All Forum Posts by: Kenneth Rolfe

@Michael Baum I hate to bombard you, but I’m going to jump on this band wagon as well.  Would you mind sending a copy my way?

Kenny

I don't know your situation, but have you considered self managing? There are a lot of resources to help you do it. Im a newbie to STR and just closed on my first property a month ago. We decided to self manage and so far it's going really well!

We did our homework and still learning with each thing that comes up, it might be worth considering.

100% agree with all of the comments made regarding abiding by the rules!  And I’m with @Luke Carl, call the city and tell them what you’re planning to do.  Come prepared with questions.  This is a business, so look at every obstacle and try to come up with a solution (not to be confused with a short cut!).  I recently purchased a short term rental and ran into a similar regulation that required the owner or an agent to live within a certain distance from the property. I do not meet that requirement, but before I gave up on the area I did some homework and found a cleaning company that is willing to act as the agent.  I ran this by the city and they confirmed this would satisfy the requirement so I moved forward and found a property.

If you like a specific area, do your due diligence and if it works out great!  If not, move onto the next area.

Good Luck!

I can see both sides on this discussion.  There are valid concerns out there that can and likely will be addressed, but I don’t think it is as extremely detrimental as it is often made out to be.  @Bruce Woodruff my experience in launching our first STR a couple weeks ago was the same with the neighbors. I was worried how they would respond, but they were actually happy we would be setting it up as a vacation rental with the point they made being that they knew it would be well kept on a regular basis. And I agree there is a major difference between an STR and a hotel, which is actually why a lot of people choose them over the hotel. They're looking for a nice place to stay that feels more like home.

I think the issue is when you get those few bad eggs. But just like not every landlord is a slumlord… not every STR is the problem some people expect it to be.

If you haven’t already done so, I would reach out to a property manager to get insight on how the townhouses in that area compare to single family houses when it comes to rental demand.

You should also be able to get insight from your realtor on how townhouses appreciate compared to single family houses in the area historically.  

While I would say in general it’s typically better to go with a single family home if you can, this can be very specific to the area so best to get local expertise.

At the end of the day it sounds like you need to just decide what your primary focus is for this property.  If it is to find a place you love to live in and will work long term as an investment you might make one decision, if it is truly to maximize your investment return, it might be a different answer.  But first you need to do your due diligence with those goals in mind.

Good Luck!

I'm no expert as we just closed on our first STR last week (we should actually be going live tonight!), but from what I've researched here are some things that are supposed to help:

1) Good reviews

2) Good scoring on your response rates to inquiries

3) Be an active host!  Update your pricing regularly, update your listing regularly.  When Airbnb sees activity it interprets that as a host being active and the algorithm then gives more confidence to the accuracy of your listing.

4) Enable instant book.  Airbnb wants guests booking quickly.

Again, I’m just getting started and haven’t proven any of these yet so take it for what it’s worth.  Good luck!

Quote from @Andreas Thuresson:

@Kenneth Rolfe I’m interested in hearing more about the Door County investment.

I'm currently looking for a lake STR in Wisconsin and would love to hear about your investment up there.

Thanks

Andreas

@Andreas Thuresson  I would be happy to discuss this further.  We actually close on it on Monday so we’re flying out there to get it all set up and ready to go next week!  Feel free to reach out to me directly.

Quote from @Eric James:

Quote from @Russell Brazil:

37% of the inflation index is a housing component, and the largest component of the index.  So essentially rising real eatate prices are the definition of inflation.

Real estate isn't purchased at a steady position however. It is typically purchased at a leveraged position. So of you are at a 4-1 leveraged position (20% down, 80% LTV), then you out perform inflation by a factor of 4, before even counting in rent or debt pay down. If you bought in at 3% down, you are at a 33.33-1 leveraged position and you beat inflation by a factor of 33.33 times...or a return of 3,333% per year versus inflation.

 That's correct. Except you're not including the cost of the financing. For example, if you're paying 5% interest on the financing. You're gain from leverage is only the difference between financing costs and inflation.

As long as you’re cash flow positive, the financing component should be offset.  This could be applicable to your primary residence though, but then you could argue the need to compare those expenses to what your expenses would be if you didn’t own the property… which again would likely offset the financing cost.

Hello @Account Closed.  She does property management and real estate sales in the southeast part of Wisconsin.  I have not purchased anything through her, but we connected last year when I was looking in the area and she was very helpful to me.  Ultimately I decided to purchase a short term rental in door county which was further north than Corina covers.  I could give you contact info for my agent there as well, she has been very helpful and knowledgeable of the area.  She’s just not on Bigger Pockets or I would tag her as well. DM me if you want to connect about anything else.  Good Luck!

I'm no expert so take this with a grain of salt, but I'll say I've missed out on a lot of money sitting on the sidelines. I'm closing on my first STR on Monday. I'm nervous, anxious and excited. Worried about the possibility of losing money… sure, but the numbers make sense at the purchase price and terms I'm buying at so I'm moving forward.

If things go according to plan, I won’t have any intentions of selling anytime soon so a downturn housing prices shouldn’t impact things as it should bounce back long term.  Hope for the best, plan for the worst and if things still make sense I say move forward.  And hey, maybe a decrease in prices will help me get into the next one :-).

Good luck as you work through your decision!