All Forum Posts by: Jon Martin

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. 

Looking at surrounding home values is a big one. 

Also like it when I a 1 bath with a large laundry room- makes for an easy(er) bathroom conversion. 

Quote from @Kyle H.:

@Adrien Abundes

With any average there are variables. I am way above the occupancy #s but most of my rentals are small 1 BRs and most would come in below that average $. I do all of my proformas at 55% occupancy and always suggest that # for any one looking at STRs. I think the 15% rule is a pretty good starting point for the $ end of things, and there are occasionally MLS deals here that will pencil out.

@Kyle H. Do you find with Bryson that you want to be in town and walking distance, or do renters prefer the rural experience? Is there a number of minutes from town where it becomes too rural? 

Thanks for your insights

Congrats! BTW your link is to all of the listings in 29 Palms, not sure if you meant to link your own property?

Beautiful country, great infrastructure (by developing world standards), friendly people, easy access to the US. Plenty of upside, but I have no idea about the legal aspects of buying RE and living there (property rights, Visas, etc)

Quote from @Luka Milicevic:

My bigger question is how do you find what would be a high appreciation market

Look to where people are moving, whether those are retirees or high paid remote workers. Especially those cashing out of traditionally high appreciation markets (NYC, CA). Look for cities that could be the next Nashville or Austin where the median price is on the lower side. Those places have far more upside to grow in comparison to the already expensive markets that are already close to maxed out. That's what led me to Greenville SC. 

Disclaimer: Amateur investor opinion here. 

Michigan native here. There's no reason to look at places like Grand Haven or Saugatuck if you aren't going after the beach crowd. Even if you are, the price to be close to the beach in towns along Lake Michigan is astronomical. Lots of big money from Chicago. The further north or east you go, the more value you get. 

If you want to cater to the inland stream and hunter crowd, then your options are vast. Look for places that are easily accessed from the highway from the places that you expect your market to come from that also have decent amenities. Also agree with @Michael Baum about seeing what places the blogs are talking about.