All Forum Posts by: Konstantin Ginzburg

 That is great to hear. I agree with you that both the regulations on STRs and the nonstop rising insurance rates in New Orleans, make finding a property in this city very difficult. I know what you mean by feeling lucky to get the deal you did. I feel the same about my property. We looked at endless houses and were extremely particular on which one we jumped onto. We knew that regulation on STRs was always possible so we made sure that the property we bought would be able to cash flow as a long term rental property if we needed to shift gears. For now our plan is to do everything we can to obtain a permit in July. To the best of our knowledge, there is only one other property on our block with a permit so that should mean that one of us is able to get the first permit while the other one will hopefully still be able to get the "safety valve" permit. 

Colorado is a gorgeous area and one of the places I am interested with in the future. For now, I am only getting properties within driving distance of me but once I am completely comfortable with local management, I would like give long distance investing a try. Colorado, Arizona, Montana, and Maine are all areas I would be interested in investing in. 

 Welcome to Real Estate Investing. This is an excellent source to learn about all aspects of the industry. If you have any specific questions, feel free to post them on this forum. The members here are quick to answer any and all questions you have. I look forward to connecting and answering any questions that I can. 

 What this essentially means is that a lot of owners purchased a large amounts of properties that required low or no down payments. The focus at the time, was to acquire as many properties as possible and since very little down payment was required, it was easy to scale quickly. The downside to this, is a low down payment also means that the monthly payment is going to be larger. As long as the revenue covered the expenses, this system worked but another problem came from the fact that a lot of these loans had adjustable interest rates. Once these loans reset, the revenues were now lower than the expenses. This led to a sell off of properties and since the sell off came in scale it caused property values to rapidly decrease. Since a lot of these loans had low down payments, the situation was made worse because the sellers had no or limited equity in the property so when the houses were sold, they were forced to take a large loss on the properties. The full story is more complicated but that is a short summary of some of the major factors that caused individuals to get crushed in 2008. 

My advice would be to aim for a house to house-hack rather than a condo, even if it means you need to wait another year or two to do. There are a few downsides to investing in a condo with the primary ones being HOA fees and regulations. HOA fees tend to consistently increase each year which means that this will be anther expense that needs to be considered that will affect your long-term rate of return. The condo HOA can also dictate the terms of any lease you sign with a tenant and these rules can be changed at any time. I have heard of condos banning STR rentals already. While not as common, I have heard of the occasional (although rare) instance of a condo banning rental units in general in order to prevent a "transient feel" in the condo. As you have said, price appreciation is also higher with a home compared with a condo.

My best advice would be to try to find a multi-family property to house-hack if they are available in our area rather than a single family home. House hacking a single family home is an option but rent for a single bedroom typically going to be less than for a fully independent unit. Since the units are separate, you will also be able to maintain your privacy and create a clear separation between you and your tenants that is harder to do when houses hacking a single family home. This way, it will be simpler to maintain both a personal quality of life as well an initial step into real estate investing as a business/investment venture. 

@James Antin Congrats on your property and best of luck with the upcoming regulatory changes in the city. I am also an STR owner in New Orleans. I would love to connect and exchange notes sometime if you are open to it.

@Braden Smith We are currently in the same situation. We have an STR unit in Uptown that we have stopped taking bookings for past August 31st and are beginning to advertise as a medium term rental with a move in date of September 1st. The new permit system will go live on July 1st and even though that 2 month period between the opening of the system and the end of the "grace period" means that the city is hoping to issue all new permits in time; I don't have an overwhelming amount of faith in the city being able to do this. The last time we acquired our license, it took nearly 2 months of back and forth and frequent calls to the zoning board to acquire the permit. Now, they will be trying to sort through a flood of license requests all coming through at the same time and I have severe doubts that the city will be able to efficiently complete this in the 2 month window they are giving themselves. Especially with their "safety valve" addendum that is still not clearly defined or outlined. My main hope at this point is to be able to have a permit prior to the beginning of Mardi Gras season and use mid-term until then.

What strategies are you implementing with the upcoming changes to your STRs in the city? Would love to hear alternate ideas that we can incorporate in our property. 

Welcome to the real estate industry. Good luck; I hope you are able to meet your goals. From personal experience, I started a similar journey with my wife less than 2 years ago and are very happy that we made the choice to do so. There are definitely ups and downs but I would say the ups have far outweighed the downs so far. 

I manage my own STR, however my STR is one unit of a building that I also live in so self-management is much simpler in this case. You have most of the tasks accounted for in your list; the only thing I would likely add is someone to look for and perform maintenance on the property so that small things can be caught and remedied early before they escalate. You can shift some of that responsibility to your cleaning team but keep in mind, if they do not have any maintenance training; they may not be able to catch everything during their cleaning. The other thing that you would need to take responsibility for is marketing and guest interactions if you self-manage; both of those can be done remotely though. You mentioned you are in a vacation town, so I am assuming there will be a fair amount of competition in that market so creating a marketing plan to make your property standout and encourage guests to book with you rather than a competitor will also be something that you will need to do. Once a guest does inquire about your property; it will also be up to you to answer any of their questions and provide a welcoming introduction. I know there are programs that are able to auto-respond but I do not have any personal experience with those so I can't make any comments regarding it. Best of luck on your new STR!!!!

I have had a few MTR tenants who stayed for a few months while their home was being remodeled. I had another stay for a few months because they were taking a summer semester course. A third option I have heard of is insurance adjusters needing a place to rent for a few months following a natural disaster in a region.