All Forum Posts by: Justin Ellis

@Linette Woodland

Great point on staggering the bad news!

@Robert Vorhies

I don't have any experience in this, but my gut feeling would be that if you double their rent, they'll leave and the units will free up for new tenants paying market rents. Creeping the rent up with the end goal of double in mind would probably just piss them off slowly and they will stop caring about the property. Might as well rip the band aid (If you can legally do it).

@Chris M.

HELOC? Obviously this too will take time but could be a good source if you have any equity in your primary residence.

I also strongly believe that in the current regulatory climate, when looking to buy for purposes of STR, you need to make sure that the market has a serious rental supply shortage. Although it seems like MOST of the time with change in regulation there is a grandfather clause, this has not always been the case, so you could get your sweet little BNB up and cash flowing hard and then policy changes. You and thousands of other STR's are then converted to LTR so the market needs to be able to support that. Of course, this is a double edged sword in that the markets where there is a affordable rental supply shortage is where strict regulations will inevitably roll out first (LA for example has just shut it down).

So, don't be afraid of regulation change (As many people are and won't touch STR for that reason), but be aware what's going on with them, buy smart and ride the STR wave while it's here, there's tons of money to be made!

@James Murphey @Eric P.

Airdna.co is gonna be your best friend for finding occupancy rates and average nightly info. Beware there is such rich data on this site that it can cause analysis paralysis, but it's amazing, accurate info. It's an aggregate of 36 months of data from Airbnb and Homeaway!

Note, their income numbers include cleaning fees (which I hate and don'tunderstand why they do it this way) so you'll need to back those out unless you plan on turning the unit yourself. Other than that little issue, it's pure gold!

@Brett Sayers I didn't read all answers in the thread, but one reason I can provide (that I didn't see) is that they could be doing short term rental arbitrage (as I do). It's taught in all the courses to get to the owner and not to deal with PM's because they're a waste of time. Only the owner can make a decision like letting you sublet the property, PM's can/will not.

So if you're interested in renting to someone doing STR arbitrage, letting them know you're the owner on the first call is the info they're looking for. And I know the knee jerk reaction by owners is "absolutely not"! However, keep in mind a place being used for STR arbitrage is viewed as an asset and is treated as such (minor repairs made regularly often without bothering you and cleaned between each stay), whereas even the BEST tennants in the world view your property as a liability and will let cleanliness and minor stuff slide over time.

@Dominik Makaneole thanks for the insight!

@Rick Bassett just curious, what markets are you buying in currently? I manage some STR's and I have an investor that wants to get in the game. So I'm currently looking for a sweet spot where STR market is good (not the best, those markets are overcrowded), LTR market is stable and priced reasonably enough to create decent cash flow AND strict regulations aren't already in place (which I firmly agree it will happen all over the country soon enough, but I'm riding the wave with a backup plan). Any starting points would be much appreciated!

On a side note to drive the point home, I just read on another thread that DETROIT (you know, the city that could use all the investor money it can get) is seriously considering strict regulation that will severely limit or put a stop to non-owner occupied STR... what!? Detroit? Wow.

@Roy Gutierrez great insight! Any update on this? I'm currently looking for some good markets that I can B(STR)RRR (made that up, but you get the idea) and Detroit was on my short list because of the potential low cost of investment and the thought that "no way Detroit does anything detrimental to limit outside investment". And then I read your post... pfffff

I'll do my own digging, but always curious to hear an insider's perspective!

@Christy Mikesell where exactly in AZ are you?