Short term rental financing

[Sean Starkey]

So I was just told by a lender from OneMortgage that I can take up to 90% LTV for a HELOC if my property appraises for at least 930k. I live in Huntington Beach, CA. I am looking to use the 190k the lender said I could take out to invest in short term rentals. Any recommendations about HELOC or STR rentals? I am new and I am liking the airbnb route to invest in real estate

Thanks!

[James Carlson]

Originally posted by @Sean Starkey:

So I was just told by a lender from OneMortgage that I can take up to 90% LTV for a HELOC if my property appraises for at least 930k. I live in Huntington Beach, CA. I am looking to use the 190k the lender said I could take out to invest in short term rentals. Any recommendations about HELOC or STR rentals? I am new and I am liking the airbnb route to invest in real estate

Thanks!

Congrats on that equity. We have a nice HELOC that we have usedultiple times for several of our investments in Colorado. I like them better than cash-out refis because you only pay interest whenyou use them, and as soon as you pay them off, you pay nothing.

In terms of STRs ... first, I'd think about your goals. Is this a pure short-term rental investment or is it also a place you want to visit for vacation? We have a lot of investors who buy a second home here in Denver or Colorado Springs or the foothills around both to mostly Airbnb and then stay in it every few months when visiting. The returns here are great, but there might be some sligtly better returns if your goal is to make this a pure investment vacation rental. So again, I'd first think about what this purchase is for.

Once you know that, then find an agent that knows the STR markets in those areas and start a conversation. Most importantly will be knowing the Airbnb laws and regulations as cities are increasingly cracking down on STRs. You want to buy where you have some regulatory certainty. Like here in Colorado, many of the ski towns are placing restrictions on Airbnb, and most cities like Denver and Colorado Springs prohibit STRs in investment properties, but there are cities in the Denver metro (but not the actual city of Denver) that allow for this, as well as many unincorporated County areas where you find mountain homes.

Whatever you decide, I wish you luck. Cheers!