All Forum Posts by: Brian Hood

I love the BRRRR approach, but why isn't anyone factoring in their time into their ROI? Even if you have $0 in the deal, you may still have dozens of hours (or more) invested into finding the deal, buying the property, managing the rehab, finding the tenant (or vetting a property manager), and getting the REFI.

Has anyone here actually included their time as a line item when it comes to the BRRRR deals? Especially those who make a high $$$ per hour with their business. I'd be curious how the numbers look for some people once that is included.

Glad to see this project back on track! 

if you want the absolute best, this is my suggestion. 

https://www.maidcleaningnashville.com

It's definitely not the cheapest, but I use them to deep clean my vacation rental every month and they're fantastic every time. I've tried several different options around Nashville and this is the only one that hasn't cut corners on me. 

I run something very similar downtown, and have seen similar numbers (although a higher gross yearly income).  The bachelor/bachelorette thing is an absolute goldmine in Nashville. 

One thing you're going to need to factor in is income tax on all of your profit. This is not the same as a traditional rental property. The profit for this is going to be taxed similar to any other self-employed person. 

Also, if the market shifts, and it no longer makes sense as a vacation rental, make sure you have an exit strategy in place. With those numbers, it doesn't make sense as a traditional rental (at least with current market rents). 

Just keep that in mind when making your decisions! 

 I got a chance to toy with that calculator, and I think there are a few things that are missing (assuming you're trying to calculate the benefit of vacation rental vs traditional rental)

• Gross long-term rent: One of the main things I would want to know is how much more I could get for my property for renting it as a vacation rental vs with a traditional long-term tenant. I would most certainly factor this number into my calculations when doing the math.
• Water/utilities/cable/internet: For a SFH, this is something you would be paying for on a short term rental, when you wouldn't be with a long term tenant
• Insurance costs: Getting the correct insurance to cover vacation rentals can sometimes be quite a bit more than traditional landlord insurance
• Property management: If you're paying someone to manage your vacation rental, it's going to be a higher % than a traditional property manager, and there are very few to choose from, depending on which city you're located. 

So if you subtract those items from the gross yearly income of your vacation rental (along with the other things in that calculator), it would give you a more accurate picture of the true ROI of vacation rental vs traditional rental.

I'm sure I'm missing some additional things, but these are just things that came up off the top of my head. 

 This is what Nashville, Austin, New Orleans, and a few other cities have seemed to pass regulations for; specifically to start collecting hotel tax. 

The issue these cities seem to be running across is that some people aren't able to get permits for one reason or another. Nashville, for example, limits (to an extremely strict degree) the number of Airbnb permits they'll give out (per census tract) to investor-owned properties.

This limit has seemed to keep people from bothering to get permits, thus skipping out on taxes anyways. 

 I'm not sure about the new ban in Danville CA, but most cities with similar regulations specifically exclude traditional B&Bs and motels.

This is why I've yet to pull the trigger on making a real estate investment for the sole purpose of vacation rentals. I don't like the idea of one regulation change completely cutting off my cashflow.

I've seen tons of great houses where the numbers easily make sense on paper (even in Nashville's inflated market), but the numbers won't make sense if I have to switch to a normal tenant due to a vacation rental ban. 

That being said, there is a similar ban in New York City, and you see how effective that's been...(not)