All Forum Posts by: Jarrod Kohl

The tax deferring option makes sense if you want to sell and not pay on those proceeds. But if you plan on holding it long term since you would have a low interest loan and be cash flowing, I would not let cap gains tax stop you. First of all they would be long term gains if/when you sell and you could also look into doing a 1031 exchange (though there have been talks about killing that program)

Yes you should do long term planning, but maybe just pencil out a few options. If you are cash flowing nicely for 5+ years (including some tax writeoffs for your rental business) its probably worth paying the tax.

I was just having this disccusion the other day (havent we all been having the same one)

My thought would be to see how lean you can run it. If you can still profit off the property if bookings drop by 20% or 60% then try to prepare for that. I do think we see pull back in travelling and bookings....BUT just like the last recession and just like the first part of 2020 the first things to come back are the little drive to destinations. Sure gas price is high, but if you are driving to GA and not flying to Paris, you are still spending a lot less money. And if you are paying $50 or even $100 a night, I would rather do that than somewhere that needs $300+ a night to work. 

So in my opinion it really depends on your normal tenant profile and if you think you still will have a decent amount of people thinking about taking a long weekend or a nice week off. 

Lastly, what has really held value well is somewhere that people can work from. Nowadays, people are not always just going on vacation. They could be booking your place just to work for a week from somewhere else. (assuming its not an off the grid camp or something)

 You say that you cannot believe the negative vibes but also mention its worth nowhere near the asking price. I think that seems to be what most people are in agreement over. He can do a resrtiction if he wants, but it seems he is looking for someone either really bullish about the property's long term rental potential or wants a 'turn key" VRBO and is willing to pay a premium to do so and forfeit profits for 2 years to do so. 

 Honestly the data would be useless. 

I end up providing big containers of all products. Mix of higher end nice stuff and sometimes just the super cheap big ol' bottles (especially for the outside shower) I also have had a few wrapped bars under the sink if people wanted to grab them. (they never do)

But the reason the data is useless is that with such a small sample size (only a few units) it really just depends on the guest. Sometimes it lasts weeks and other times it gets wiped out/broken/lost. But its a small enough cost not to be too concerned.

If I had limited income and did not want to house hack you could do "low key Househacking"

Assuming you have at least a 2 bed apartment or house, rent out a bedroom a few times on Airbnb. Then use those reviews and bookings to do at least 2 weeks, which even in areas with harsh STR rules (Boston) you would be ok to do. This way you would get a nice little fund going AND you would get some experince being a host as well as getting some ratings and reviews on your profile. THEN I would buy a smaller condo or "second home" in a area that allows STRs and run it as well as you can.

Or keep scrounging cash and renting out your own rooms until you can afford the downpayment on a cash flowing property. The good news is that you would have in theory a w2 and would want to use that to your advantage.

Hello,

Anyone know any good property managers in the Worcester area? Looking for someone who does small multi-families.

Thanks!

This is interesting! Thanks for pulling it together.

I would be interested to see how it broke down by zipcode. I know when they try to change something in Back Bay or Beacon Hill the pitchforks usually come out.

If someone really does not want to house hack. The other option (similar to what I have done before) is to Buy your "Second Home" first. Living in Boston we ended up buying a place one the Cape early (off foreclosure) and fixing it up. We then Airbnbed it for at least a year and sold. So it was a half flip/half STR rental.

In hindsight I would have tried harder to keep that first flip and just keep adding doors, but the profits from that flip did help us acquire more real estate anyways. 

The lesson is though, maybe worry less about where your primary residence is or, if you don't want to share a duplex/3 decker. Just think about a place you can rent out but not have to live in.

If you are going Boston to NYC you could also look at places in CT/Western MA or similar. 

Depending on where in Boston you are, we have also had great luck doing Airbnbs on the Cape. While it is certainly Seasonally summer. We still had more than enough revenue to profit in the offseason. 

Sounds interesting I will reach out!