All Forum Posts by: Kate Stoermer

Depends on your personal organizational style.  You can do 1 account and tag income and expenses, but most people find it easier to segregate because they aren't as on top of day to day expense review.  A bank like RelayFi is a great tool - seperate accounts per property makes it easy, but its really easy to navigate, move money, etc.  You can keep your receipts in RelayFi too.    Having an accounting system - or with 10 properties, maybe even a book-keeper. Alot of people use Quickbooks - its pricey.  Stessa, Wave, Xero are good alternatives.  Or the manual method - Sheets or Excel.  A good notion build out can help automate and its lower cost.  Some PM/channel management systems can help with accounting to. 

I know a couple hosts who have successfully done precisely this.  But the unsettled regulatory environent may be a concern. 

There are not current STR Regs, as previously noted.

As it happens, there is a meeting TODAY (virtual) on the proposed regs.  https://detroitmi.gov/events/how-should-detroit-handle-short...

I have a several blogs on this on my website:

The key is to understand depreciation. A single family home can only be depreciated over 27.5 year - and only the value of the building is depreciable, not the land it sits on.  So some suggest a condo is better since the entire purchase price is often depreciable. 

The building and things afixed to it can not be bonus depreciated - they will be depreciated over the 27.5 years, so that limits the potential tax benefit. 

But personal property - furnishings, cosemic fixtures, some flooring, landscaping, fencing, concrete etc and systems all have a shorter life.  You can do a cost segregation study to identify and segregate some of the items, while others (furnishings appliances) are easily seperated. This is where you can create a bigger year 1 "loss".  

You need to have an average of less than 7 day stays and materially participate (most do the 100 hour + less than anyone else rule) in order to qualify for the STR Loophole.

I've known many folks to be very successful with this strategy - and since material participation is an annual test, after the first year turn it over to someone else to manage and pay the taxes from the profits while your asset appreciates in value.  

If you buy turn key, you may have a smaller depreciation expense and stuggle to get in the hours (but its often still more managable and doable than starting from scratch). 

Some CPA insist on having at least 3 stays prior to considering it "in-service", some insist on at least 1 stay. The IRS definition of in service is simply available as an STR before the end of the tax year. Clearly the more stays, the more defensible in an audit. But it definitely has to be an STR on/by 12/31/25 to count for the current year.

Hope this helps. 

I can't comment on the product. But I would note that using a direct booking strategy is best when your on platform conversion rate is already optimized - you've nailed your audience, your market positioning, your pricing. Secondly, the journey a consumer takes is fueled in large part by trust - there is a sequential process a potential booker goes through and trust is part of that - and some will never trust an independent DB opportunity unless there is plenty of social proof that its legit. They'd rather book on platform. So I'd look carefully at the ROI and ensure your listing is already dialed in on platform before pushing to get more DB. it takes a lot of warm leads to get enough bookings to make the ROI worth it. Good luck.

Find a recieving warehouse - they receive and hold shipments. 

Congrats on your new place!  You've gotten some good feedback, heres an angle that hasn't be presented; how it's positioned in the marketplace - aka, marketing. Your listing is your marketing.  

Audience: Who we serve: Your place is a beach goers vacation spot for small groups 

Market:  (I use budget tier & location given those drive >70% of travel lodging choice) : Panama Beach - Midscale tier 

Submarket (who we compete with)   No beach view, walk to beach, townhome w small yard  

Niche:  None currently (this is how we position a property to distinguish from our comps)

Your headline - photos - price - and first 2 sentences of your listing copy should speak specifically to your niche.   

These analyses take time, but off the top without doing the work I'd say you need to niche down.

  Because this is a property that doesn't offer the key desireable attribute in the market- a view, you've got to reel in potential bookers with something other than a low price or you're just racing to the bottom, as they say. 

Right now, its offering me... nothing.  Some real estate photos.  

If this were my place, I'd style and stage the place and set it up to appeal to families with young kids.  I'd add a wagon, beach chairs, beach toys. A high chair and baby gate.  Tired parents who will be happy not to lug all that stuff to the beach - they see that in a listing, and feel seen and head right to your "reserve now" button. 

  I'd add a bit more color contrast to the kitchen, and I'd do something different with the yard and put in a swing set.   OR I'd go heavy on "dog friendly" since you do have the yard.   Whatever you do - do something. Its a crowded market, without a good niche its just another bland property in a sea of them.  

And to hit your goal of >$50K - you'll have to do well on this point.  I don't see many non-beach view properties hitting that price point in this area as I skim over AirDNA.  I do analyses like this as a service in my consulting buiness; and Id be happy to chat however in all honestly - you've gotten great feedback.  Put it into play. 

Use another source in addition to Rabbu (I use Rabbu and AirDNA).  Understand that marketing and management can signficantly influence how well a property performs 20, 30 even 40% above (or below) average - which is what these data sources are telling you.   And I would never tell someone to buy based on numbers alone without understanding  market positiong and management strategy  so as to understand the likelihood of actually achieving at least average - if not above.  

You might consider turn-key; an already up and running STR, and do the cost seg (which doesn't have to be complete by the calendar year end - just before you file taxes. I don't know the market - I just took a peak in AirDNA. Average income is only ~$33K but there are a number of property hitting 6 figures; so the "right" property can do well. Highly seasonal, so keep in mind you'll be covering costs till next summer. To correct mis-information; "in-service" date means this calendar year - the IRS has no stipulation about stays. Many CPA have a policy that a property must have 3 stays in order to claim in-service, but that is not a requirement, there is no legal precidence for that (although it clearly is a protective policy designed to withstand scrunity). AirDNA has a "For Sale" tab - a quick scroll (again, I don't know the market) revealed a few interesting choices in your price point. Make sure to double check regulations in the area - a look at township/city website in planning meeting minutes is something I recommend for all my investors in the current regulatory environment - make sure not only is it currently allowed, but also understand if they are discussing changes. A good realtor will know this, but you should put your eyes on the info regardless. Too many people have gotten bit for trusting others with key information like this. I hope this helps! -Kate

You might get traction w VRBO - prior versions don't just disappear.  I would reach out to them.  That said, obviously your host is a bit of a jerk and won't appreciate your doing so and may become a bigger jerk. But it might net the desired outcome. It may even be that a prior guest had an issue and that record would definitely exist - but someone at the platform would have to be reviewing the records. 

 I had something similiar happen once and I actually do screen shot the description when I book now  (I did not pursue the matter and I don't even recall what the issue was, but it was enough of an impact that I keep clear records now) 

Good luck. 

Speculating here, I didn't make the comment. I personally won't buy a PUD UNLESS its in a market like this where they are purpose built. In many markets, the added layer of condo association (or HOA) is another layer of regulatory risk. But honestly - for the most part an issue in this market (although do read the bylaws and make sure) and as you note - it maximizes cost seg.