All Forum Posts by: Stephen E.

Hi. This is all pretty accurate. Because of the homestead exemption a double in New Orleans is a great investment, but you can only do it one time! In other words, New Orleans might be a great investment for one house but not necessarily two. In December AirBnB started kicking people off the site if they didn't have permit numbers with their listings. The permit is easy to get if you have the homestead exemption, but that means you have to live on the other side. 

There are some ways around this, like mentioned. You could install a renter in one side and just pretend to live there. But there are some risks involved. In my experience in New Orleans STR, people really don't mind if you AirBnB the property you live on, but if you're not living there people might get rankled. A determined neighbor can really mess up your permit, which is about the only time the city will ever intervene. Generally you're only exposed to that risk when you're trying to skirt the law by not living on the property.

You could of course by a commercial property but that can be tricky and/or pricy for other reasons. I have a commercial property where I rent the store downstairs and legally rent the owners unit above the store as a STR. I also live in a double and have an accessory permit so I rent it out.

The STR market has taken a huge hit thanks to Covid. It might not come all the way back for a while.

One more thing, running a short term rental somewhere when you don't live nearby is not always as easy or profitable as it sounds. I make great money (when there's no pandemic) doing short term rentals right next door, and the neighbors don't mind because I'm a conscientious neighbor and people here generally believe that you should be able to do what you want with your own home. It's incredibly easy when you live next door and much harder, in my experience, when you don't. I personally haven't found a management company that would run it to my standards and they take an enormous amount of the profits.

There are different ways to do this. I'm a smaller landlord renting out 3 units. I have it in the lease that the rent has  to be paid by the 1st  electronically using either Venmo, Paypal, or Zelle. That's worked out fine. None of the tenants have an issue with it and I didn't have to set up some new system or pay out any percentages.

I'd be worried that you're not going to be able to evict them for a while. As a result I would probably ask for the equivalent of 6 months rent deducted from the price of the four-plex. It would also bother me that this wasn't something divulged earlier. If you're dealing with a trustworthy seller they should have let you know this was going on, imo. At any rate, if the rent is $1k per month, ask for a $6k deduction in price. Hopefully you'll be able to get them out for $2k, cash for keys, then you've made $4k on the difference.

Come up with something like that, something that makes it worth the risk that you might not get rent out of this tenant until next year.

I'm going to wade in here, but with a caveat that I don't know anything really. I own 5 doors in New Orleans.

I was doing STRs when covid hit and had to transition to long term renters. I did a lot of reading and spoke with people I knew, but in the end still had to make decisions. I put in a clause in the lease that they couldn't use Covid as an excuse not to pay their rents, since Covid was already happening and they were aware of this. I realized it wasn't enforceable since there was a no eviction order in effect, but in a lawsuit it would have been helpful.

That's the other thing. I was pretty straight forward that I would sue them. I didn't want to, but I couldn't afford not to. I'm to small of an operator. Just because you can't evict someone doesn't mean they're not liable. So a lot depends on the type of tenant. If they have a good credit rating, over 700, then that likely means something to them. People with nothing don't care, but people who have things to protect don't want to get sued and have their credit ruined.'

It's not that I'm unsympathetic, just if you're moving somewhere and you already know the situation, then you should have the means to pay rent. If something real came up, and I had reason to believe them, we would work it out.

Where I would be more hesitant in the current environment would be renting to someone who didn't have a credit rating. I'd be more inclined to let a place sit vacant longer than allow the wrong tenant, or take a risk on someone I wasn't 100% sure on. And I mean more than usual even because right now it's going to cost a lot more to get stuck with the wrong tenant than it usually does. So to me I think it means you up your standards to the point that you feel comfortable.

If there's an eviction moratorium where you are you won't be able to evict the tenants, but you may be able to convince them to move via cash for keys. I haven't done this but that's what I've read.

Tough call on the Keurig. I've gone both ways. I don't think guests care that much as long as you provide coffee. A basic coffee machine (has to be basic) and ground coffee seems to be just as good. Provide ground coffee and sugar, but not milk. I have one property with a Keurig and don't think I would do it again. Same with the bean grinder and whole beans + french press. Too many guests can't figure it out.

If you use a Keurig you only put out so many pods per guest. Have a locked place you store the rest of them.

I'm pretty fond of these sleeper sofas because they're so comfy to sleep on: https://www.amazon.com/Jaxx-Zipline-Convertible-Sleeper-Ottoman/dp/B013TUBL3W. It depends a little bit on where the sofa is and the vibe. I own two of them. One converts to a California King, and guests love that. But then I have to get special sheets, so downside. If every mattress is the same you don't have to figure out which sheets are which.

Another thing I do, that I like but it's not for everyone, is I've created a google doc for each property and I send the google doc to the tenant a week before they arrive. What I like about this is the google doc is a living document, you can change it anytime. I put the wifi code, lock code, etc. all in the google doc.

One very last tip I should have included. You need to provide check-in instructions like you're dealing with someone mentally disabled. Here's the door (picture of door). Insert copper key. Turn the key to the left... etc. 95% of guest problems happen at check-in. Directions need to be almost unbearably clear for getting into the house.

This sounds good. My personal opinion is that I would never buy an STR property that couldn't cover itself plus a little profit if the STR didn't work out. There are a lot of reasons an STR won't work out, some of them have not even been thought of yet. I've managed and owned a fair number of STRs. A couple of things that have helped me:

1. It's not much work, but it occupies a lot of mental real estate. I've found that managing 1 is very easy, incredible profit for investment, but it doesn't scale well. Also, it's just as hard running a STR that makes $100 a night as $500 a night. I've personally paired back so only my best performing properties are STR, as well as my personal home if I'm traveling.

2. I use Beyond Pricing for setting rates. You have no idea how much you are leaving on the table if you don't have software working for you.

3. Gotta have a pushbutton entry on the front door, either keycode or smart lock. But just as important is having a secondary way to get into the house if the lock fails for any reason. There is (almost) no bigger emergency than a guest that can't get inside.

4. Every couch should also be a bed.

5. Every bed should be at least a queen, king if possible.

6. Maybe most important: str guests should not have to learn anything. Things that a long term renter can easily deal with an STR renter can't, like a wonky doorlock, a trick for operating the stove. They shouldn't have to put any thought into anything. Extras that require some knowledge/learning on the part of the guests, like a high end esspresso machine, are just asking for trouble.

Tokyo. But I wouldn't know how to make a living there as an investor.

Did you ever find out the answer to this?