All Forum Posts by: Eric P.

I'm under contract to close on my first short term rental (vacation home..AirBnB)... I understand the LLC would be helpful if ever I sold the place so there is no need to re-permit. Any tax implications? Any other considerations?

This question comes up a lot & I get the feeling that some folks don't really understand how an LLC works. The LLC isn't to protect your rental property (that's what insurance is for); the LLC is to isolate your property so if you get sued no one can touch your OTHER assets that aren't in the LLC.

If you have valuable other assets (bank accts, stocks, bonds, brokerage accts, 401k, other houses, etc), then it's worth considering an LLC for the rental property so if something happens & you're sued, the lawsuit is isolated to just the LLC & not your personal assets (if done properly). Also, I'm not a lawyer & there are certainly some nuances beyond this that a good lawyer can tell you - this is just a high-level overview

2 Votes

Originally posted by @Ken Latchers:

The strongest argument to me, for being on both vrbo and Airbnb, is that every now and then you might be delisted due to a guest complaint or something else hidden cameras or discrimination or something else) and have no presence suddenly.

Being on both and probably also booking.com can protect you against a sudden disaster.

That sparks a question I’ve been thinking about - if you get delisted bc some customer complained about something, are you able to create a new account right away? I suppose you lose your Superhost status but I guess you can at least start over? Or is it worse - are you blacklisted for life?

0 Votes

Originally posted by @Lindley Garcia:

I just closed escrow for our first short term vacation rental property. Should I set up an LLC or do I just operate as a Sole Proprietorships? Need your expert advise please. Thank you.

I think the most important Q is: do you have a lot of other assets you need to protect? If something awful happens in your rental & you got sued big-time, an LLC would protect your personal assets (personal home, 401k, etc). If you don't have personal assets that need protecting, then you may not care about having an LLC

1 Vote

Originally posted by @Kurt Kwart:

Hi @Mayer M. I have duplex STR in Ventnor and a 10+ unit under contract. The returns have been beyond expectations but its a high end unit. (spent $4000+ on soundproofing one unit (ventnorbnb dot com if you wanna look at our listing).

We are converting our Atlantic City properties to STR as well.

Moms got spots in SW Florida and she likes being down there for the winter. I think you play to what you like. Maybe check out the STR University guys videos. It's great content

Yeah, I've looked in Atlantic City. Looks like it can be a bit rough for LTR but GREAT for STR. After all, AC is one of the few spots in Jersey (perhaps the only one??) that has year-round demand

0 Votes

You can look on Zillow to see general rule of thumb in E TN is 3-br sells in the $300s, 4-br in the $400s, 5-br in the $500s

Based on all the data I’ve seen, gross annual rental income there will be approx 15-20% of the home cost

1 Vote

Originally posted by @Will F.:

So There's AirGMS and VRhost and some other vacation/short term management software programs

Of these dozens of options for vacation rental management software has anyone here used any and recommend them?

I'm looking for something similar to Appfolio or Buildium (which I use) to manage multifamily units.

I'm just testing a few units now I own and manage about 50 units across the country but am just pilot testing a few short term rentals locally. 2-3 in Long Beach/ Los Angeles, CA

I've seen AirGMS mentioned & praised on BP more than any other STR mgmt software.

If you search BP, you’ll find some threads on this. Here’s one of them:

https://www.biggerpockets.com/forums/530/topics/677062-str-automation-resources?page=2#p4039892

2 Votes

Originally posted by @Jacob Kelley:

Has anyone ever sectioned off part of a SFH for use as both a traditional rental & an Airbnb?

I found a house with an odd layout - it's a 5/3, but one bed/bath can only be accessed through another bedroom, or from outside through separate entrance.

I'm looking at separating the house to create a 4/2 traditional rental and an attached 1/1 Airbnb. On paper, it cashflows, but I'm worried that the attached Airbnb would make the property less attractive to potential tenants.

If anyone has any input on this situation, I would greatly appreciate the input!

I’ve stayed as a guest in an Airbnb like this when I needed a cheap room for a night or 2 - worked great! As long as it’s legal & the guest has bedroom, kitchen, bathroom & you price it accordingly you can generate some income

I would put a note in the VR listing mentioning that it’s an attached property and loud disruptive noise will not be tolerated. Then buy a noiseaware device to enforce that

0 Votes

Originally posted by @Alex Bekeza:

@Lisa Sessions You could listen to them and wait an entire two years to get that low conventional rate or you could utilize a commercial/DSCR based loan where they measure the debt coverage based off of market rents. In other words, if the 1007 (rental comp appraisal) report brought back a market rent that would meet greater than a 1.0 DSCR than you could qualify for a 30 year loan 70-80% LTV with rates in the 5% and 6% range. (Of course, a bit higher than conventional). You just have to weigh the pros and cons for yourself.

Tax returns wouldn't even be collected.

Thanks Alex - is that 30 year fixed? And you lend to LLCs, right?

0 Votes

Originally posted by @Mayer M.:

@Susan Ticson

Hi Susan, does it cash flow well and allow you to use the property a lot?

Also is your property lakefront? I’ve heard those do the best

0 Votes

Originally posted by @Mindy Jensen:

@Don Thompson what is coworking arbitrage?

It seems like the line is rapidly blurring between what used to be called “corporate rentals” or “coworking spaces” and what is now called rental arbitrage. In Brooklyn they now even have open coworking space in old warehouses (check out The Yard). In some of these cases, it’s as simple as someone just renting an abandoned warehouse & providing utilities & wifi & some furniture & then collecting rent, they leave the space entirely open!

0 Votes

All Forum Posts by: Eric P.

Eric P. has started 55 posts and replied 461 times.

Post: Does a short term rental need to be set up in a LLC?

Post: Verbo (what happened to HomeAway) vs Airbnb

Post: Just got my 1st rental property - should I set up an LLC?

Post: STR - Ventnor, NJ, Poconos, PA or South Florida?

Post: Can You Get a Business Loan For a Short Term Rental?

Post: Which Automation Program Best for Short-Term/AirBnB? System

Post: Traditional Rental/Airbnb in Same SFH?

Post: Financing your Airbnb

Post: STR - Ventnor, NJ, Poconos, PA or South Florida?

Post: Coworking Arbitrage Possibility?