All Forum Posts by: John Mark Morelli

Not an expert on mammoth lake, but have you confirmed that the unit is in a building which has no restrictions on STR?

Also, past rental numbers are fine, but can be variable depending on the commitment of the owner and how many days they chose to rent out.

If I were you, I would compare the unit to other similar units in the area in terms of bedrooms, bathrooms, location, amenities, and aesthetic. Figure out occupancy rates for comparable units that it will be after you do any planned updates you have in mind and model it all out over a few years.

Take the conservative estimates and figure out if it's worth the risk.

@Luke Carl, I'm where you were 6 years ago. I own 1 rural property which is doing relatively well. Would love to pick your brain on how to get to $12m.

The pump on our community well (~50 properties) broke and the contractor can't get out there to replace it until Monday so that would explain your low-to-no water pressure. 

The good news is that we have a workaround until then. The bad news is that the fix is to put a literal garden hose into a neighboring well and siphon it out slowly overnight and hope that it fills up enough to service the houses that are currently in use (yes, they got a pretty solid refund).

At the moment I have the finances to buy

Assuming it's a healthy market for short-term rentals and you can break even, just buy it. Or don't buy it and look for a healthier market. Do the math on a fixed payment over 30 years and assume rising nightly rates (2 - 3% / yr). Your principle payment is effectively an illiquid savings account which others pay for along with the appreciating value of the property.

Even if you're not netting much cash for a couple years, you have 28 years of positive cash inflow on top of the equity. Even if you were slightly in the hole for a year, it should pan out, but I wouldn't advise anyone get in that position unless they could ride it out.

I made some conservative calculations on a 500K property in a good short-term rural rental market and the projected rental income + 1% annual property appreciation (very modest) came to $1.1m net positive value over 30 years.

We bought it. Our first year is almost complete and beating projections on rental income (+50% by booked nights alone) and property appreciation (+10%) which implies we'll be well above my projections in the end, even with some bad years in there. But every investor is a winner in a bull market, so take my story with a grain of salt. It's easy for me to tell you what to do with your money :).

I'd ask the realtor who sold you the lot, assuming they're local. They should know the area, and have some connections. That's how we found our cleaner and handyman in a pretty rural market.

It's never as easy and simple as gurus make it sound.

This right here is where the hate comes from. Gurus sell books / videos / etc... all based on the idea that you can get into RE investment with no capital and make a ton of money. And I feel bad for people who bought into it. The hate (for me at least) is more directed at them than the person posting.

@Ciara Wright, The hostility in this thread seems unnecessary. I can tell you that a big part of RE investing is receiving a short-term return (income) + equity (other people pay your principle and your property appreciates).

I believe that's why you're getting hate in the thread. If you've found a way to turn a buck without too much add'l effort, more power to you. Best of luck.

As others have said, start at Market price, and the Enemy Method is brilliant, we used it on ours and it worked like a charm. Long and short of it is to pick a property which would most closely compete with yours (# rooms; amenities). A more gut-feel is put yourself in the place of the guest scrolling through AirBNB and guess which property they would debate about whether to choose yours or theirs. Price similar or slightly lower since you don't have reviews yet.

Also, enable "smart-pricing" on AirBNB to get the listing boost, but override their pricing. In my experience, it will be lower than market.

Last year, my partner and I started our vacation rental journey and purchased a place in Central Oregon in a rural area. It is located on a small mountainside community of around 300 properties in the middle of Deschutes National Forest.

Wildfire season is coming up, and seems to be starting earlier each passing year. So I'm starting to think through nightmare scenarios around wildfires. I have one or two beautiful Ponderosa Pines which are < 50 feet from the house which I'm thinking about cutting down (though I hate the thought). I'd be curious to know what other proactive measures people are taking with properties in at-risk areas.

Also, I have 2 insurance policies, one is your standard property insurance, and the other is a liability-only insurance designed for short-term vacation rentals.

I'm curious what products or services insurance companies might offer that can support risk-mitigation. For instance, I had vaguely heard about a fire-retardant foam which insurance companies can spray on properties in the worst-case where a fire is nearby and approaching the property. Would love to hear this groups thoughts.

@Jonathan Stone, I took the plunge last year - mountain cabin about 3 hours from Portland. I could do a step-by-step from memory, but would probably only capture ~80% of what I actually ended up needing to do, and as others have said, I'd find one of the many detailed checklists I've seen floating around on this forum.

One of the things I've learned a lot about is finding local vendors - cleaners; handymen; etc... Our cabin is in a rural location, and it was really tough to find good vendors, especially since many of them don't list on google. Here are a few things I've learned.

Run the rental as if you were in another state. You won't keep it long-term if you need to run there urgently, even if only a couple times a year. Which means you'll need a couple vendors in each area.

• Ask the selling realtor if they have any references. They sell a lot of investment properties and know the area
• Check referrals
  
• Confirm they're licensed and will pay taxes, allowing you to write those expenses off.
  (For Cleaners)
• Confirm they can do same-day turnarounds. Sole proprietors with no staff usually won't commit to this, nor should they.
  
• Ask if they have their own supplies or need you to provide them
  
• Ask if they'd be willing to pick up supplies occasionally and drop them off at the property when you're short on something. Most won't do this for you ALL the time, but can be nice if you run short and won't get out there for a while.
  
• (For Handyman)
• Ask a lot of plumbing questions, as abut 90% of your urgent needs will fit into this category
  
• Ask about 24 hour support if a pipe breaks