All Forum Posts by: Jacob H.

I ultimately agree with what the others have suggested. The initial reviews that you'll receive will make or break the listing and its potential in the future. It's crucial that the initial reviews are stellar. With that said, we can't see any pictures so are unsure of the actual condition. An option is to list it and be very upfront in the listing about the shortcomings and condition, along with detailed pictures. If you reduce the nightly price and are very open about the fact that it's not a (5-star) resort, then you'll likely attract a number of people that are looking to visit Hawaii on a budget. Once you make the renovations, you can update everything. Ultimately, people will do what they want on reviews but if you're eager to get started, being honest about what people are getting and adjusting the price to reflect that will likely yield higher reviews than an unpleasant surprise. 

Are you trying to do STR arbitrage? If so, it's pretty challenging finding someone that's interested in allowing you to "sublet" the rental unit as a STR. However, there are people out there that allow it. The key is going to them armed with knowledge as to why they should let you run their property as a STR. Otherwise, what's in it for them when they could have one, stable and vetted tenant in there for 12 months? Examples of why they'd want to work with you are: You're an experienced investor and like-minded so your interests are aligned (meaning you will ensure the place is taken care of). You can give an additional security deposit. You can offer to make minor renovations and improvements (helps them and you increase the appeal of the STR). You will clean it every time a guest leaves and in the long run will require less maintenance, etc. You have to put yourself in their shoes and see it from their perspective.

We invest out of state for multiple properties so it only makes sense for us to use a manager. Otherwise, I'd say it makes sense to manage your own properties until it becomes such a task that you begin losing money due to opportunity cost.

It sounds like you already have a plan to get started. Honestly, anything is better than just reading and listening to podcasts. Of course, you need to start there because it's free education and it teaches you what you need to know to get started. Eventually, you have to just jump in, which it sounds like you're about to! To utilize the remaining free time you have throughout the days off with a more active role in real estate, you could look into flipping, wholesaling, becoming a part-time realtor, or running an airbnb. We actively run an airbnb out of our basement each day and it's been rather fruitful not having to pay for cleaners since we do all of the work ourselves. If you don't want to spend a lot on the purchase of an airbnb, you could always consider airbnb arbitrage. Hope this helps.

Yes, I'm a bit confused about your goal. Are you looking to have someone stay in your space and post the listing about the STR? You could just look for other listings to get some inspiration. Ultimately, the key driver to the space is going to be the location, price, and pictures.

Obtain additional liability insurance on top of what Airbnb offers (if that's the platform you're using). I can't speak for the other STR platforms but it gives you some additional peace of mind knowing you have some coverage. I've reached out to Airbnb about issues and they aren't very good at addressing issues in many cases. Additionally, make your listing very clear and add any house rules you think will help back yourself up if a guest violates it. For example: "no photoshoots where multiple people are coming and going from the space". Otherwise, people will abuse your space and if you didn't say they couldn't do it, Airbnb won't back you up.

Like someone else mentioned, educating the guests on the review system is crucial. Otherwise, people will leave you a poor rating for rather minor issues. Basically, we put up a guide next to the door so they can review it on the way out. 5 stars means they were happy even though perfection does not exist. 1 star means the hosts need to be thrown in jail immediately. Most will realize that something like "wish we had a couple more hand towels" is still worth a 5-star review.

I could definitely see myself using one of these. There are actually many very nice looking Airbnb container spaces. Don't let the "container" scare you away. I wouldn't mind obtaining something like this and making it modern on the inside. Then, you place it somewhere on your land and it essentially is treated as a guest home/cottage/tiny home. STR the place out and clean it on your own when they leave. Many people won't agree with it since it isn't super passive but it's a great way to somewhat "house-hack" without having people stay inside of your house. It could work because it's capable of being relatively inexpensive. Of course, you could dress it up on the outside so it doesn't look like there's an actual shipping container in your backyard.

Are you planning to remain local with the short-term rental and manage the day-to-day turnover or do you anticipate hiring a short-term rental manager? Just curious how passive you anticipate being with it. With my airbnb, we do all of the management and cleaning. It makes it a bit less passive but our profit margin is a lot higher because we save on the management and pocket the entire cleaning fee.

As many others have already mentioned, paying off the credit card debt would be my first priority. I would probably go ahead and pay off the debt all at once. Sure, it'll hurt to see that much money leave the savings account but at the end of the day, you won't be paying interest and all the money that comes into your account is there to stay. While you're building to purchase a rental property, you could also house hack and therefore begin RE investing now. I'm not sure what your living situation is right now, if you rent or own, if you have room to run an airbnb or rent part of the house to a tenant, etc. You could also potentially rent your garage as storage. Things to consider. 

Pros and Cons of each path of course. I agree that if you're interested in real estate investing and looking to get started, it sounds like this could be a good property to begin with. Even with adding the property management fees to the overall expenses, it appears there will be good cash flow. That, plus additional appreciation, plus principal down payment could prove to be a good investment with the house. It sounds like you and your wife have made a decision to hold and rent the property. I think it'll be a good choice for you and as others have mentioned, if you decide to sell at a later time instead, there's nothing stopping you from doing so.

Jake