All Forum Posts by: Jon Martin

Quote from @Michael Baum:

Bought a coffee maker with a stainless carafe for this very reason. 

Agree with everything above. 

Probably only worth it if you plan to spend a significant portion of the year there (3 months/year minimum, preferably 6+) for at least the next 1-2 decades. 

Central Coast resident here. I would avoid this state even if the numbers work. You are seeing a lot of County-wide regulations, which is especially worrying. I personally like properties in unincorporated areas that are in close proximity to hot spots because they tend to be safe from city rules, but County STR regs throw that strategy right out the window.

Another thing I don't like is that LTR laws strongly favor tenants, so an LTR back-up plan is a lot more risky. 

Quote from @Jeffrey Page:

Quote from @Jon Martin:

@Jeffrey Page do you recall the paint name for what is on your ground floor porch? Great listing, well done!

Hey Jonathan! 

I wish I had the attic stock paint cans in front of me so I can double check (they're at the STR) because I made a last-minute switch from my shortlist of colors. I believe the color is Sherwin Williams - Bunglehouse Blue - SW 0048. The actual paint is slightly lighter than the swatch I got from the store.

Also, just in case I messed up here's my shortlist. Sherwin Williams - Favorite Jeans - SW 9147 or Sherwin Williams - Colonial Revival Grey - SW 2832.

I hope that helped! Wish you the best!

Thanks Jeffrey! the Favorite Jeans is similar to a color I have picked out (BenMoore Whipple Blue) for painting the porches at my STR.

@Jeffrey Page do you recall the paint name for what is on your ground floor porch? Great listing, well done!

I wouldn't call anything underrated if the price to entry is as high as what it is in Gulf Shores. Maybe in the pre-Covid days you could've called it that. 

Aside from favorable ADR to purchase price ratios, I like markets where I can do an enemy analysis and see STRs with underwhelming interiors but have well-booked calendars. That way I'm relatively confident that I can do far better with some TLC and ingenuity. Doing periodic searches throughout the year for the upcoming weekend and seeing what's available can also give you a good sense of the market landscape. Whereas if I look up the Joshua Tree area I can hundreds of listings for the next few weeks, many of which with great designs and amenities but with wide open calendars. 

I will also second the comments above about regional markets that are lesser known outside of that area, but are long-time destinations that are frequented every summer by people within an easy drive away. Especially when most of the homes are already STRs and there are geographic constraints that prevent more expansion, which makes it a relatively safe bet in regards to market saturation and occupancy. 

Quote from @Amy L. Pagels:

Quote from @Jon Martin:

Quote from @Michael Baum:

On the material participation, it doesn't mean just management. Here are the rules around material participation. If you just talk to guests, alter calendars etc, you might not meet the requirements.

https://www.irs.com/en/article...

This is the rude awakening I had this week talking with CPAs. Seems very tough to offset W2 income if you are not a RE professional and are above the income threshold (which you probably are if you are an investor). 

 @Jon Martin - This chain has sparked me to connect with my CPA on Monday to go into this in more detail. I'm hoping there is a way to offset our W2s simply by showing material participation w/ our STR but want to also avoid any trouble with the IRS

@Amy L. Pagels I really hope there is too, please report back! While I can show active involvement, I don't think I can make a case that I would be the main person in charge since I won't be managing. 

Quote from @Michael Baum:

On the material participation, it doesn't mean just management. Here are the rules around material participation. If you just talk to guests, alter calendars etc, you might not meet the requirements.

https://www.irs.com/en/article...

This is the rude awakening I had this week talking with CPAs. Seems very tough to offset W2 income if you are not a RE professional and are above the income threshold (which you probably are if you are an investor). 

Quote from @Brant Jones:

Exactly @Jon Martin!

I am looking specifically at Morro Bay for a MTR since STRs are nearly impossible to operate thanks to the new Coastal Commission rules that went into effect. When not rented, we would use it for extended weekend getaways. It is a bit of a drive from the larger hospitals in the area (SLO, Atascadero, etc.) but I am hoping that being at the beach when not at work will be a draw for traveling professionals and digital nomads.

What trends are you seeing in the city related to MTRs?

 Hi @Brant Jones I haven't really asked around in person but the stats look pretty good for occupancy https://www.furnishedfinder.co...

791 out of 19K+ cities is pretty solid, around the top 5% mark. Seeing a lot of options (~30) starting the 1st of the new year, and if you allow pets it narrows significantly. Bump it up to Dec 1st and the numbers halve, and summer should be pretty easy to book. 

That said after looking at some comps I'm not super impressed with the revenue compared to LTR. My 2/1 could probably rent for $2.5-3K as an LTR and the tenant would pick up the utilities. Water bills are insane here ($220+ for 2 people with minimal outdoor watering), so all in with internet, gas, trash and electricity that's roughly $500 month. Buying in at today's prices and rates doesn't seem all that lucrative. 

Do you have a link for the recent ruling? Depending on the penalty you could always chance it during high season and go back to MTR as needed. From what I can tell the fine is relatively small. 

Quote from @Brant Jones:

Hi @Micah Smith,

Is your MTR in SLO or the surrounding area? I am selfishly asking as I am about to submit an offer this week on a property in a nearby beach city. :-)

-Brant

Asking for a friend! Lol

Morro Bay resident here, happy to answer any questions about the surrounding areas.