All Forum Posts by: Andrea Townsley

Guess I’m in the minority but I just read the “group of ladies” thread and now this one...excuse me while I go throw up. 

 I have to agree. We were looking into it ourselves and the cash flow isn’t as great as people claim...unless they are expecting 100% occupancy, no cap ex, and no or very low mortgage payments. It’s certainly better than LTR for cash flow even with my conservative numbers, but not sure it’s worth the extra hassle and hands-on management.

Here in Florida, I discovered that anything under 6 months falls under the Division of Hotels and is regulated as such, and from what I can tell, STR owners are largely non-complaint with these regs, lodging taxes, even registering with the state as a landlord! (I personally think the state is going overboard but I also won't operate outside the law, which adds to my headaches and my costs and makes it hard to compete).

So many municipalities are looking into ways to deter people from doing it. Our state passed a law that municipalities are not allowed to prohibit or put certain limits on STRs so cities are getting creative. HOAs and condos are also a crapshoot since they can change their bylaws at any time. 

To me, in Florida, there are too many unknowns (and knowns typically ignored by others), coupled with my personal estimates being conservative as far as occupancy %, and we would need an 80% loan, so it’s not happening for us, and I fear you’re right about too many people jumping in to the point where we see a hard reset of some sort. I also think we will see a lot of failures and conversions to LTRs or even selloffs based on the factors listed above. 

Please do not use chemical smells to “freshen.” When I smell these, I automatically wonder what odors are trying to be covered up. 

Moreover, an increasing number of people are becoming sensitive to chemical smells, myself included, so I have had to switch to unscented everything. If I entered a place with a strong chemical smell, I get a migraine and frankly it would likely ruin my expensive vacation and you would get a bad review. I would need to be able to remove the source (plug-in or what have you) and air the place out, although it’s not always that easy (carpet cleaning products and dryer sheets tend to be the most problematic for me as they linger).

I always travel with young children as well and do not want to expose them to that. 

Just my 2 cents...avoid adding artificial smells. 

@Michael Henry

I can understand why they wouldn’t spring repair talk on you before you are actually the owner. Those two things don’t sound unreasonable although I’m guessing there’s more where that came from. If there are some things the previous landlord promised but didn’t deliver on, and you don’t fix them or make them satisfied with why you will choose not to fix them, I would expect to lose them as tenants. The other landlord has left a sour taste in their mouth which will transfer to you now.

The real question is, how do you feel about losing them and having to replace them?

One time (15 years ago?), I rented a place with a friend and her boyfriend. Like a month later, on New Year’s Eve, they got into a drunken shouting match that ended with him pushing her down the stairs. Thankfully he left, and also thankfully, the PM let him off the lease.

Fast forward a year and my “friend” had a new boyfriend who was a creeper. I decided to leave but this time they wouldn’t let us change the lease. I paid four months after I moved out to finish our six-month renewal we had signed. She let the guy move in without the PM knowing and I still had to help pay the rent and other bills. The two of them wrecked the place and had cats peeing all over and we had a huge claim against our security deposit (plus some), which I chose not to pay and detailed why I shouldn’t be responsible so I believe they went after her since they knew I had left already but was trying to do the right thing and still pay my half of the bills.

Moral of the story: Every situation is unique. Do what is right for that situation. You don’t know why it’s not working out for this particular roommate, and she hasn’t been there long, so as long as the other two can qualify and are amenable to removing the third roommate from the lease, I see no reason to not accommodate that. Maybe charge a lease change fee due to the paperwork and time.

Buyer-Broker Agreements are not standard in every market. They’re not that common in mine, for example. If an agent is giving that contract to a buyer client, it’s supposed to be given upon commencing the relationship, not upon making an offer on a property, mixed in with other paperwork. Likewise, if this is the listing agent, she can’t represent him in a single agency relationship if she is already representing the seller. (All the above applies in my state - different states have different laws and customs so it’s worth familiarizing yourself with the law in your state, at the very least.) Either way, representation isn’t supposed to be agreed to on the sly, so that is just one reason I do think this agent is shady.

In my state, seller's disclosures are usually right on the listing in the MLS so I always take a peek at them when vetting a property for a customer. I would advise them not to make an offer till we get them (they are required in this state but sometimes it doesn't happen bc the seller refuses) but if it's a rehab project that is in obviously terrible shape, we already sort of know what they're getting into. The extent of it will be discovered on inspection.

Next time ask for the disclosures before you make an offer. Here I have seen major items such as leaking pools and foundation problems so as an agent I can inform my buyers of what I know and they can make an informed choice. Anything less is unethical IMO.

Never go to the listing agent bc that person works for the seller and already has a relationship. The agency relationship can be changed if the parties agree so the agent then represents the transaction instead of one side or the other. But it sounds like this agent is jerking you around and I do feel there is way too much shady business going on. Unless instructed to do so, an agent is legally required to present all offers in a timely fashion. Makes no difference if there is another offer expected to come in, time is of the essence (in my state) and having two offers on the table at once is a great thing for sellers.

Personally unless you are hard pressed to find other deals, I would walk away from this one and also from this agent. Read the contract you signed word for word and figure out how you can fire her. THEN (and only then) find yourself an investor-friendly buyer’s agent who represents YOU.

It’s possible to over-improve also. Even in a high end area.

The nicest neighborhood can be hard to comp correctly since...it’s the nicest neighborhood. Add in being a MF and that makes it even more difficult.

I would investigate why the age is not accurate. But I don’t think that matters that much since homes ~100 years old have a certain charm you can’t get anymore and they can go for more than you’d think just based on age alone, assuming they’ve been kept up or updated.

An appraisal is an opinion of value, same as your Realtor's. And it's a snapshot in time, not an ongoing reflection of value that will last for years. It is based on market conditions so if you have an opinion of value from 6 months ago and your local market tanked in that time, that will certainly change your ARV. I'm not saying that's what happened here, but it could factor in.

This is normal for my area as I live in a college town. Where my rental is, it’s not typical (45 min south of here).

One time I had a tenant with bad credit but a stable and good paying job. I told him we would work with that and ask for last month’s rent up front. He was fine with it and has been a good tenant for two years now. He’s been late a few times but always contacted me to let me know and paid the late fee without complaint. They keep the house up nicely and don’t make a lot of maintenance requests.

I try to be understanding of each person’s situation and make things work if I think they will be a good tenant. If you really would prefer to get the last month’s rent, maybe split it so she can pay that with her second month’s rent instead of right now with first and deposit. Or you could forgo it altogether. Or you could choose another applicant. You’re in charge.

@Brigham Lewis

My belief is that college is virtually useless unless you’re going into something like medicine, technology (debatable), engineering or architecture, accounting, that kind of thing, or if your end goal requires an advanced degree (my degree is in psychology bc I wanted to do counseling, which requires at least a masters - I had kids and never went back, and got into real estate instead).

I hope none of my kids want to go to college bc there are so many other ways to make a buck without that debt and the amount of indoctrination that goes on at colleges.

You can get your real estate license if you want to connect buyers and sellers, you could seek out a mentor doing what you want to eventually do, you could work with a property management company or as a leasing agent depending on your state’s laws. Any of those are a good first stepping stone to learning more.

College is always available if you change your mind down the road.