All Forum Posts by: Timothy Doenges

@Kevin Rollins Ok, a few more questions. Is it already tenanted? And are the rents already at market? If you are inheriting tenants at that cash flow point, you may not have a lot of room to take care of any issues that might arise related to old tenants.

@Tami R. I would agree, in most situations. But I am sure there are instances where the value added by these is worth more than the cost.

@Jay Hinrichs do you know if these things are eligible for bonus depreciation? Could they help investors looking to improve their tax position while reducing long term expenses?

Hey all, I was doing some reading on Tesla’s solar shingles (https://www.tesla.com/solarroof), and one of their selling points is that they can cut energy costs by 40-60 percent, and government incentives for solar energy can cut the installation cost down to near the cost of normal roof installation. My question is if the tax incentive for energy efficient home improvements counts for primary residences only, or if it works with investment properties too? Another question is if anyone had had experience using these on any investment property that needs a roof, whether flip or BRRRR? For flips, would a solar roof with lower energy costs and added tax savings be a selling point in some markets? For a BRRRR needing a roof, could this lower monthly expenses and help capture higher cash flow by reducing taxes? Finally, could this be a value-add on large MFs by lowering NOI?

Any chance you could redirect power, water, sewer, trash to tenants? I think that if you can do that, the deal instantly looks better. Also, is the purchase price negotiable? It looks a lot better at 100 or 110, depending of the seller would love a bit.

@Curt Davis Great point - definitely find either a) professionals in the market you are targeting, or b) find a reputable TK provider in that market. If you are not wanting to use TK, then start with RE agent, and they may be able to clue you in to contractors and property managers that are having success in the business now and are reputable for OOS investors.

@Andre Crabb I agree that affordability and income could be inverse, but aren't necessarily so. Many towns in the Midwest have higher-than-average wages and lower-than-average cost of living. I'm sure there are numerous other areas in the nation that perform well on affordability and income, but the MW is most obvious to me since I have lived in several areas of the Midwest for my entire life. Many of these areas also have healthy rental markets, both in SFRs and Multis. College towns may satisfy your requirements - maybe look for towns with Big 10 schools and go from there?

I think there might be a few metrics you would want to consider alongside price and property type. I’m playing catch-up on all the BP Podcasts, and several in the 225-235 range deal with assessing markets. Of the podcasts I’ve listened to, none really mention property prices, and only ‘kind of’ mention property type indirectly. 1) check affordability of living, even outside housing (though that is a huge part). What’s the employment rate? Average salary compared to national average? Also, what is the ratio of rent-to-mortgage in the target area? 2) what kind of actual employment, and what employers, are hot in the area? Make sure that no one employment sector (and no more than one employer) holds more than 15-20% of jobs in that city/region. This will help hedge you from changes in technology, employment trends, companies pulling out of an area, etc. 3) check supply versus demand. This is property type specific, to a point. Considering fourplexes, what is the inventory of that property type in the town? Do small multi-families work, or are the majority of renters/owners either in SFRs or apartments/condos? You can have the perfect fourplex in my area and still not be able to rent it at market rate because we have something like 80% home-ownership, a few small multis here and there, and maybe three apartment complexes in a county of 70,000 people. Since the fourplex isn’t popular near me, all the other economic indicators could be strong and a fourplex could still not work. Typically, these metrics are what drive people to places like Milwaukee, Memphis, NC, Cinci, Indy, and several towns in TX and FL. High on job growth, population trends in the right direction, good supply/demand (at least up to episode 233 of the BP podcast lol), good affordability, and markets that don’t seem to have topped out on growth yet. I hope this helps—and if I have missed any key indicators, please let me know. Good luck!

I would agree with most posters here that HQ2 may not move the needle. But Amazon is as much a movement as it is a company. If HQ2 moves somewhere, it’s a pretty safe bet that other companies will too. And that ripple can be a boon to even cities like NYC and LA, or could even help turn around the mass exodus in Chi-town. I’m anticipating a boost to that city’s housing market, both short-term as HQ2 goes in and over time as other companies follow them in.

Thanks again all for your great tips on management of STRs! @Nathan Gesner knowing I can sync calendars makes managing bookings WAAAAAAY easier, thanks a ton for the tip! And thanks, too, to @Ryan Swan for the advice on Buildium. I'm hoping to use the vacation rental to generate enough cash for down payments on smaller SFRs for rent, or for cash to fund flips, so I may end up using Buildium in the future. But for now, I think I will stick to simple accounting software and a centralized calendar. Again, thanks so much to you guys and to BiggerPockets for hosting such a wealth of great knowledge and people way smarter than me!

Tim

@James Wise @Nathan Gesner Thanks so much for the advice! We are just getting into our first vacation rental property, which is technically 4 units, so nowhere near 10. Thanks for the huge tips on management software vs. the AirBNB website itself. I think we would plan to list on both AirBNB and HomeAway, since both have a bit of a footprint in our area. 

I think the reason we were curious on management software was related to he multi-platform calendar. Do you know if the calendars on AirBNB, for example, can be interfaces to something like iCal or Google Calendar so bookings could be handled centrally instead of on a number of different booking sites?

Thanks again!

Hey all, I see a lot of investors using Buildium for investment properties, but does that translate to STRs/vacation rentals? If not, what software can you recommend that is optimized for STRs?