All Forum Posts by: Joshua Strickland

There are about a million ways to analyze these. You can go super in depth, or just wing it and ask yourself are other people making money with STRs in this market and jump in. I think the magic is somewhere in the middle. The reality is your management of the property is the largest variable with STRs. Are you going to treat it like a business and dive into your PMS and pricing tools to make sure you are maximizing revenue and reviews? Are you willing to hold your cleaners and handyman to a high standard while also being fair to them? 
The most efficient way is to reach out to other hosts on Airbnb/vrbo and see if they will share their numbers with you. If you reached to 10 people would 1 or 2 say yes? Yep! 
If going with a property manager any self respecting company should be able to provide you with a quick analysis too. 

@Joe C. not sure on that. I had a ton of write offs this year and showed mine barely making any money on paper and it didn’t seem to be an issue for my second one. 
At the end of the day if you need to offset a $2000/ month mortgage and only are able to show a paper income of $1500 per month that is still a $1500 swing back towards your DTI.

The most important thing I’ve learned with lenders is that they are “real humans” when it comes to analyzing and understanding your situation. They want to make the deal work because that’s how they get paid. Just have to make the calls and do the research to find the right one. 

Full disclosure - I'm not a lender, or cpa, or any of that financial type stuff; but here's what I've learned through many conversations with probably around 10 different lenders… To qualify for a 10% second home loan your DTI ratio will come into play. So you either need to make more or downgrade lifestyle to show your DTI can cover a 2nd home. No rental revenue from the place you're purchasing will be used in this calculation. However if you get an investment loan (some lenders will do as low as 15%) then the rent revenue of the house you're purchasing can be used for qualifying purchases. This all depends on the lender of course so if one tells you no, go talk to another.

Seems like your options are:

1. Pony up more $ for the down payment.

2. Bring in a 3rd partner with a lower DTI to qualify for the 10% loan. But 3's a crowd.

Side note - I have 2 10% down loans in my portfolio because once I could show the income from my first vacation home on my taxes I got a lender to agree to count it toward my DTI. I plan on getting another one next year after I file my taxes as long as I can find a property that will still cash flow 10% down.

Turnoverbnb for cleaners, Affordable Home Insurance in Miramar Beach can get you a vacation rental insurance quote. I was happy with them.

Most furniture stores offer financing, but don’t sign up for any sort of financing until after your closing date or it could cause issues with your new loan. 

Sounds like your getting over leveraged with no reserves regardless though. I’d personally look for a partner to do this deal with so I had reserves for a rainy day. But I have a lower risk tolerance.

Congrats on the purchased though. I close on my 4th rental (1st in FL) in PCB in June so we’ll sort of be neighbors. I’m using a combo of Amazon, Wayfair, and 13 Hub Lane to furnish mine.

A quick google search will get you multiple reports on top markets for STRs. 

Personally I ask myself 2 questions when looking at a market now: 1. Are other people profiting in this market? 2. Are those people smarter or dumber than me? Spoiler Alert - I am one of those dumb people profiting from STRs. 

My point being...18 months ago I was in your same headspace. And while I am still a "newbie" myself, the one thing I've learned is not to over analyze. Each STR you analyze you will find reasons why you should and reasons you shouldn't buy it. Truth be told...you really don't know until you jump in. Confidence comes from experience.

To actually answer your questions though: 1. AirDNA paid version will give you market insights on average occupancy, rates, high times, low times, etc. It isn't law, but a decent starting point. 2. Have you reached out to any hosts on Airbnb/VRBO to ask if they would mind talking shop with you on their occupancy and daily rates? If you reach to 5 hosts on these platforms you'll get at least a 50% response rate.

Ready, Fire, Aim

There’s no right answer here. Just preference. I use Smartbnb and love it for Airbnb and VRBO bookings, but it doesn’t integrate with a direct booking website at the moment which is a downside. You’ll also want to get a good pricing tool. Pricelabs is my personal fave and worth every penny of the $20 per month.

I’d base the price off the Zillow “zestimate”. 

Kidding, but for real... just think about what cap rate or CoC return you would personally want to get out of a property and back out the math from there, then add 5-10% since the property is unique. The market will let you know if your price too high or too low by the offers or lack there of.

Anyone know about how long the PERS process with Fannie Mae takes? I'm under contract for a new condo, but my closing is on hold until the lender finds out if this condo will meet the PERS standards and be warrantable/non-warrantable. 

I’m not sure which have apps. I know price labs does not. A quick Google search will get you to the correct website for each though.