All Forum Posts by: Dan Johnson

Can I hold an open house for a long term rental? I know you can hold an open house when selling a house. Just wondering if there's any rules against having an open house for a long term rental property in order to find a tenant.

@John Carbone You do what works best for you. I've exchanged phone numbers with a neighbor and it was very helpful. The neighbors loved us because we transformed a run-down dump of a place with problem tenants into a beautiful, successful short term rental. The neighbors did not abuse my phone number. The neighbors were helpful to keep an eye on the property when I was out of town. The neighbors loved it when I turned it into a short term rental with high quality tenants instead of the problem long term tenants that occupied the house before I came along.

I wouldn't sweat it too much. It's your property and you are the boss of it. Not your neighbors. I'd probably wait until right before the first guest arrives. Tell the neighbor that that you qualify and vet your guests. Exchange phone numbers with your neighbors.

Hey @Thomas Waymouth I've used a hard money loan to acquire a house in Arkansas. The house was a fixer upper and I remodeled it. I did not use it for STR.

It shouldn't matter to the hard money lender whether or not you intend to use the house as an STR. Just as long as it is a fixer upper and you plan to remodel it- that's all that should matter to the hard money lender.

As @Luke Carl mentioned, just make sure to get out of the hard money loan as quickly as possible. Refinance it into a DSCR loan or a 30 yr fixed loan with a bank.

I'll PM you the contact info for the hard money lender I used.

Asheville is strict on short term rentals.  New short term rentals are not allowed in city limits. The currently operating short term rentals within city limits have been grandfathered in.

Your best bet is to look at the surrounding areas. STR's have been doing quite well in the surrounding areas.

Go onto Air bnb or VRBO websites as if you are the guest and you are wanting to book a stay. Do this for each city. Look at the top 10-12 properties in each city. Get an idea of the price, the recent reviews, and look at the calendars to see how many future bookings they have.

Start listening to some Airbnb podcasts. A few good ones are Live, Let, Thrive; Get Paid for your Pad; and Thanks for Visiting.

Do you have financing in place? Talk to some lenders and get the ball rolling on your financing.

You would need to furnish it in order to attract guests. They will not want to rent out your place if it's unfurnished. But you don't have to go overboard and spend alot of money.

You can get alot of stuff cheaply from Amazon, Walmart, Wayfair.

If you are on a budget, then just spend your money on the necessity items: beds, linens, couch, chairs, kitchen supplies. And then to add 'fullness' to the house, get a few rugs and wall art pictures/paintings (again, these can be economical).

You can also look into furniture rental. CORT is a company that does furniture rental. Search your area for furniture rental companies and you should see a few.

You won't know until you try. STR is hot right now. I would encourage you to go ahead and STR the top unit. If it doesn't perform well then you can turn it into a long term rental anytime you like. Don't go crazy with buying expensive furniture-it's not necessary for STR. Buy clean, comfortable affordable furniture to keep your costs down.

If you do STR, you can switch at anytime to long term rental. But if you start long term rental first and it doesn't work out, you will have to wait a long time until the lease is finished until you can convert it to an STR.

I have a quadplex where I STR 3 units and my tentant/housekeeper lives in the 4th unit. She is an awesome housekeeper/tenant. But I got lucky. I first brought her on as a tenant with a month to month lease. Then it turned out that she lost her job and she became my housekeeper.

That's the cool thing about a duplex. You can do it however you like. 2 long terms, 2 short terms, or one of each.

Make sure to check short term rental ordinances in your city. See what you need to do to comply. Most of the time you just have to apply for a business license and pay a yearly fee.

Your answer is no.

I have a quadplex that I've been operating as STR for the last 2 years. I tried to sell it last year and the appraisal came in way lower than I was expecting. The banks will only appraise it based on comps, or resale value as @Paul Sandhu stated.

Even though it is a cash producing asset and should be valued as such, any multi family that is 4 units or less is considered residential by the banks and will be appraised based on comps/resale value.

In my case, my appraisal value was dragged down because all the nearby quads are of lower quality than mine. Nothing you can do about it. But this is just specific to my area. Perhaps your area has some nicer quality 4 unit multifamilies.

A multifamily has to be 5 units or more for a bank to appraise it based on revenues.

In my experience banks are not leary of the higher income that a STR produces. I financed my STR's via a commercial loan as @stephanie p. described.