STR Nightmare that most investors would probably overlook...

[Nash Mittelman]

So, I recently helped a client look for a home. It was a super cool single-family property, yet for some reason, the listing hadn't received any offers on offer day. After a closer look into the disclosures, it turns out that the ADU (permitted, junior ADU) was being rented for supplemental income on Airbnb. Unfortunately, one of the Airbnb guests committed suicide in the ADU, and under CA law, the owner has to disclose the event for at least 5 years.

The property is currently sitting on the market, listed at 1.5 million, and should sell for 1.7 million if there wasn't a death on the property. I'm a little mind blown at the fact that they might get 1.4 million for it (300k under market value) due to a guest/stranger who committed suicide, where the owners now have property that has a stigma around it. Circumstances completely out of the owners' control...

I share this because it's not something you might consider when innocently renting out an Airbnb for some passive income. You really have no control over the guests...