All Forum Posts by: Caroline C.

@Dillon Dinglasan the rules are all across the board. You have to read the condo bylaws carefully. And keep in mind that the rules could change in the future if voted by homeowners.

We are not actively making new investments, but in the past we've done SFH, duplex, and condos. Our most recent purchase was a condo in Costa Rica, which we rent on AirBNB, and it's doing great.

Condos can be a good investment, but you have to be careful. Be sure to review their financials to see if they have cash reserves in place, prior board meeting minutes to see what sorts of issues come up, and see how many assessments they've had in last few years. As you stated, you'll be paying monthly HOA fees, which can eat up your cash flow, but also potentially additional assessments from time to time.

Also, the HOA may have rules against short term rental, or change their rules in the future. Some can be restrictive to long term rentals too. As an example, we once purchased a condo in another city with a renter put in place by prior owner - prior owner had permission to rent but HOA had restriction that only 50% of units could be rentals. Once tenant moved out less than a year later, HOA did not allow us to rent it again because of the limitation, as old owner had permission and we did not. We had to go to the back of the waiting list of owners wanting to rent. We ended up selling the unit.

10% is pretty standard, and reasonable for them to have withheld it from you, but if you don't have a signed agreement, you can still negotiate with them to lower the rate going forward. Or simply find another PM and switch - starting into managing a unit without an agreement is simply bad business on their part and a red flag that they don't really have their act together. 

Also if you do sign an agreement with them, make sure it has a provision for you to cancel with 30 days notice.

@Andrew Taylor As @Mike V. says, the thing about the smaller units is that there are many more of them on the STR platforms, so there is a lot of competition. But if you have a nice unit that shows well in photos and has good reviews, you'll tend for them to be rented consistently, and if you can have 4 small places consistently rented, I think you'll make more money than 1 large place consistently rented.

But there are so many other factors. For me, my 2 small rentals are in apartment complexes without a lot of maintenance besides HOA and cleaning and utilities, but my nice rental (that gets 3x the nightly rate of the small ones) is a big house with a pool and has very high monthly costs, and more things that break down over time, so my expenses on the big rental are much higher than I would have thought.

So, the problem with my big place are my ongoing expenses are higher than I thought, and the problem with my smaller places is that there is a lot of competition to keep them consistently rented.  There is no formula.  

You will probably do fine either way, it may be more of what you are comfortable with.  If you are self managing, perhaps the 1 bigger place is best so you aren't dealing with multiple guests and check-in / out on the same day.  Also check out AirDNA or similar for a 1-month subscription.  You can drill into things like by bedroom in a market what is the filled/vs vacancy rate, etc.

Definitely reason to pause, but if the inspection says there is no mold and that the floor and walls/ceiling are dry (this is important that the walls/ceiling are dry), then it may very well be an old problem.  Is there some sort of indication that the windows are new or that the flashing around the windows is new? 

But given that the old damage to the floor is still visible (is it minor, or it is bad/obvious?), that is a bad sign - a real turn-key renovation would have addressed it by at least sanding or refinishing the floors.  

Also, any good turnkey provider will address any issues found in the inspection, so ask them to fix it.  For the turnkeys I've purchased, the provider always fixed things that surfaced in the inspection with very little argument.

Keep in mind also that inspections will turn up many things and sometimes make them sound worse than they are. Do you have photos of the water damage on the floor? Perhaps it is minor or a limited spot, and no big deal? But if it is obvious, then TK provider must fix it before you close.

@Jared Lichtin I wasn't looking for advice. Maybe you meant to tag OP? 

@Marc P. If Jax is your area of focus, I'd definitely recommend joining JaxREIM on meetup (more of a marketplace where wholesalers and investors message each other) and also check out the JaxREIA website - that is more of a traditional REIA with regular local meetings and education - and time a visit to JAX around one of their meetings.

Welcome to BP!

JAX is a great place to be.  We've been investing there a few years and love it and intend to make the move there after our younger one goes to college next fall.  We spent the week there last week to experience the HOT time of the year a bit. Summer can be rough, but the rest of the year is beautiful.  And so many endless and empty (compared to northeast) beaches...

Temporal House Hack has its merits and I'm partially moving in that direction with recent AirBNB purchases in Costa Rica. In high seasons they rent often, but in low seasons they stay pretty empty, so living in it while it is not going to be used anyway can be a great use of the asset.  We intend to do this to a certain extent with our place. 

Central America locations are great because of similar time zone to US vs other overseas locations, and can be more affordable than common US vacation locations.

If you can find 2 locations with opposite high/low seasons, you can move from one to the other along with the seasons!

@Joel Fine We found our property managers through the realtor and lawyer we used to purchase the properties, but perhaps for us it was easier because our properties are in a common vacation area with lots of VR properties. Not sure if that is the case for you, but your realtor might have someone in their network who knows people who manage short term rentals. 

Also ask your personal network (even personal professional: ie: post on Linked In) if anyone who knows people in Cleveland and reach out to those people, because a referral can definitely come from a friend of a friend and through people not in real estate at all.

I was going to say exactly what you posted subsequently - peruse AirBNB listings, click into some of the owner or property manager profiles near your properties and message them on the platform for suggestions.

You will want to have someone in place at the start because because you'll immediately need to furnish as well as get the listing quickly up on the VR platforms and a good property manager will do all that for you.

Good luck!