All Forum Posts by: Kristy Farmer

@Taz McDole:  I use Airbnb often to travel myself.  What's nice about these sites is that you can view your competition and see what creative things they've done to draw renters in.  I'm all about learning ideas that others have figured out rather than reinventing the wheel.  Most hosts have a check-out list to prep it for the housekeeping that comes in afterward.  Instruction lists, house rules, and keyless entry have dramatically changed the amount of work it takes to check-in and check-out a renter.  My friends on Galveston island have been very successful in doing their own management.  It takes time for initial set up, but you get to meet people and keep the management fees.  You can also keep your rates more competitive so that it's booked all year!  It depends on your level of time invested.  You can always use a management company, which in our area is approximately 20% commission.  Some management companies offer linen service as well.

@Norma M. Valles:  The market is good for vacation rentals.  Condos/Apartments come with fees.  Neighborhoods come with restrictions on the island.  I am just now getting back into the idea of buying a vacation rental.  There is a group here on the island (I cannot remember the name of right now) that will support our goals as vacation owners to the City (membership fees of $50/year).  I will look up their name/info, and send it to you.  I had heard a long time ago that the foreclosures in some of the new condos out west had paid for themselves in 1 year of vacay rentals.  I'm not sure they had the right math but you can pull pretty good all year here on the island.  We have birding, fishing, boating, other events, and sun!  I am familiar with the rehabitation I see on the east end towards the seawall.  I haven't looked into too many condos yet.  You can get a good idea of income year round from VBRO sites and Ryson Realty (vacation management).  It's nice to see that others on BP are into vacation rentals in Galveston.  My friend has been doing it for years and has done very well.  She manages them and uses VBRO and Airbnb.  I feel as if I've been missing out on the action!  How is your Pirates Beach rental going?  Out west is a different crowd sometimes.  Moving closer to downtown will help it stay booked during the less sunny seasons!  We have so much going on all year here.  So many folks from Houston own their second home here and rent it out!  They make a killing in the historical district from doing that.

You can certainly refi more than one time if the numbers turn out to benefit. I just refinanced my home for the cash out option to get capital for investing in Real Estate property. I got rid of the PMI and escrow. Now I can keep that money all year and pay the policies and taxes. It was best for me and I had 4 years and $40 k in equity. I think it worked out for me. The numbers seemed to work out but it was scary as my mortgage payment went up slightly. It was still $50 less than the PMI was costing. You don't get the PMI back. It's just additional interest. I plan to not keep a mortgage on this house in a few years. It's a goal to invest in vacation rentals and hit my mortgage hard to pay it off quicker. I opted for the 30 year note because of my intentions.

@Adam Pierce:  I currently have this situation with my boyfriend who moved in a little over a 1 ago.  I operate it like @Jeff Arndt suggested (i.e., pay groceries and utilities, or something to that effect).  He's in school full-time but it's my house.  I've asked for $300 for the room, closets, a garage, his cat, and utilities.  We buy our own groceries and he pays the internet bill.  Honestly, I wanted respect above all else.  I asked up front and had a discussion.  I think it's okay to explain why you think it's a smart idea to the other person.  He was paying over $700 a month for an apartment and needed to focus on finishing school.  This allowed him to cut his costs and alleviate financial pressure.  I knew this would work out before he moved in my house or at least hoped it would that long ago.  If you are unsure of what she would think, I'd ask her if she's willing to pay something and what she thinks is fair.  My dear friend lived with me for a while before that and signed a lease with me.  I think it's better to be smarter.  They both have paid me cash.  It is important to be aware of the rights and laws in your state to know what would happen if the worst case scenario came true, and I think this is has already been discussed.  Nice post.  Hoping you didn't think everyone was a hater about your question!

@Account Closed: Thanks for the reply! I was actually born in CA, near Riverside. I totally understand the market there. It's amazing to see CA grow. I learned what not to do from my parents. We left when I was 6 years old and moved to Texas. Dad left his house (he added an extra room himself) and sold it to his uncle, with the understanding that my Grandmother could live in it until she died. The next year the Real Estate market doubled. Dad was happy to have a place for his mother but saddened at his loss. Hearing this as a child must have put a light bulb in my head. Yes. My Real Estate adventure will diversify due to markets. In Galveston, we have a year round rental for vacations, which is a plus. I only want one property here. The taxes and insurance are very high. My job allows me to be privy to many issues, such a FEMA re-mapping, after Ike in 2008. My insurance policy was written was written right before the hike in NFIP costs. I called my agent freaking out and he assured me I would be okay and be able to get out of my house with a 15% increase on the policy. Having said that, I am aware of the areas without flood insurance on the island. It's funny because a lot of our market is filled with folks from CA looking to retire. Their money from the sale of a house in CA can go a lot further in the Gulf Coast area! I would like to connect with you and will send you a message.

Hello BP Community-

After reading the Cash Flow Quadrant, I started listening to Real Estate investing on YouTube and found the BP podcasts and blogs. I've been listening to them for over a year now. I have a full-time job as a project manager at a government job. This job has allowed me to fine-tune some management skills that can be associated with Real Estate Investing. It provides me with a solid income to allow me to purchase deals. I've been in customer service positions for over 25 years. A couple of years ago, I initially listed my own home on airbnb.com as I live in a vacation area. From that point in time, I have learned so much. I hope to find some deals investing in Real Estate for positive cash flow, including vacation rentals in Galveston. Thanks to BP I have a pathway to learn the ropes and a framework with which to analyze deals. Wow! I didn't know I could have some help and guidance with learning as it initially seemed overwhelming. Recently, I am taking actionable steps to accomplish my goals. I have connected with a local REIN. I just refinanced my home for cash back and got rid of my PMI because of the equity. I am able to get my membership on BP and devote more time and energy into actively fulfilling my dreams. I have loved looking at properties since I was a child. This is the most exciting new adventure I have been yet! I am already analyzing a vacation cottage as an option. The neat thing is that I can actually come up with a 20% down payment!

@Belinda Lopez:   Thanks for a better representation of our lovely island.  I would only add to your description that we really do have almost a year round weekend vacation rental spot.  I have lived here since 1998 and love the island, including all of the charm you mentioned.  It is certainly a harsh climate for homes...but this spring, my door is open and my birds nests in my shutters are singing!  We are truly blessed with this spring weather and our beautiful island!  

Having said that, I would also include that if it's not tied down it grows legs around Galveston.  As long as it's put up and out of sight it may stay.  That goes for most any property here as I rented 9 times during college in different locations, or rather streets.

I work with FEMA mapping and our recent hurricane has increased flood insurance and windstorm costs by at least 15 or 20%. It can still be a money-maker here on the island but mostly vacation rentals would generate those larger increased profits.

UTMB is not the only major employer on the island. We have a Coast Guard base (housing allowance) and the Army Corps of Engineers (good income) that employs over 340 people.  Some of these workers are transient and rentals may have a turn over.  Other workers may live off of the island.   I used to list my home on airbnb.com and did well myself.  I am not close to the seawall,  but located approximately 1 mile from it.  It's a sand bar with a close proximity to downtown strand area and seawall for the Gulf of Mexico.   

Ryson Realty seems to have the market on vacation rental management although I have never contacted them. Also, my friend works for Better Homes and Gardens. She has stated that a 20% management fee includes linen service as well. 

I am extremely new and just starting out with real estate investing.  I hope to transition away from my career in environmental science for my passion in real estate!