How do you vet the neighbors around a potential VHR?

Question

My wife and I are starting our search for our first investment property/vacation rental. We are currently looking in South Lake Tahoe for a few reasons; we live in San Francisco so its close by and we are in SLT often and every familiar with the area so we will be able to use it for ourselves. I am aware of the VHR restrictions in SLT so our search is limited to the county and the Nevada side. One of my main requirements during our search is that the home must not have any close proximity neighbors. I've stayed in Airbnbs that had full time residents directly nextdoor and it was awkward, also dont want renters to potentially piss off neighbors and have the cops called. The most recent home we just looked at however I ignored this requirement.

We looked at a house that checked ALL the boxes, it was exactly what we wanted EXCEPT it had neighbors directly on either side. Started looking into the home and found it was used as a rental. Got the Airbnb and VRBO listings and its only listed for 30 night minimum stays. The most recent review on their Airbnb listing is from a renter saying the cops came to shut them down on their first night as the STR permit had expired. There were multiple reviews before that from renters who said the neighbors were rude, harassed them and would leave multiple notes on cars. All this points to neighbors who dont like STRs and would probably be a nightmare to deal with. Needless to say we quickly turned this property down.

This of course is all speculation. Maybe the neighbors just didnt like the current owner. Maybe they had legitimate complaints about the renters. Maybe the current owner just didnt vet his renters and rented to partiers, who knows. That brings me to my question; if you're buying a house to use as a STR that has close proximity neighbors, how do you know you arent buying a home next to some lunatic that will make it his mission to get your permit revoked?

Jon Crosby · Answer

@Ian Palmer  Congrats on your future acquisition first and foremost!

I have owned and operated an STR in South Lake (Meyers/Paradise) and had neighbors around as well. Fortunately they were wonderful neighbors and therefor I made it my personal mission to make sure I was doing what I could for them so that my rental was not bothering them.

Remember, they were their first, they live there, there kids are growing up there and they are the ones that should not be harassed by loud noises coming from the rentals. Obviously SLT has MAJOR issues going on with STRs right now because of so many owners/hosts not doing what they can to make sure they are renting to quality guests that are going to follow the rules or enforce any rules unless the county steps in...they simply wanted the revenue.

Before you spend too much time figuring out how to find the perfect neighbors (because I'm sorry to say it's likely impossible) I would focus on how you plan on operating your STR so that it creates and builds value for neighborhood and how you plan to make sure that it will not negatively impact their lives.  If every host can or would do that more, then there wouldn't have been any reason for the STR restrictions to have occurred in the first place.

A few things I did along those lines were to personally reach out to each neighbor, introduce myself and my family. Let them know I was running a legal STR and planned to abide by all the rules of the county. I provided my phone number, email and a welcome invitation to contact me with any issues they had. I offered them discounted rates if they had friends and family in town and needed the extra space as well. I even had a mini-housewarming party and invited them all over to build that relationship. From that point on, my neighbors were my eyes and ears on the property, they informed me of guests violations sure, but they also informed me of the little things that friendly neighbors do, which I needed remotely managing, such as packages on steps, or fallen trees, etc. etc.

Anyway, sorry to drag on about this, I just think you might appreciate a different mindset going into this acquisition that might allow you to see more buying opportunities then obstacles.

Best of luck to you!

Dustin Allen · Answer

@Ian Palmer

This is the sign you’re looking for in the county area of South Shore Tahoe.  I just showed a house the other day to a prospective investor and the neighbor on either side had this sign in their yard.  I went and talked to the neighbor who was splitting wood in his yard at the time.  It turns out he is one of a few people that started the whole residents group and it was because of the house we were looking at to purchase.  If you see this sign, you have activists in the neighborhood who will likely find any reason to call in complaints. This particular neighbor pretty much said he would call no matter what you did, his mission is to end vacation rentals.

John made excellent points about speaking to the neighbors where you’re looking to buy. It will take about 30 seconds each to know if you have an activist neighbor. Some other things you can do with your rental are to make sure you don’t have an outdoor hot tub, that is where most noise complaints come drone.  Put a camera on the front of the house that looks at the parking and trash area only, those are the other two most common complaints.  There are also sound devices you can install to know if the noise exceeds a certain level.  The more you can do as an owner to be proactive about avoiding the typical complaints, the better your chances are of avoiding senseless complaints.

Best of luck in your search.

John Underwood · Answer

Neighbors can come and go so I'm not going to worry about what I can't control.

I was the first to start renting ST. Now there are 2 others.

Jon Crosby · Answer

@Ian Palmer  Sounds like you have a good plan then, sorry I didn't mean to come off as if you weren't thinking of the neighbors at all either. ; )

As for avoiding the bad apple neighbors I think the initial due diligence you did with the last house was a good start.  Additionally, you can look at AirDNA and see if you can spot any patterns (or clusters) of less then average reviews and then dig into if the neighbors were the cause listed in the reviews (like you did previously).

Or, use the map to look for neighborhoods that have more rentals than average as the neighbors may already be 'used' to having them there.  The neighborhoods where they are none, could likely be very resentful of the first one that comes in.

I still wouldn't burn too much energy on it though as even your best assessment is likely going to be a rough guess either way.  It would be a shame if that last property was the perfect home and those reviews were strictly created more because of a bad host (which you could have corrected) versus crazy neighbors.

Cheers!

Luke Carl · Answer

@Ian Palmer I’m in vacation only markets. All of my neighbors are doing the same thing I’m doing. I’m just better at it :)

Ian Palmer · Answer

@Jon Crosby Thank you for the detailed response. Ive been lurking on here for a while and follow a lot of your posts since I know you have experience with STRs in Tahoe area.

I definitely didnt mean to come off as if I felt possible neighbors were obstacles and how to get over them. Where ever we do get our rental we plan to have it be on the smaller side to avoid parties and 100% be respectful of the neighborhood we are moving into. We are in Tahoe every weekend during winter time. I see bad tourists up there all the time which is why locals are so against STRs. We dont act like that and we dont want to host people like that. I actually had already thought that giving all neighbors contact info and an introduction is a good idea and the open house warming party is a nice touch. The discounted rates thing I hadnt thought of, I will keep that in mind, I like that.

I guess my main question is how do you know you arent buying next door to someone who, no matter what you do, will be out to get you. You could be the nicest person, host only the best renters and they'll still be looking for every possible way to get you shutdown.

Ian Palmer · Answer

@Dustin Allen

A lot of good advise, thank you for posting that sign as well. Will be on the lookout for that.

Mark Futalan · Answer

@Ian Palmer

Difficult and challenging neighbors can make or break your STR business. It can also be a lot more worries and headaches. When looking for STR’s, privacy and location are really important. You can’t control who your neighbors are but you can be proactive and reach out to them and let them know that you will take care of the property and if there are any issues, you’ll take care of them quickly. Neighbors appreciate that most times. If an existing rental for sale already has issues and complaints, that would be a red flag to me.

How do you vet the neighbors around a potential VHR?

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