All Forum Posts by: Mike Leng

If you hire a PM, the fee alone will be more than 20%. Maintenance is at least 5%, but you should budget 10% to be safe. You are also missing property tax and utilities in your math.  Electricity in the summer can easily go up to $500 a month. Plus at least $100 monthly for internet. You also have no reserve for big ticket items like roof and ac and etc. These expenses will wipe out your remaining $13k. 

I think the realistic estimate is that you will get net 0 cash flow, but in 30 years you will get a house on the beach fully paid for (and will be worth probably $2M in 30 years), plus free vacation every year in this property. 

Juan, the real estate market is very hot in US now, but the US price (as a ratio to income) was quite low comparing to most other countries, so even with the spike in prices lately, we are probably still a little below average. 

By the way, I have always wanted to own a vacation home in the Azores. How familiar are you with that region? Is there an established STR eco system to allow a remote foreign investor to successfully own and rent out a property, i.e. multiple competitive Property Management companies, abundant labor supply and services, friendly government policies and tax schemes?

Buy an ETF with 5% dividend yield will give you 200k a year, with literally no work, and there is the upside of the stock appreciation which over long term is about 7 or 8 percent. 

An STR generating 120k gross will net about 60 to 70k (subtracting insurance, property tax, utilities, internet, commissions, wear and tear, potential damages and disasters). It will be down to 40k if you hire a property manager. If you have 30 of these, yes you will have a lot more cash flow, but how long will it take to build up this 30-property empire and at what cost to your time and energy?

The people who are successful at being a landlord, whether LTR or STR, are successful because they enjoy doing it and they are good at it. It's no difference than any other career. If somebody just wants an easy money stream, there are many other ways to accomplish that without the hassle.

If I have 4 million dollars, I will retire tomorrow regardless my age because I know I will never use up the money (with a middle class lifestyle).

I use the basic free version of Stessa.  It's a good idea to have this tool that can tabulate all the expenses at the end of the year and export to my accountant for tax filing, but the software is buggy. I only have one property and one bank account, yet it fails to download 10% of the transactions from that bank account. There is no pattern or reason why some transactions show up and some don't. I couldn't find any support from Stessa, except a forum where other people complain about the same thing. So I am still using my manual Excel tracking, but keeping the Stessa account in case they fix the problem later and can refresh and sync all the transactions. 

Yes, that's what I would do, if I want the reimbursement sooner.

One more thing regarding cash flow: at the end of the trip, you should file an expense report, seeking g reimbursement from the LLC. Then you withdraw the reimbursement amount from your LLC bank account and put it in your personal bank account. So you the "employee" is made whole immediately, and the LLC just incurred an expense, no different if it had paid a lawn mower guy.

Kerns, when you drive your own car for business, you write down the miles driven and at the end of the trip, calculate the reimbursement based on IRS published rate (56 cents per mile, I believe). That's the only reimbursement you can claim. While you are on the trip, you pay out of your own pocket for gas, window washer fluid, or whatever. If you are unlucky, you may even get a flat tire and have to pay to fix it using your own money.  All of that is on your own and should not be put on your company card. 

I believe that if you take mileage reimbursement, it covers all vehicle related expenses, so you can not get reimbursement for gas. 

I have Blue Vine too. It cannot initiate a bank transfer to put money into Blue Vine, at least at first when you just set up the bank link. You have to initiate the withdrawal from the sending bank.  Is this what you are asking? 

Virginia Beach has pretty strict rules for STR, except the Sandbridge area. To get a better understanding of the rules, go to the city website and read about it. You should also watch some video recordings of the city council meetings where the people applying for STR permits had to come to the public hearings and face the opposition.

There are people, including some politicians are talking about changing the city laws to make it less restrictive, but so far it's just talks.