All Forum Posts by: Danette C.

@Alex Silang definitely look at the HOA bylaws and what they cover. All of our cabins we used to own in MO, were considered condos. The HOA was responsible for the roofs, exterior issues like squirrels creating holes in the logs, snow removal on roadways within the resort, trash collection and trimming trees throughout the resort. Everything inside was our problem: HVAC, plumbing, electrical etc.

Now we own long term rentals that are townhomes or condos. All have some sort of HOA. Some cover roof, some don't. All cover snow removal and simple landscaping outside. Again, inside is ours to deal with.

with that being said regarding our nightly rental cabins vs long term rentals...less upkeep with long term. I feel reason being that LT renters treat it more like a home versus a nightly renter treating it like a hotel. Doing regular maintenance on HVAC, etc helps keep headaches to a minimum for your rental.

@Brian Plajer I have found that reaching out to your current lender, RE broker, RE agent and others who know you're an investor can be beneficial. Let these people who you're in contact with know that you are interested in investing in other projects. They might know someone like minded and connect you both. Attend REIA meetings and other business networking meetings. It might take a bit of work and time, but you'll find the right person. Build relationships and trust.

Richard, I know it's a lot to ask, but if by any chance there's a power point presentation,  can you post it somewhere? Texas is far from home, but I would love to hear what we need to be on the lookout for.

Thanks, Danette

Kirsy,

You've got this. Don't feel discouraged or overwhelmed.  We have all been in your shoes at some point.  I can humor you with our current situation. As my husband and I learn different topics on this forum, books and youtube, we get inspired/excited and have a rough draft business plan as we keep modifying it. 

Kirsy, I suggest you do a personal assessment of what your goals are. Everyone is different in regards to 1year, 3 year, 5 year and 10 year goals. You will see that there are so many possibilities. I agree with both Jonathan and Cody in regards to how you decide to approach it. Definitely read. Watch Bigger Pocket podcasts that can be found on YouTube as well as individual investors giving their insights/personal experiences/mistakes/etc. BP podcasts have some amazing people speaking and recommending books they've read. Attend REIA meetings in your area. Don't be surprised, too, that after your research, readings, and connections you make you may change your goals. That's a good thing because you are learning what you really want.

@Nathan Gesner LOL, you are correct. Short term was obviously better for yearly net income.  Keep in mind properties:  one 3 bdrm, four 2 bdrms and two 1 bdrm cabins.  Net income for each was anywhere between $17k-$37k.  Like I mentioned, we had renovated certain properties soaking $10-17k into the 2 bdrms to get them where we wanted them to be better than our competition and not have disrespectful people in the properties. We had certain expectations and did extra things for guests and that's why we got so many referrals and repeat guests. So knowing that Thomas sounds nervous about the quality he will get from a property management company, he may want to try on his own first, but have the backup plan ready just in case. And definitely watch out for restrictions! Many townships are getting strict about nightly rentals and making it very difficult for short term rentals. The STRs reaching out to him can definitely help him better than VRBO, Airbnb and Turnkey.

If someone is starting with one property, they should give it a try on their own as long as theyve jumped through all the hoops, got strong resources,  etc. Can't hurt and also a good way to learn what you do and don't like and what you can and can't handle. VRBO and Airbnb make it easy to advertise at 3% per booking (Airbnb specifically, VRBO is doing so many weird charges nowadays) versus 40+%. Now if Thomas starts purchasing more nightly rentals and can't handle it, then yes, get someone to manage it.  Actually ask realtors in the area for local rental companies. One of the people I sold a 2 bdrm to ended up buying our 3bdrm as well asked for some guidance and advice.  By no means am I an expert but I offered him encouragement and resources to help him get started. He had the 2 bdrm managed by a company that gets 40% and he chose to manage the 3bdrm himself.  Asking for his input since I can only speak from self managed and as he texted back, he is now managing 3 properties on his own and is so much more happy to see the money in his pocket.  Again, I'm not saying managing yourself is easy as it can be time consuming and frustrating.  I'm a strong believer in giving things a try and obviously get as much guidance/advice/etc from others to help make yourself successful.

 It was a blessing when we sold 3 properties right before the shut down occurred (total coincidence as I had been in negotiations with the person since November 2019); that was a stressful frustrating experience of having half a year with no income and still paying the bills.  So as we moved over to long term, I actually spoke with my realtor who helped me with the two townhomes near the university.  She gave me helpful hints and docs to finding good tenants which has been working out very well so far.  Net is totally different for long term especially since the properties are all townhomes.  I made sure they're in the perfect location of short drive to the hospital or university.  I just stick to the 1% rule so I make sure the rent is at least 1+% of purchase price. So with our current six townhomes (seventh closing in Aug), I can't even mention/think net yet as it has barely been a year for some of them and some needed a little TLC or new appliances.  Our goal on the conservative side is to net $6-9k  per property for the next couple of years as we will see more principle be paid after big chunk of interest is paid off. 

And this is why we have started to think "bigger".  We are wanting to find like minded people, read as much as we can, watch videos and make connections for bigger projects.  We have been thinking small scale for too long, not realizing how much potential is out there.  So much to learn....

Thomas:

No experience with them, however....I did look them up.  They're fairly new.  I only see 6 rentals in the area we used to manage ours.  So, you may want to investigate other management companies as well.  Look through your area on their site; see how many listings there are on different dates throughout the year.  I know VRBO/AirBnB have an abundance for the area we had our properties and yes overwhelming but obviously very popular sites for travelers to go to.  Having used both personally for advertising and booking own reservations across the US and not knowing about Turnkey until you mentioned it, I am not sure what costs are but you might want to look at evolve which has been around a little bit longer.  You want to make sure you are seen and being on popular sites is helpful.  Read the reviews from both sides:  https://www.trustpilot.com/rev...

Okay this is going to be long, but hopefully helpful.  So we started nightly rentals in MO back in 2011. We renovated our properties so they were on the higher quality end and had looked at property rental companies, but couldn't justify handing 40% over to them.  So what started with one cabin on VRBO, became 7 properties on our own website with a reservations system over a couple of years. We lived 40 min from the properties from 2011-2014.  I was extremely anal; often having issues of "letting go" and things weren't going to be exactly the way I want them whether it was how the toilet paper was folded decoratively or a welcome sign with guests' names and snacks laid out in the goody box.  It took awhile to find good housekeeping staff and knowing there are going to be mistakes made.  I went through 3 HVAC guys before I found a really reliable one.  Same with handymen; finally finding a good one that was always on top of things.  I was very fortunate to have been involved in BNI group and everyone had referrals as well as my RE agent who had a list of references as well.  So while living nearby, I was able to get people in place as well as have back ups in emergency situations.

We then moved out East in 2014.  I managed the properties as well as a couple of other owners' properties until this current year.  I made a point to travel out to MO every 3-4 months to do "surprise inspections" and go through make sure everything is still up to my standards.  Sometimes, I would have friends stay at a unit and check things out for me and let me know about any concerns/issues.  

So here are pros and cons of managing yourself.

Pros:  you keep all profits (except 3% to credit card company), get to know guests, create a rapport with regular guests, make it personalized and memorable for your guests (my housekeeping staff was great and would leave flowers for anniversaries and balloons for bdays)

Cons: Phone calls late at night sometimes, dealing with guests who are nasty and ignore your rules (ie no pets/no smoking, but it's nice having damage waiver in place), trial and error finding right housekeeping/maintenance/HVAC/plumbing people.

Going with a property management company pros and cons:

Pros:  they deal with all the issues and reservations calls

Cons: they may not be as attentive to your property as you would be and don't follow through with rules of no pets/no smoking. They charge between 20-40% except for companies like evolve (charge 10% I believe), which I don't fully understand.

So, can you do it?  ABSOLUTELY!  Just know what your limitations are and if you want to have contact with guests.  You can also hand it over to a management company, but do your research before just picking anyone. Ask the management company for some references and make sure to ask the references about topics that are important to you.   I would suggest you give it a try on your own for a year.  Experience the holidays and summer and see if it is a good fit for you.  If it's not a good fit, you'll probably know within 6 months.  So do legwork now to have a backup plan in place should you find that managing on your own is giving you a headache.

I can count maybe seven times out of ten years, I questioned myself managing nightly rentals. I honestly loved it. We had amazing guests who were with us for all ten years. We had a handful of guests who got fined for smoking or pets or somehow managed to break the bathroom sink vanity. So why did we get out of nightly rentals? Well, I felt it was time for a change. I noticed the resorts weren't keeping up the property grounds as well, there was talk of indoor waterpark, and clientele was really changing in the area. Indoor waterpark most likely will increase the HOA/COA fees.

So with that being said, we moved over to LT rentals near the hospital and university.  I am still itching for a nightly rental in our area but considering where we are, there are a lot of properties not able to be nightly rentals because the township is trying to keep them out.  

Sorry so long winded and probably off topic at certain points.  Just know you can do it yourself. Give it a try.  Don't like it, then go with a management company.  However, be ready to "let go" as it won't always be up to your expectations.  This is an investment.  Yes, you might go down and stay once in awhile, but you are handing it over to be cared for by someone else.  Have a number in mind that you want to have in your pocket every month/year & ask the management company to show you comps of similar properties and the profit the owner walked away with after fees/expenses/etc.  Know what you are willing to "let go" of and I say that because one of my owners ended up selling because she really had a hard time letting go of the fact that guests/strangers were sleeping/having sex in the beds.  People will leave lights on, crank the AC and even freeze it, etc...you learn ways to control that, but be ready to work through some of those things.  It's always hard in the beginning, but once you know what you can and can't handle, it'll fall into place.