All Forum Posts by: Jon Martin

Quote from @Travis Timmons:

If a property cannot do at least $50-60k in gross rental income, it's not worth the hassle. You need a good base of revenue to spread your ongoing and unexpected costs against. It's also a lot harder and more expensive to get a property up and going than you expect. The exception to that would be buying furnished property, but your likely paying a premium in price to get that.

Agreed. Mine does $35-40k/year but my entry point was ~$300k all in with rehab and furnishings and 3.625% rate, so I’m profiting about $1000/month. That said, entry price points like that are getting harder to find and no way are you getting those rates ever again.

From this point forward I don’t think it’s worth tying up $60-80k in capital for a DP and furnishings to turn a $1k/month profit. A simple 1 to 3 bedroom place will only profit so much unless it’s an A+ location. Next buy will be a 4-5 bedroom with space for a game rooms because the returns scale up dramatically. 

@Ron Singh IIRC even with 80% depreciation you don't get to claim all $600k of the entire building value. Not every component of the building qualifies for the accelerated depreciation. The cost seg ends up qualifying 20-25% of the building value, so for your example you would be allowed 80% $120-150k as a deduction for 2023. The remaining 20% would be divied up over the next 26.5 or 38 years. 

Disclaimer: Not a CPA and this is not tax advice. 

Quote from @Corey Hassan:

Great points everyone. Much appreciated. Does anyone have experience with STR's in these general areas. Been doing some research in SC and seems like non-residents get taxed much higher, some counties seem to be in some STR focused debates on trying to regulate them more (lexington country for example) and seeing most requiring licenses/permits to operate (unless this is standard most places).

Appreciate the feedback!

The state of SC passed a law that counties cannot regulate STRs in unincorporated areas. So if you are outside of the city limits and not in an HOA it is probably a safe bet regulation wise. Within city limits the local governments are cracking down. 

There is even talk of a state law that will overrule local city regulations but I wouldn’t bank on it. There is likely to be legal challenges from those cities. 

Taxes vary widely by county and even within counties because of different millage and special assessments. In general you can expect to pay a lot more when not owner occupied. 

Quote from @Corey Hassan:

Great point.  Something we should be looking into as well.  Do you happen to know why insurance might be hard to get for STRs in those areas?

Florida is tough because of hurricane risk. You can get the insurance, it just won't be cheap, plus you pay a premium for STR insurance. This could haunt you as rates get higher and higher, then you may have trouble unloading the property because the buyer has a tough time finding affordable insurance. I was looking at STR policies for the Stuart area and they were $500-800ish per month, and this was several miles inland.

The nice thing about Florida is that the southern half does great during the winter months, which is not true for most vacation markets in the lower 48. 

Looks like you live in SC where owner occupied property taxes aren't too bad but they can be somewhat pricey if not. NC seems more reasonable and I don't think they differentiate between owner occupied and not IIRC. 

I use the August and I'm happy with it. App is simple and intuitive. The lock mechanism is on the inside so the weather doesn't affect it. Still works if WIFI goes out. 

Not sure if the competition all do the same thing.

Quote from @Chibueze Nwadigo:

 Be sure to download screenshots of the listing and all the photos. 

Looks great! Good advice above. Would also add some decorations with color on the walls, it helps your photos stand out. Otherwise you are pretty much already there

In California you can get into trouble for disconnecting utilities, so that's off the table. 

Are you allowed to start renovating without their consent? If you aren't up to code, then do the work to get it there and make it as unpleasant as possible. 

Oh sorry- only one bathroom for the construction workers? Bring em breakfast burritos every morning . . .. . 

Quote from @Bruce Woodruff:

You can ask for documentation of the legit Service Animal. You just can't ask what their disability is. If it is just an ESA or a scam animal, then they have no leg to stand on.

I agree . . . . And I would phrase it along the lines of, "Would you mind sending me a photo of your service dog's certification tag/license? I am more than happy to accommodate certified service dogs and their owners, however I have had problems in the past with people claiming non-certified dogs as service dogs. Thank you in advance" 

If they really are a person who requires an actual service dog, then I imagine that they are more annoyed with people claiming ESAs as an equivalent to service dogs than are with having to comply with the above request. 

What a drama queen. Wants better quality but also wants to be more affordable and competitively priced with hotels . . . . lol. I usually don't get a full kitchen, separate living room, front porch and backyard with a hotel room so why should a STR be priced competitively with a 200 SF hotel room that has none of that? In the rare case that you do have those amenities in a traditional hotel you usually pay a high premium for them, so why should it be any different with STRs? He's not comparing apples to apples.

Markets determine price potential, not hosts, and hotels will eek out every dollar they can from their customer just like hosts do.