All Forum Posts by: Ethan Cooke

@Amit M. What restrictive rent control ordinances apply to SFH's in San Francisco given that there's no restriction of rent increases? This gives SFH landlords financial flexibility that MFH landlords don't have. I look forward to your response.

@John Einarsen House-hacking is a great way to minimize your housing costs. I recommend that you look for a home that either has an In-law/ADU already built into it or a part of the home which you can convert to an In-law/ADU (e.g. extra large garage or large storage area with reasonable ceiling height). It will be significantly cheaper to build a small second unit if it's inside the existing structure vs. building a new structure. If I were buying my home in SF over again, I would definitely do this since it provides the flexibility to rent out one or both units. If you live in an area popular with tourists or business travelers, you can likely rent out one unit as a short-term rental and cover most of your housing costs.

@John Einarsen

@Andrew Wong - That's a great thread about subletting STR's in partnership with the landlord. Thanks for posting the link.

@Account Closed - I like where your company is going with this! I am also looking to expand my STR business. I think that like any kind of REI loan, a critical factor to qualify for financing is demonstrated success. Have you kept detailed records on the financial returns of the 5 units in your test city? I imagine this documentation combined with your STR management experience would allow you to qualify for various loans--at least from hard money lenders if not from traditional banks. I think 5 years from now this will be a non-issue because banks will see the healthy returns that STR's can produce. Good luck securing your next $10M!

@Benjamin Alesi - in addition to platforms, pricing and cleaning which are all very important:

1. Think about a theme that will make your home special--it could be decor from a specific decade, a sport or a type of region (Beach House, Countryside, etc.). Guests love this even if it's not their specific style.

2. Automate and systematize for high volume. For example, use a keypad to eliminate lockouts and lost keys; stock important supplies on-site and enlist your cleaning service to replenish as necessary (shampoo, soap, TP, napkins, etc.)

3. Be an awesome host! Send a warm (but standardized) welcome note when you receive each booking, provide good information about the home and local activities, make yourself available for questions, etc. I even ask the cleaner to put out a bottle of wine and chocolates for each group, and guests love it.

4. There are a lot of free, valuable online guides full of AirBnB hosting tips. Here are 2 good ones:

http://laptoplandlord.com/airbnb-tips-for-hosts/

https://www.buzzfeed.com/anniedaly/pro-tips-from-a...

Good luck!

@Jamie M. - I agree with @Amit M.   if you screen your tenants carefully, you can greatly reduce risks and identify folks who are less likely to stay 10-20 years. So renting your cottage as a second unit could be more lucrative than renting the home and cottage together. As David Faulkner asks, is the cottage accessible separately?

2. How do you value long-term wealth-building vs. immediate debt pay down vs. ongoing cash flow? SF real estate is a great investment to build long-term wealth. I own 3 SFR's in SF which hopefully will fund a big part of my retirement in 15-20 years. But this may not be your goal. I've found that SFR's in SF generally produce little or no cash flow initially (with a typical 25% down payment). On the other hand, if you sold the house and bought a multi-unit in a lower-cost area, you could cash-flow immediately but probably with much less appreciation.

PM me if you want to chat. Good luck!

Ethan

@Alex Washburn - A friend of mine owns a property in Costa Rica and would probably be happy to share his experience with you. Feel free to message me if you'd like to connect with him.

@Jamie M. - Definitely join SF Apartment Association. They are an association for landlords. They have all the standard property-related forms you might need and the language generally protects the landlord. Also, is it a multi-unit? So far I have chosen to invest in SFH's in San Francisco to avoid rent control laws. You may know that any San Fran MF built after 1979 is rent-controlled. So screen your tenants very carefully and get to know a good RE lawyer.

@Jamie M.

@Wilson Cheung - I agree with @David Faulkner and @Arlen Chou--You can find cash-flowing deals in the Bay Area. My primary goal has been appreciation and now I'm looking for more cash flow. I own 3 SFR's in San Francisco including my primary home. One rental home (recently purchased) is break-even while the other provides about $300 a month in cash flow and has appreciated $200K in 2 years. Is this speculation? To some degree, yes. But we bought a compact home that showed poorly, needed cosmetic work and has several bedrooms. This makes for a great rental property with immediate upside potential. And given the economic forces in places like the Bay Area, Los Angeles, Manhattan, San Diego and Boston, long-term appreciation is a very good bet.

@Carrie Giordano Other than distance from LA, what criteria are you considering for your vacation rental? Like you, my wife and I own long-term rentals (in San Francisco) and are considering investing in a short-term rental within a few hours' drive for our next purchase. I would love to find an area with good cash flow on a vacation rental in Northern/Central California.

You can certainly self-manage a vacation rental from 2 hours away with a cleaning person and a handyman. Technology makes this fairly easy. AirBnB automates the booking, the home guide, cancellations, etc.  You can use a keypad lock for guest access and email the combination to your guests, etc. Check out the June 1 BiggerPockets podcast "Early Retirement Through Short-Term Rental Properties." Great coverage on this topic!