All Forum Posts by: Eric P.

This is very bad for VR owners that have properties in Honolulu.

Laws across the country are getting more restrictive against VR properties. You never hear of some law being passed that is pro VR.

I believe it is important not to have only VR properties and not have them all in the same place.

If you do have them all in one area and this is all of your investment income, a simple law change can sink you and depress market prices as everyone rushes to dump their properties on the market.

You can never predict when laws might get tougher on VRs and the hotel industry puts more pressure on these properties due to the income they are losing. 

Hoping to hear from folks who have had success with offering multiple private rooms in a large house with shared living spaces. Currently only have experience with entire home listings, but considering this type of offering for our next STR home purchase. Some questions I am trying to answer are:

What demographic of travelers are staying in these listings?

• Students, nurses, others?
  

What locations have you been successful with this type of offering?

• Near universities, hospitals, others?

What type of homes does this work best in?

• Locations, dedicated baths, other important factors?

What do you think makes these types of offerings successful in your market?

Thinking about investing on rental properties in Florida, maybe a vacation home , would like to know about real experiences, specially when leaving a outside the state.

Hi BP members!

We recently have refinanced to go into real estate investing, as we had a very large amount of equity and wanted to hopefully speed up our path to retirement.

After discussing multi-families and placing offers on properties it is almost un-reasonable in the area I am in to invest in a multifamily due to the amount of work needed or the price listed right now.

This brought me to looking into vacation rentals and possibly getting into condos to start in high traffic vacation areas that are close enough to me so if I needed to fix something I can be there in a couple hours, but far enough where I wont be able to clean them regularly.

I have listened to advice from a few sources and decided to schedule a meeting with my CPA, who has done wondering guiding my parents in BRRRRs over the years to allow them very early retirement.

I also have the opportunity this week to talk with a very passionate Vacation Rental guru in the area I am looking.

What questions would you suggest asking these people when it comes to your first vacation rental - I have a list started but I know I am not covering everything important. Any information would help. I know I need to come up with a lease agreement and figure out insurance costs to make sure the numbers work prior to purchasing but what else.

This will be our first investment purchase but we will have reserves to get another quickly provided all works out unless someone convinces me putting reserves all at a larger property makes more sense.

Thank you!

Josh

Let's say someone had gotten a chunk of money, this year, and wanted to invest it to avoid as much tax as possible.  Here's my idea, maybe someone can tell me if or why it is flawed... yep, I'm a newbie.  I'll admit that!

I've had a vacation cabin rental in Alaska for almost 10 years.    I am thinking that if I used the money to build 3 or 4 more cabins, I could deduct that money as a business expense against this year's income.  It's a great market in our little town, and I am confident I could fill the cabins all summer.  Can I deduct, say, $60k, from a business income of say, $9000?  And show that loss against my other "real job" income" for the year?  Or would I have to just deduct a part of it for depreciation?  If so, how much, and can I take all of my depreciation up front somehow?  

Thanks for the advice on this, or any other strategies for sheltering this money while creating a good investment!

Thanks!

I was wondering if anyone has tried Brian's Page's Airbnb formula for signing leases on rental units and then using the apartments as a full-time Airbnb

Having been a STR investor, consultant, educator, and property manager for a number of years, I want to spread this piece of advice to prevent as many newbie investors as possible from heartache and money loss. And as a self proclaimed rule breaker, this pains me to even say it.

Be 100% positive that you can do short term rentals in the property you're looking to purchase before you purchase. And not only that, be sure that you can operate it the way you want to before you purchase it. 

Let me explain more using some examples...

*A friend of mine recently purchased a property in Osceola County near Disney World, the vacation rental mecca, assuming that short term rentals would be allowed since everywhere nearby allows it. Turns out after we researched it, that particular parcel isn't zoned for STR. Ugh!

*We purchased a property in a gated community with a 6 month minimum lease thinking that we could get away with having our friends and family stay there and pay us. Our nosy neighbors told on us and our guests got locked out of all the amenities, the gate and we got a slap on the wrist. 

*We purchased a vacation property in a condo association that allowed us to rent on our own but when we tried to offer property management to other property owners who weren't happy with the onsite manager, we got ourselves into a lawsuit. They didn't have anywhere in the bylaws that you couldn't hire property management outside of the onsite property management but they made it difficult enough that it was hardly worth it. 

*In Miami Beach, they are fining owners $20,000 for the first violation, $40,000 for the second, for operating in areas that are not zoned for short term rentals. https://www.miamiherald.com/ne...

*In Orlando proper, they have rules that require the owner to stay on site with guests who are staying in your property. https://www.avalara.com/mylodg...

And on and on they go. With STR being a newer animal for places that haven't traditionally been resort areas, municipalities are trying to figure out how to deal with them. Your best bet is to stick to areas that are traditionally vacation rental friendly and even so, do your research!

 Hey Mark,

1) It's just up the the investor. It is a legal action and so some investors will make their intentions known to their lenders prior to the transfers, and others do not. Because it is an excluded transaction the transfer doesn't trigger the red flags a direct transfer into an LLC would flag. In the case a lender does have issue with the transfer you would just need to have the chat with the lender - I've held several of these calls for clients and other investors. It's not an attempt to hide a transfer from the investor's lender, it is just an optional step. Worst case scenario is the lender will be upset, but they have not legal recourse because of the exempted status of the transfer (unless you violate other terms of their note.)

• If an investor has a personal relationship it may be best to let them know prior just as a personal favor, but professionally it would not be required.
• The St. Germain Act : (d) "Exemption of specified transfers or dispositions" (8) "a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; 

2) You would use a warranty deed to transfer the property into the land trust. The warranty deed is used to maintain title insurance, as opposed to a quit claim. The investor would generally sign as the Grantor, be sure to pay all fees associated with the deed and be sure to complete all ancillary documents/forms that would need to be sent in with the deed in order for successful redecoration. As mentioned above, this does not trigger the red flags of a direct transfer into an LLC. Even if the lender does see the transfer via the warranty deed - it is a legal action and they have no recourse unless you are breaking the other terms of the note.

3) A Warranty Deed is used, as opposed to a Quit Claim Deed, in order for the investor to maintain Title Insurance. Most Title Insurance companies will cease to offer insurance if a Quit Claim Deed is used for the transfer as the Quit Claim Deed offers no warranties as to clean title. So you are spot on.

Great questions. The most time consuming part of the process is just making sure you identify and record all of the correct documents within the county, so be sure to do your due diligence in this regard.

What questions to ask before closing on a turkey vacation rental beside the rental history and how to market the place? Thank you.