equity in case of a crash or hold off investing at all?

Pros - cash flow (depending on market) and portfolio diversity 

Cons - completely new business venture, will need to build a different team for STR.

You get equity pay down and potential for appreciation with both, which is the real wealth builder.