All Forum Posts by: Melanie Johnston

To support @Ben Leybovich's assessment of the Phoenix market, this article came out today hailing Phoenix as one of the top markets for real estate investors:

http://click.inman.com/t/gcH1AAfbaBZ08QBK4pBJcBNIO...

@David Espana I am very sorry you are going through this. Thank you for sharing your experience with us. You will likely save someone else from going through the same thing. I hope you are able to get out of this situation as quickly and as inexpensively as possible.

@Shiloh Lundahl Thank you for sharing the details of your cautionary tale. I am wanting to form funding partnerships for fix and flips in Scottsdale and North Phoenix. Reading your insights makes me lean toward offering interest on money invested rather than the way going the way you and David both did, although that seems like a common approach. Just wanted to say thank you for the Mini Master Class on structuring a deal that ought to be a win-win for all involved.

@Kalpesh Gada I agree with lots of the advice you received:

• Buy a property that already has a pool.
• Above ground pools are rare here and would not compare well to other properties. Give up that idea.
• I have a single-family STR with a pool and I worry about it, although I carry insurance. For your sake I would search for a home with a community pool.
• When you find a home you like, always inquire about the HOA's rental rules. Or simply have your agent search for homes that don't have an HOA.

Good luck in your search!

Melanie

@Gerardo Hernandez I am renting it all year. Just sometimes I am doing nightly and sometimes monthly. I have to block off the dates in Evolve to be sure it's available while I'm trying to attract a monthly guest from the MLS.

@Gerardo Hernandez I signed up for a free account and it let me do enough research to share those things I shared with you. I did not pay.

@Gerardo Hernandez At first, the sites determine your rates for you, using their data and evaluating your competitors in the market. If you are going straight to Zillow, etc., you can pick your own rate. Maybe do searches for monthly rentals and see what others in your complex or nearby are getting.

@Gerardo Hernandez Thanks!

If you go to evolvevacationrental.com and search for listing 427526 you can see my listing. You will also see that I have much of it blocked off so that I have space to accept monthly guests. Since most people I've found don't book nightly until a few months before their arrival, I've still got time if I want to switch back. I listed it through the MLS (because I'm licensed). A lot of snow birds find rentals that way. But you can list on Zillow and other sites as an owner, so you might try that to see if you can attract monthly rentals. If it's a good listing, for even a 1-bedroom, snowbirds routinely pay $2500 a month in high season.

Evolve handles distributing the listing to Airbnb and VRBO, etc., and handles the bookings, taking a 10% fee. They had me way too low ($165?) in the beginning. I think the highest I got last season was $275 a night. But I've noticed they bumped my rate up for next high season, I guess because I got such good reviews.

Happy Hosting!

Melanie

@Gerardo Hernandez Good for you for checking the CC&Rs. Very smart!

I'm not sure if I was clear that I rent the house from her and then STR the whole house out, with her permission. I don't live there.

I will tell you that my calendar for 2019 high-season months looked full (just a few Tuesday-Thursday gaps here and there) and when you subtract those from 30 days you wind up with a 77% occupancy. Helps to take that into account.

I only opened for biz this past January, which went well, but the (Evolvevacationrental.com) algorithm kept my rate lower than I'd like because I was newly listed and had no reviews. I fought to get it increased. Feb. and March were mostly full.

When someone contacted me for a two-month rental for upcoming Dec. & Jan. I said yes because I will be getting $4000 in Dec. and $5800 in January. That's my rate for Feb. and March also. Slightly lower in April. I am liking the convenience of having one longer-term guest, instead of several guests per month. When I did the math, it was possible for me to make more doing 3-night minimum, but not enough for me to trade the convenience of one guest per month.

I have the freedom to change my mind and go back to nightly if I haven't booked that month.

Keep in mind your taxes. Research this and you'll find that Scottsdale does not charge a rental tax if you have less than a certain number of rentals and guests stay for at least 30 days.

Hope this helps,

Melanie

Welcome @Gerardo Hernandez! And welcome to the Wild West of Airbnb adventures!

I did month-minimum VRBOs back in the day and this January launched a short-term rental using a friend's house that I rent from her. Airbnb arbitrage, they call it.

To your question, I am a real estate agent and attend many symposiums on short-term rentals, the issues, government regulations, etc. My #1 tip is, first and foremost, talk with the HOA management company to determine their rental rules. If they tell you the community has a 30-day minimum rental, that doesn't necessarily put you out of business. Many snowbirds come to AZ for the months you mentioned, so you have a ready market for people who will pay a nice price per month (sometimes they stay for 3 months!) for a clean, well-located, well-appointed rental.

After renting my STR on a 3-night minimum basis this past January-May, I calculated how much time, energy and expense went in to turning the house over every 3-7 days and decided that next season I am switching to monthly for December through March, possibly through April, although snow birds often leave by then. (I also switched to monthly for the summer and attracted a 4-month tenant that helps me cover costs for the summer, with not much profit, but also not much headache.)

Your goal should be to have as light an impact on your neighbors as possible, especially in a condo setting. This will keep complaints down and ensure you don't appear on the HOA radar. Having a small condo might naturally cut down on bachelor parties and other guests who could make noise and potentially do damage. We were lucky this season and, despite hosting some large groups, only experienced a dented dishwasher door.

When you get started, I found an awesome cleaning company called Moxie Girl. I highly recommend them. Getting a solid cleaning company is a building block to running a successful vacation rental.

There is a lot of competition in Scottsdale. But there will always be people who flock here in the winter.

Go to Airdna.co and put in your property's zip code. You'll see all the current rentals, their average nightly rates, average ratings and lots of other spy data to help you make decisions.

Best of luck!

Melanie

Alexander,

No matter what sales price you settle on in the contract, the inspection period is your chance to find any issues that may affect the price you are willing to pay. I've had several transactions lately, representing both buyers and sellers, where the seller responded to the "Buyer Inspection Notice and Seller Response" (aka bin-ser) with an offer of a credit at close of escrow in lieu of repairs. These credits ranged from $1,200 to $4,500 on homes priced between $300,000 and $550,000. So that's your chance to essentially reduce the price to reflect items that need attention.

Hope this helps,

Melanie