All Forum Posts by: Sarah Kensinger

Quote from @Daniel Tisdale:

Quote from @Sarah Kensinger:

One question I thought of right away.... What does the future look like in Austin for STR? Could they be restricted or outright banned, and you have an expense property that can only be rented as a LTR. Also, would the type of home your thinking of building fit the neighborhood? I saw there are other million-dollar homes in the area, but what about the same street? You wouldn't want to build an expensive home on a middle-class street.

Lastly a 1.5-2 million property has to make more the $25k to make a profit, those type of properties usually need to push the 6-figure range on STR income. That might be something to think about and to run some hard numbers.

 Austin recently had their short term rental restrictions overturned due to a Texas Supreme Court case, so for now, it is entirely legal to obtain a non-owner occupied license. I have thought about the possibility of it somehow being overturned again and at that point I would sell it or move into it as my primary residence in the case that were to happen.

Yes, there are many other multi-million dollar homes in the neighborhood. Pretty much every new build that is over 2,500 square feet is selling well over $1.5 million, some even higher than that.

Are you suggesting that it would need to gross closer to $500k yearly to be profitable? I would have around $1 million of equity in the property, which I believe would help with the cash flow.

Thanks for your insights!

Wow that's pretty good to have regulations overturned! I hope it stays that way for all the hosts there. But to have a plan just in case something changes would be good. 

As for how much the property should gross...just off the top of my head, so run your numbers and double check. I would think the property should be around $250k-$300K just to get an 8%-10% COC return. 

One question I thought of right away.... What does the future look like in Austin for STR? Could they be restricted or outright banned, and you have an expense property that can only be rented as a LTR. Also, would the type of home your thinking of building fit the neighborhood? I saw there are other million-dollar homes in the area, but what about the same street? You wouldn't want to build an expensive home on a middle-class street.

Lastly a 1.5-2 million property has to make more the $25k to make a profit, those type of properties usually need to push the 6-figure range on STR income. That might be something to think about and to run some hard numbers.

For small areas it would cut back on your daily/weekly care. But for an entire backyard I wonder if that would be a little much for the reasons already mentioned.

I would for sure start with communicating with the guest on the situation. If they don't want to be helpful this maybe a lesson learned. Before the next guests arrive make some changes to either the monthly rent charge, house rules for the a/c, or try to make it where you can control the a/c remotely. 

So, I can't say much because we are purchasing commercial properties, but we have done extensive research before we made a decision on what type of property we wanted to purchase.  

First off, I would consider your goals and what your real estate purchases look like for the next several years. Can your DTI sustain another mortgage, or will another mortgage for a STR affect your future plans? If it's feasible to add another mortgage to your personal credit, your loan options are much better. But if you're like us, where another loan would complete kill the DTI and stop anything else from happening for many years to come, then using a commercial type of loan is the best option.

If you can find a loan officer that also helps with future planning, it would be beneficial! They can help walk through what would be the best route for your goals. 

You have great suggestions! Just make it clear to future guests that you're open to communication so if there's a problem, they can reach out. From time to time, you'll have someone disregard everything and do what they want, but conveying communication expectations early on does help.

Thanks for the share! A couple people on this forum have been bring awareness to this proposition with hopes that enough voices are heard to make a difference. I hope a resolution comes through since I know many people have a CO vacation home that is rented while they aren't using it. This bill would be hard for them and in a way those of us that want the STR mountain home for a CO vacation.

It might be beneficial if you can find a realtor that sells STR and see what they can tell you about the tourists that come to the area. You may find out some really good insight!

I think it all depends on what the host is comfortable with, and not many ask for a guest to sign a secondary rental agreement. To put it into perceptive... I have stayed at 33 STR and all of them were booked through Airbnb/VRBO besides one property. I have only signed 3 secondary rental agreements and one of those was through a direct booking site.

This would be wonderful for out of state investors or even PM companies. If you can build relationships and offer the services you have listed, I'm sure out of state owners would be glad to have you on their team!