All Forum Posts by: Bonnie Low

Quote from @Nwakaego O.:

Can you deposit checks with Baselane?

Yes, you can. It's a full service banking platform - just like you'd have at any other bank with interest bearing accounts, the ability to set up multiple accounts and sub-accounts, issue virtual credit cards and more. 

Quote from @Adam Tyer:

Hi Everyone!

I'm relatively new in my STR/MTR journey (but have extensive LTR property management and investing experience). For anyone who is in the STR industry, what would you say is your biggest obstacle to success?

A few areas I've heard are challenges are finding cleaners, increased regulation, and over saturation of the markets… STR managers and owners would you say that one of these is the caseu or something else?

All of these things can be challenges for sure, but it's also very location specific and market specific. I think most people wanting to break into investing are finding the current interest rate environment very challenging, but there's no reason not to use creative financing. Some markets are saturated, but it should be very easy to determine that and focus elsewhere. Hiring the right team members is always challenging, as is keeping them (lots of turnover). I think one of the biggest challenges or risks is the over-dependence most of us have on the OTAs. As Mark Simpson says, you're building your house on someone else's land. Driving traffic to your direct booking site, if you have one, can definitely be a challenge but I personally believe it's becoming more important all the time, particularly for STR.

Most cities have REIA groups for local investors to network. As more and more investors are focused on MTR and STR you're likely to find them at these meetings. I always find REIA meetings great for networking with local lenders, contractors, property managers and other like minded investors who are usually willing to share referrals.

Quote from @Brent Bagen:

I am struggling to choose the right app for me. I know that bigger pockets kind of promotes rentredi. But I seem to read a lot of negative reviews from tenants and it is concerning. Is it really the best app for me to go with? Turbo tenant sounded pretty good, but it doesn't have nearly as many downloads either.

I use Baselane. What I really like about it is that it's a banking and bookkeeping platform that also allows me to manage my tenants. I'm a big fan of streamlining and I just really appreciate that everything is in one place now. I can quickly create bank accounts for each property, the categories for tagging your transactions align perfectly with your Schedule E for taxes and I can do all of my tenant related functions like tenant vetting, lease creation and collecting deposits and rents. And it's free, so that's a huge plus!

No, it isn't. First, if it's priced right no one will care. Second, it would be very easy to either paint that rock to tone it down a bit or place a container plant in front of the wider section of gray rock to camouflage it slightly. Otherwise, it's a really attractive property!

Do you have an option to attend this meeting virtually? I love Bend and am an active MTR owner. 

Austin is a very popular place for MTR but, as such, it is also very crowded. Before you make your decision, check  Furnished Finder to see what the competition looks like and how many have wide open calendars to get a sense of supply & demand. This will also tell you where the bar is set by your competition because that ultimately will tell you what kind of furnishings and amendments you'll need in order to be competitive. A good rule of thumb is to plan on spending approx $10k on all the standard items for your unit like your washer & dryer, linens, small appliances, dishware & cookware etc., plus $2-3k per bedroom. And don't forget to equip your outdoor space if you have one because that is a major draw. 

All that said...if you're not confident you can get at least 1.5x your LT rents as an MTR, I think I might go with long term but skip the management company and DIY. 

Quote from @Allen Duan:

Quote from @Bonnie Low:

Quote from @Allen Duan:

Second for Waivo. They have different amounts of coverage and charge you per booking. MTR bookings are charged by the month, while STR bookings are one fee per booking. We charge tenants a fixed amount that covers the average length of our bookings.

I also considered Safely, but they're pricing becomes very expensive for MTRs

 So is Waivo more of an aircover-like insurance options rather than property insurance? I don't use Airbnb for MTR so I don't have Aircover as an option.

 Correct. It does not replace the need for property insurance. It's more of a replacement for the security deposit as they only cover guest damages with some specific stipulations. We chose to use a service like this so we don't have to track and refund deposits, which is very frequent for us managing so many MTRs. So it's more of an operational benefit than just financial.

 You're using Waivo in lieu of collecting security deposits from your guests? Interesting.

Quote from @Michael M.:

Quote from @Bonnie Low:

Quote from @Michael M.:

Hello, I’m considering turning my primary residence into a rental and moving out of state. It’s a 3000 sf 5 bed 3.5 bath new build (2022) with really nice finishes. We bought at the peak of the market in 22, and can’t stomach the loss in equity + paying an agent to sell. Our plan is to hold the house 5 years + until the market comes back, or possibly just holding it long term. 

I'm considering either the STR or LTR strategy, but haven't quite decided which would be better / less of a headache.

Mortgage is roughly 3250 and I think we could rent for 3450 to 3600. Not sure on how much I could airbnb it. We're located in Buda which is a bit outside of Austin, but still only about 20 mins from downtown, so I think there's still good STR possibilities.

Im curious if anyone has any advice or things to keep in mind when doing something like this as it will be our first rental. Curious if anyone here has gone through something similar and could share their thoughts / advice. 

You're not going to cash flow as a LTR if you use a property management company. There's not enough spread between your mortgage and the LTR rates to leave much of anything after they take their cut. Are you prepared to self manage? If so, it's definitely doable but, again, it won't be cash flowing much and maybe you're ok with that. You're in a great area that will always be popular. I think Austin is pretty restrictive on STR regulations but that might not apply in your area. Use a tool like STR Insights to analyze STR potential in your area. Your property may have potential as an MTR. There's potentially a use case as an insurance placement as this is the type of home that can bring high dollar insurance contracts if done right. 

Hey Bonnie, where would you start looking to learn more about MTR? I haven't thought of that as a possibility.

And agreed, property management is out of the question. 

 A good place to start is to read the book 30 Day Stay by Sarah D Weaver and Zeona McIntyre. They've done a good job of describing the market and providing start up information. There are also some podcasts dedicated to midterm rentals which are helpful because they tend to profile people doing all kinds of different things with their MTRs so you get expose to a lot of possibilities. I like the WIIRE podcast - earlier episodes are primarily about MTRs although the hosts also provide a good deal of content relative to operating a successful real estate business. Furnished Finder has a podcast they sponsor called the Landlord Diaries so you might check there as well. I also co-host a weekly virtual meetup with my colleague Jamie Banks that you might find helpful called The MTR Connect. We have people who are just exploring MTRs as well as experienced MTR hosts with larger portfolios and years of experience so it's a good mix of levels. Let me know if you're interested and I can send you our application.

Although you live in one of the units, you are treating the other like a business presumably and will be reporting income and expenses for tax purposes so you really should have a separate bank account. And especially if you're going to create an LLC. In order for the LLC to protect your assets as intended, you'll absolutely need to keep business and personal expenses separate.