All Forum Posts by: Bruce Woodruff

As a high-end contractor in a California beach town, I worked for primarily very wealthy people for many years. I'm talking about the kind of people that buy 10 million dollar houses. In my experience, very few of them were happy.. as a matter of fact most of them were fairly miserable, didn't get along with their spouse or kids, treated workers like they were second class citizens, etc.

A) do not rent to people that only have one review. B) do not rent to anybody on a last-minute basis make it be at least 3 days in advance, C) never rent for only one night, that will be a partier for sure. D) sets your age limit higher, I use 30 years old.

just call your regular insurance company and ask them if they insure short-term rentals. I use State Farm and they were super reasonable, but make sure you tell them exactly what you're using it for.

You're also incorrect about recidivism amongst SOs. It is at 4 out of 10 according to people who would know. @Ken M. was right.

So ok, not 100%, but 40% is waaaaay too much too take a risk on.

https://smart.ojp.gov/sites/g/files/xyckuh231/files/media/do...

Quote from @Erik Epperson:

Quote from @Bruce Woodruff:

Quote from @Erik Epperson:

Quote from @Bruce Woodruff:

@Erik Epperson I know you're looking outside the box to reach your goals and you want to make as much money as possible.....But.....there is a point where it becomes not worth it. You rent to these people knwing their past history and something bad happens, and you will be on the hotseat.

As I understood your first post, you are a fun-seeker, looking to move towards your goal....adding significant risk like this may/may not help you move faster, but the downside is the risk.

Chasing the almighty dollar as a primary course of action is usually a not-smart move....take it easy, take it slow and chase fun.

 I do not believe a landlord would be held liable for something a renter does would they?

Yes, Look it up. If you knowingly rent to a S.O. and you have a minor or couple with child, or woman, and the S.O. attacks or exposes to these other tenants.....yep, you will be in court and probably worse....

TBH this whole 'room rental' thing that you're on is risky...possibly lucrative, but not that great really....and a lot of risk. MAybe rent an entire house...but room rental? People living with one of these guys? And you have to/should  disclose this to the other renters if you're a decent person. IMO, you're just asking for trouble....but you do you. I like my life nice and simple..and profitable.

I would just go with a STR if you want big bucks. 2-5 times the profit of a LTR.

 No if I rented to SOs it would only be them. But I didn't know anything about liabilities.  There are huge success stories with rent by the room. Look it up on youtube from bigger pockets.

what is STR?

"There are huge success stories with rent by the room"

I don't care. There are better ways to measure success than by the almighty dollar. There have been plenty of threads on this forum over the years about the problems that come with RBTR. Look them up.

STR stands for 'Short Term Rental' such as VRBO. They are relatively safe and secure gold mines with out the inherent risk(s) you are trying to get into with your plan.

But you have to do you. Just be smart.

Quote from @Erik Epperson:

Quote from @Bruce Woodruff:

@Erik Epperson I know you're looking outside the box to reach your goals and you want to make as much money as possible.....But.....there is a point where it becomes not worth it. You rent to these people knwing their past history and something bad happens, and you will be on the hotseat.

As I understood your first post, you are a fun-seeker, looking to move towards your goal....adding significant risk like this may/may not help you move faster, but the downside is the risk.

Chasing the almighty dollar as a primary course of action is usually a not-smart move....take it easy, take it slow and chase fun.

 I do not believe a landlord would be held liable for something a renter does would they?

Yes, Look it up. If you knowingly rent to a S.O. and you have a minor or couple with child, or woman, and the S.O. attacks or exposes to these other tenants.....yep, you will be in court and probably worse....

TBH this whole 'room rental' thing that you're on is risky...possibly lucrative, but not that great really....and a lot of risk. MAybe rent an entire house...but room rental? People living with one of these guys? And you have to/should  disclose this to the other renters if you're a decent person. IMO, you're just asking for trouble....but you do you. I like my life nice and simple..and profitable.

I would just go with a STR if you want big bucks. 2-5 times the profit of a LTR.

I worked in a very high-end Cali beach town for years.....Mini-splits became the 'cool and groovy' thing about two decades ago. Some people want them just because of the percieved environmental advantages. 

But they are much more efficient as @Matthew Becker said. If you're not using the west side of your house, turn them off (or way down). One of the family likes their room cooler at night, boom, easy to do. And you can run several units off a single compressor (depending on the BTUs).

And with the price points way down, plus the ease of installation, they are pretty much a no-brainer nowadays IMHO. OF course, they are all-electric if that factors into things for you ...I.E. if electricty is really pricey in your area...or if the power grid shut down, or.....?

I am far from an environmentalist kinda guy, but just based on my construction/Contractor mindset, they make a lot of sense in any house, especialliy those where the ductwork is old or smaller sized, or you need to build chases for the ducting. And the cost has come down to level the playing field. They just make sense....

@Erik Epperson I know you're looking outside the box to reach your goals and you want to make as much money as possible.....But.....there is a point where it becomes not worth it. You rent to these people knwing their past history and something bad happens, and you will be on the hotseat.

As I understood your first post, you are a fun-seeker, looking to move towards your goal....adding significant risk like this may/may not help you move faster, but the downside is the risk.

Chasing the almighty dollar as a primary course of action is usually a not-smart move....take it easy, take it slow and chase fun.

You can get paid for the materials, but usually not your personal labor.....

Quote from @John Underwood:

Quote from @Selina Giarla:

I have been in long term rentals for about 15 years. I am looking into purchasing a STR/vacation property as another rental income business line to diversify and need to understand the underwriting. I am looking for suggestions on either underwriting software and/or excel templates for this type of underwriting. I don't know the average occupancy, ADR, etc. for this region so a software that is pretty good at predicting that would be helpful.

Also, for obtaining debt, do lenders price this as more risky? How are the loan terms typically written for this purchase and how have you fared in terms of the rate/length of loan, etc.?

 Software is only so good at predicting these things. You are better off manually looking at the potential competition on VRBO and Airbnb to get your best numbers.

STR spreadsheets have already been shared on here and you can search and find them.

Yep, John and I always agree on this one. Only you know all of the details of your situation. So you should create your own spreadsheet rather than count on a random algorithm to sort things out......think about it - do you want to trust an algorithm with your financial future? Or use your own brainpower and actual facts, not assumptions based on other transactions?

I would even go one further and suggest creating your very own Excel spreadsheet rather than rely on one that someone else created for their circumstances. Look on the various platforms and use the real-world numbers of occupancy and rates...

Aside from the above, you gotta realize that they are in a bad space mentally. That can cause a desire to just get the H*** out (which can mean a deal for you), or they can decide to stay and haggle to get more money. There will (usually) be a distinct lack of usual communication....