All Forum Posts by: Kathleen McDowell

 Thank you to ALL the fantastic coffee drinking folks on this forum who helped me make my decision!  I had never heard of a French Press before and have added that along side my drip coffee maker. That way, guests have choice. My property is in North Lake Tahoe, where focus on the environment is key, so I will pass on the K-cups as I had been concerned about the impact.  For those that still want something else, they can head down to the lake and enjoy a brew from our local Java Hut and sip it while enjoying world class views and serenity. 

@Nathan Gesner Thank you so much. The plastic of the cups was weighing on my minds as I hate water bottle and any kind of unnecessary plastic, especially given my home is in a place where everyone is environmentally conscious. I'm going to add a French Press - embarrassing to note I had no idea what one was, and keep my drop coffee maker.  Thanks to everyone on this forum for enlightening this "never had a cup of coffee in my life" lady.

Hello. I own and manage a number 3 bedroom vacation rentals, hosting 6 guests on average.  I don't drink coffee so I struggle to know exactly what guests would prefer.  I have read that the choice of flavors of K cups may be appealing, but am not aware of which tastes better- Keurig or drip. Help me decide on the following and any considerations I am missing. I am not concerned about price, but more focused on 5 star customer experience.  Thanks for your help.

A. Drip Coffee Maker (this is what I have now)

B Keurig Coffee Maker (this is what I have in my small 1 bedroom ABNBs)

3. Duo Keurig that offers both Keurig and Drip

I am not finding much for my clients in the 1% range in SFH. Most opportunities seem to be for those willing and able to add value to a B/C property in order to see it cash flow. Many of my clients have switched to investing in A class areas and assets and improving them and are seeing cash flow after a few years and expect appreciation over time.

Key point - look at cash flow over time given its likely a LT investment.  Forecast realistic rent increases over time and look at cash flow a few years out.

Hi Laura. Im surprised at how many realtors here in PHX don't offer the ABNB stats with the property and/or a proforma. They make buyers agent's reach out and ask for all the info that would be critical for buyers. Tip is to ensure your MLS listing has key words in the search like, STR, AirBNB, investor, etc and include all the data that will help an investor make a decision readily available. Good luck!

Hi Brandon. I think you're wise to consider switching asset classes, as time is money and STRs are anything but passive. Once you deduct the value of time you spent from your returns, they may not look quite as good.  I do think MF could be a good next step for you.  Given you live in the PHX valley, there are opportunities in MF that may be easier for you to manage given their location.  Keep in mind, with a $500,000 budget in PHX, you'll likely be investing in more B and C class neighborhoods and assets (most duplexs and tr-plexs are found in Mesa & PHX). But this is not a bad thing, and usually equates to cash flow, especially if you're open to some value add and are able to raise rents and force appreciate the property. You could likely also self manage a duplex/triplex given it's less work than STRs and you're handling that - which saves you on fees.  Over time, as your portfolio grows, you could hire a PM company. Happy to share typical cap rates I am seeing on MF in PHX if that is a helpful data point as you consider your options.

Hi Brandon.  As the seller, you determine the commission you'll pay to your listing agent, and how much of that commission will go to the buyer's agent.  I always remind my clients you get what you pay for. In my experience, listing agents agreeing to list below 2.5% will not do the job of a top agent, who recognizes their value and will likely expect compensation in the 2.5-3% range.  These agents will provide enough value in sale price to make up for any increase in commission paid out. I always recommend my clients split the listing commissions 50/50 with the buyer's agent.  The buyer's agent does a great deal of work finding properties for their clients and a fair market commission will attract the most buyer's agents and potential buyers.  Getting your RE license is a big commitment of both time and money and you'd only be saving half the commission, as buyer's agent commission would still need to be paid.  My recommendation that would most likely net you the greatest return is to offer no less than 5%, splitting it 2.5% to your listing agent and 2.5% buyers.  In this market, many properties that are listed and not prepped, priced and marketed correctly are sitting for a long time, and ultimately earning the seller much less than if they'd selected an agent based on the value they bring in terms of pricing strategy, staging strategy (repairs, etc) and marketing strategy. On a side note: Totally agree with you on ABNB vs MF.  Here in Scottsdale, we have a number of ABNB investors wanting to get out within a year of purchase due to underestimating the amount of time involved in managing their property. And PMs here typically charge 25%, which makes it challenging to cash flow. Best of luck and let us know what you decide.

Cash flowing properties for Y1 are hard to find. Remember to look at a longer horizon given you will likely hold for the long term. Be sure to put in a realistic forecast for both rent increase over time and property value as well.  You'll likely find that the cash flow improves over time as rent increases and your payment stays the same. The first year or two may be breakeven, but in the end someone else is still paying off your mortgage, which is not a bad thing!

I only use and LLC when I have a good amount of equity built up and therefore 'something to lose'. I hold in the name of the LLC. Had my estate planner move it into LLC after closing.

I have invested in a number of condos in Scottsdale and have good returns. You're thinking the right way - ensuring you have a plan B should the STRs be disallowed in the future. I find the HOA fee on my investments are lower than my pool and yard maintenance on a SFH. I invest ins smaller condos - 1 BRs and it appeals to a mass market. I do LT rentals and have 0 vacancy, always renting before I close and immediately after a tenant's lease expiry. I recommend checking all the financials and CCRS prior to buying and attending/joining the HOA to be well informed in financial strentgh and any changing attitudes on STRs.