All Forum Posts by: Reid McCutcheon

We do Roku TV's. I kind of think that the younger generation doesn't really expect cable at all. Just internet to watch whichever streaming services they want. Over the course of the last three years, we've never been asked about cable TV. A couple times we've had inquiries about certain football, basketball, or baseball games. If you want to be extra safe, might sign up for ESPN+ and have it available for your guests. But with cable tv prices I don't even have cable myself, recently got rid of it when it went to over $300 a month, and that wasn't even with the sports package. I think cable TV will eventually price itself out of being relevant.

The only advantage I can see is if you think you may want them out quickly due to whatever reason, redoing the house, marketing it as a str or mtr, selling it. It's harder to do those things if you're 3 months into a 12 month lease with them.

We have one short term rental with evolve. 

Pros:

They do send a professional photographer on their dime

They send your state and city taxes to the proper spots every month

They list your property on multiple sites, Airbnb, VRBO, hotels.com, and their own site, Evolve. And we have had bookings from all sites. I haven't looked at the breakdown lately, but last year I think it was 50% Airbnb, 30% VRBO, and 10% each off hotels and evolve.

They have $5000 insurance on their side for each guest which is usually pretty easy to access if there has been an issue.

Cons:

The biggest and worst is that there is no dynamic pricing that changes between weekdays and weekends. So if you have them set it to $300 you cannot change it to $189 for Monday through Wednesday to try and grab some weekday travelers. It's either going to rent at your price or its not going to rent at all. You can set it all to $189, but then you're losing out come the weekend when you know you can get $300+ They do have a dynamic algorithm that increases prices during the busy times of the year, so that's good. But about 2 months out from those times, if it's not rented yet, the price will fall down to whatever your base price is set to.

There's a 10% management fee that is arguably not worth it once you have some experience and know what you are doing.

But...Once you have experience and know what you are doing, Evolve has super host status and owns the listing. And maybe your listing now has 40 reviews, sitting at 4.98 stars. If you quit using them, you will be starting from scratch on your own, no reviews, no super host status.

May not be an evolve issues, but they won't go to bat too hard for the owners over guest related issues. Like last year, we had gotten the place ready for a weekend stay during Halloween and the guests could check in at 4pm and we got a message around 5pm the day of that they had cancelled. They booked through Airbnb. It was a good booking, around $2400 total. We called evolve, they called Airbnb. They got back to us and said it must have been a good reason to cancel because they were allowed to cancel with no notice and no payment to us. So lost out on that income for the weekend and we weren't able to get it booked out on such short notice for the weekend. Not necessarily an evolve issue, but still.

Caroline Gerardo honestly, with our first year getting everything up and going, there was a good amount of work we didn't anticipate. So we basically wrote off every bit of income it produced, legitimately. But most all of the expenses were one off items. For 2023, year to date we are definitely doing better than year to date last year since we didn't start until April 1st 2022. The area we are in usually doesn't book out several months in advance, but last year, June through November averaged anywhere from $5000 to almost $8000. Currently showing a little over $30k for the year if you count all future stays for the year, but most of June through November is still completely open, so I think this year will at least meet if not exceed last year's revenue, especially since there should be way less expenses (knock on wood).

Hi, Question on whether or not we should apply for another HELOC and how that may affect our ability to refinance into a conventional loan later on.

We currently have a $150000 HELOC based on a few rentals. A little over $100k is available. We owe $49k on that one due to having to dip into it after some renters destroyed a rental and it required a good chunk to get back up to speed. Current rate is 8.5%

We own a STR that we purchased for $450k at the beginning of 2022. Gross rents were $66k for the first year. We own it free and clear and were thinking about applying for another HELOC based on that property. I think I'd prefer the HELOC since, unlike a conventional loan, we don't have to pay anything on it if the money isn't in play. But I guess the concern is that with so much credit to our name, would it make it more difficult on our debt to income if we purchased a property with cash from the credit line to make for a quick and easy cash sale and then turned around and set it with a conventional fixed mortgage to quickly pay off the HELOC. Basically, would having an extra HELOC lessen our ability to get conventional funding?

@Michael Baum I agree. I didn't realize about Evolve until we already had a good amount of reviews. But if we dropped them at this moment, we'd be starting over with no reviews and no superhost status. 

The three long term rentals I still have, I got them at good deals and I refinanced them all at 2.875% fixed 30-year in 2021. So in paying them off, there's really not a lot of skin left in the game other than raising the rents.  I owe $40k, $65k, and $86k on them. So really, overall there's just over $1000 a month total left on the bone between the three of them if they were all paid off. They are class C to C+. One of them might make an okay short term rental with its location in a B class area that's close to everything. 

The rents are my fault. I have long term residents in two of them and I didn't properly have my property management company raise the rents. 

They are all 3/2's. One has a two car garage. The rents are $1050, $1075, and $1250 with a 7% management fee. But the houses themselves, from comps, with a little spruce up could list for $240 to $250k each. Whether that's what they could get, I don't know. But that would most likely be new homeowners, investors couldn't make that work. 

The STR property is in Eureka Springs, AR. It's in a very good, if not great location. Easy walk to downtown, right across the street from the Crescent hotel. They only allow STR in commercially zoned areas. Luckily, this one is the only property commercially zoned within a few blocks. Last year, we had the house completely repainted, inside and outside, We had about half the siding on the house, which was rotten, replaced, redid the front porch, we replaced double exterior doors, got a lot of new furniture, redecorated all the walls, got a few new TV's, replaced an oven, blew insulation, had service work on the plumbing and the heat and air, and a lot of other things I can't even remember at the moment.

But most of that stuff should be good to go for awhile. We aren't really having too much trouble renting it. There has only been two weekends it didn't rent and those were in February. I would like to see more weekday stays. But from our limited year of renting it, dropping the price seems to bring parties, broken items, and complaints from the guests about things like not having complementary bathrobes and house shoes. The higher price point seems to bring people excited to stay and they usually give 5 star reviews.

I was thinking, with our first year at $66k gross but breaking even with no mortgage. How do people that are getting a 10% second home loan or 20% conventional make it work in this interest rate environment. My wife and I are taking our three year old to Seagrove, FL to stay for a week at the beginning of May. Five nights in a 1200 square foot 3/2 within a few block of the gulf. We're paying $2100 for our stay, that includes cleaning. We checked it out and the current owners bought in 2021 for $1.2 million. Seems like it'd be hard one to break even on if you have any kind of mortgage. And I see a lot of those types of prices still prevalent in very popular areas. The gulf, the Smokies, Broken Bow, OK. I'm thinking of looking in smaller places that may have specialized draw to the area that aren't so popular to the masses.

I think this is my first post. I signed up in 2017 but forgot I had an account here until I just recently started listening to the Bigger Pockets podcast.

Anyway, question for the group here. We currently have 3 single family homes we rent out as long term rentals. We also have another single family we short term rent.

I have a property management company that manages the long term rentals, but after everything is said and done on those, the monthly cash flow on them is only $1830.00. I say only because the total value of all three houses would be around $720k and the remaining equity between all three after mortgages would be around $525k.

I'm considering the option of selling all three and 1031'ing into higher cash flowing properties. My wife likes the idea of short term rentals. We now have a little over a years experience with our first short term rental. We 1031'd two LTR properties into one single family short term rental. Purchased it for $450,000 free and clear. We have it managed by Evolve, but we also have to be up there every week to make sure things are clean and in order (90 mile round trip) because the cleaners aren't amazing and the options for most service work in that area is hit or miss. We did gross almost $66,000 on it between when we started on April 1st of 2022 to March 30th of this year. But between management fees, cleaning, travel cost, upgrading, decorating, furnishing, painting, insulation, heating and cooling, plumbing, and supplies we spent about $66,000 of that amount. I'm thinking a lot of that first year stuff was a one off and this year will be better.

I do like the idea of short term rentals because I know they can make great returns, but I also want to know from people's experiences. The first year is usually the worst year for a return, right?

Now as far as my long term rentals, what do you all think. In the current real estate market with the new higher interest rates, should $500k be able to be 1031'd into either STR's or LTR's and make well over $1830 a month?