All Forum Posts by: Dina Schmid

I'm continuing to search for a vacation home that we can use list as a STR when we're not using it. We walked away from one that we really liked after it was found to have some serious foundation issues. We've been looking primarily in the Red River Gorge (KY) area and also in the Hocking Hills (OH) area. Occasionally we see places listed that need 4 Wheel Drive to access or require climbing a lot of stairs to reach the front door. I didn't even go up the long, steep driveway to one because I felt completely uncomfortable driving it in my SUV. In my mind it seems like it would be hard to coordinate furniture and appliance delivery as it may require a special vehicle and/or extra manpower to take something up 70+ stairs. I've been mentally crossing places like this off my list, but maybe I'm overly pessimistic.

Is there a trick to getting furniture and appliances delivered to a place like this that I'm just not aware of? Even if we buy turnkey, eventually it will need something and I want to make sure I'm not ruling out places that I shouldn't be.

Quote from @Dale Bertrand:

We self-manage our STRs. In my experience, you don't need a management company. You need a cleaner and a handyman. 30% is WAY too high!

In a few years we may be in a position to self-manage, but our jobs right now make that very difficult. It's a service that I'm willing to pay for although I understand from the responses that I should explore other options that may be less expensive.

Quote from @JD Martin:

Thank you for sharing your thoughts on this. It made me examine a few of my own beliefs. When you've been "saving for the future" for all your life, there's no point at which you envision stopping saving because "the future" never arises. I think it will take a while, but "this is what we've been saving for" needs to be something I become comfortable with.

Quote from @Brian Barch:

Several Thoughts here, from someone who owns a successful STR and uses it monthly for personal use:

1) don't give away 30%!!!!!  That's an oldschool PM.  Many modern options (none of them perfect, most adequate) that charge much less than that.  Keybee (9%) and awning.com (15%) are good starting points. Also, don't go with the place that limits owner stays.  Too controlling when you own the place, and frankly not needed.

Part of this is in how you phase it.  "lose $5K/year" could just as well have been "people will pay for 95% of our vacation home for us." Suddenly it doesn't sound so risky.  But if nothing else, shop around MUCH more for a PM.  That should help your projections a bit

The 30% is for a local boots-on-ground, full-service company. There are several of them in the RRG and when we've rented down there for getaways, we've always gone with booking directly through one of these agencies. (They also list on VRBO and AirBnB for owners) I don't know if that's unique to this market, but it seems that they take up a huge part of the market down there.

I like your take on someone else paying 95% of our vacation home for us. I think I need to look more long term. We might lose $5K/year the first year or two. But in 5 years we could be making a lot more than that and have built equity.

Quote from @Sarah Kensinger:

On a different note...have you check into the Hocking Hills area here in Ohio? It would also be a wooded area that is a couple hours from Cincinnati and is a great location for a STR! If you need any help running numbers or just talking through a potential deal, feel free to reach out! We help new and current investors look at potential properties. Lastly 30% is too high for a STR management company, especially one that says how often or how long you can stay at your vacation home.

Hocking Hills would be our first choice, but inventory seems to be very limited and more expensive than RRG. 

A few of my husband's colleagues have STRs and one pays 40% for management, so we thought 30% was good! While I would love to pay less, based on my discussion with them and what they provide, I was comfortable with that.

Quote from @Nathan M kiefer:

That being said, we went down the same journey and decided our hang-up was the debt- we couldn't fathom the property "just paying the bills". 

That is one of my biggest issues for sure. There was a time in which I was looking for something we could pay cash for. Won't work for this one due to looking (slightly) outside of my original price range and the amount of upfront work needed. My husband was thinking we could take the mortgage interest deduction (since we don't have a mortgage on our primary residence), but now you have me wanting to run the numbers with 75% or more down. 

First I do want to say that I really appreciate everyone sharing their experiences and the wealth of knowledge I have found here. Of course, it's just added to my analysis paralysis! 

How did you get over that and pull the trigger - or know that it's best to walk away? Is there any advice you'd give me on our particular situation:

Husband and I are 50-something "millionaire next door" types with no debts and significant savings. As my husband gets closer to retirement, his dream of owning a cabin in the woods gets stronger. We've enjoyed checking out different areas within ~2.5 hours from our home on the outskirts of Cincinnati and recently saw something near the Red River Gorge that I really like and can see myself going to frequently. It is priced a bit higher than what I wanted but would really lend itself to a more upscale couples retreat with some improvements. While I would rent it out as much as possible, husband would want us to block out 2-5 days/month there. 

We're both struggling with crunching the numbers. We would need to hire a management company (found one we like, they take 30% but allow owners up to 60 days/year occupancy). In addition to furnishings, t will need work (such as new countertops) to meet my vision for upscale couples retreat. We go back and forth on how much we would put down and how much to set aside to get it up and running as a STR as quickly as possible. That leads to going back and forth on whether it's worth it given the upfront investment and the data we're finding on occupancy rates, cash flow, etc. vary from losing $5K/year to making over $10K/year. Very frustrating.

(Also assuming we wouldn't do an LLC to purchase since it wouldn't fully be a business. I own my own business/LLC and am open to changing that structure for tax purposes, such as putting it under an S- or C-Corp if it would help with this situation.)

I appreciate any and all thoughts on this matter as I can't seem to get out of my own head on this!