Ok short term folks, need advice on a purchase?

Question

So there is a property I’ve been eyeing and we’ve been contemplating doing an AirBnB/Short Term Rental. Primarily we’re looking at the bigger markets, like the Smokies. However I’ve come across a little property close to home that sits near a local lake that I think would make for a decent one. When I say decent it’s cause our area isn’t a tourist destination, but I think I could fix it up and market it to where it could make us decent money from the locals that would look to have a little getaway here and there and it would be someplace fun for me and my family to go that would not be too far away

That being said it’s not like I’m looking for this to break the bank or be a crazy source of good income for me, but if I went the AirBnB route my concern is in doing so what kind of roadblocks may I run into? That being with local cities/governments and rules and regulations? Things of that nature. Like in the description it says subject to the lease with the city?

Just curious of roadblocks or things I should research before really pursuing and possibly placing an offer

Thanks in advance for any and all feedback

Dustin Allen · Answer

@Cory Lucas

Do you have an agent?

I would be asking what the lease is referring to? Is this a situation where you buy the house but lease the land? We have forest service cabins like that in my area and they expressly forbid any commercial activity which includes short term rentals.

Beyond that, you need to know what sort of regulations your city/county might have for short term rentals. You should be able to search the county and city website and find those rules if they have any.

Michael Baum · Answer

Holy wall of text Batman!

Tony Angelos · Answer

@Cory Lucas as someone pointed out, call the zoning department. In Chicago, there is a licensing fee and some alderman have already cut off new applications for the time being.  Another good resource if you're not familiar is AirDNA. It doesn't need to be a huge market to have a profitable STR. AirDNA can give you some insight into what its demand and profitability would be.

John Underwood · Answer

I personally would want it sitting on that lake with a view and a dock to make sure you can get rates and be booked a lot.

Aaron Oetting · Answer

@Cory Lucas I would literally call the local zoning board/city council members and ask about STRs. You don't want to me on the worng side as it will bite you in the end. Also make sure it's not in an HOA or other such. As they almost always eventually turn against STRs

Paul Sandhu · Answer

@Cory Lucas  Is it near Robinson Illinois?  There is a refinery there.  You can make a killing renting to travelling workers (welders, pipefitters, boilermakers and other such ruffians).

Cory Lucas · Answer

@Matt Groth good points and I feel given the right Property, circumstances, and remand it could be. Appreciate the feedback

John Underwood · Answer

Yes, and I have a house on the lake with Dock. It stays slam full!

Michael Baum · Answer

Hey @Cory Lucas, like @Dustin Allen said, I would find out what kind of lease that is. If it said the city, then it most likely isn't a USFS lease. Those are very common in Idaho. You can get a place for a steal, but you never know when that lease will be pulled and the property sold.

Priest Lake in North Idaho had a ton of USFS lease lots right on the lake. Many little cabins up to pretty nice log homes, all on leased land. Almost all of them went up for auction in 2018/2019. I believe lessee's had first right, but a property that was sold in 1980 for 25k and built up to make a nice place was suddenly worth 450k. Alot of people couldn't afford that so out it went.

Just be careful on the lease. A city lease could be anything. Land, septic, etc.

Cory Lucas · Answer

@Dustin Allen cool! That’s kinda what I’m curious of is where do I need to go and find that info out. It’s a pretty small rural town, not sure if the website will provide the insight, but I’ll give it a look. I do have an agent and will see what he can find out on the lease. Thank you

Ok short term folks, need advice on a purchase?

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