All Forum Posts by: Libbie Grant

It entirely depends on where you live and how high the demand is for STRs. San Diego is one of those markets that gets tons of visitors all the time, and STRs should work great. I live in another such market. Here, everybody who has any sort of property that can legally be turned into an STR does it, because those "too good to be true" numbers are entirely true. STRs make up the bulk of our entire economy in this county (note I said county, not country.... ;) ) and some people's entire income is derived from running STRs. We are closing next week on our first place, a two-unit with a vacation rental permit for one of the units...we have seen the owner's records and the unit cash flows $5000/month in the summertime. Considerably less in the off season, but it evens out over the course of the year and averages out to pay its own mortgage.

Now, that's feasible in this market with the right property. Will it work out that way for every STR? Nope. Much depends on location, but San Diego is a good location for tourism and business travelers alike.

As for why more people don't do it...I'm sure a lot of folks assume it's harder and more draining (physically and financially) than it really is. That's not to say it's a cake walk--of course turning the unit over and dealing with occasional questions/needs from renters will take up some time. But in my conversations with people here who could own STRs but don't, they perceive it as needing an extraordinary amount of time and attention, and they don't want to commit to it.

Rather than educate them in how efficiently one can run such a business, I'm choosing to keep quiet instead and buy up more STRs for myself.

I've had a them a few times as a renter and I actually liked them (surprise!) I wouldn't hesitate to buy a house that had this kind of flooring, personally.

Currently I'm paying $1600 for rent, and this is one of the best deals I've had on rent in a long, long time. This is for a four-bedroom house; in the past I was paying $1775 for a 700-square foot apartment. (We will be closing on our first home next week, though, if all goes well...and our mortgage will be $2200, by the way.)

Rents depend entirely on your location. And whether a person can buy a home yet or not depends on a wide variety of factors, including savings (it's HARD to save up enough money to buy if you live in a high-rent area, and if you can't leave that area because your job is there...well...what should you do?), credit score, employment history, debt to income ratio, etc.

hi, Tristian. I'm also in tiny F.H.! We're going to be taking two trees down from our new property (and planting more, in a place where they won't block the view) so I'll stay in touch with you! We need a tree guy.

We're new to RE too, but let's get together sometime. Maybe we can learn together.

Our place is a two-unit property with a vacation rental permit, so we are holding. It's down on Cattle Point Road, right across from the general store. :)

 I said county economy, not country. What a difference one letter makes. :)

p.s. Why won't the forum let me tag people? This is not my day. Off to the office to get some work done...

@Brandon Sturgill I know! It's a doozy of a situation, isn't it? I'll keep the forum posted if I manage to get any good news from anywhere!

@Jay Hinrichs - Alas, the people who already tried to buy it tried both of our local community banks and neither was willing to extend a mortgage due to the excess of kitchens.

But I do have one thing that the previous potential-buyers might have lacked. I have significant IP assets which I might be able to convince a community bank to accept as collateral. It might convince them to take the "risk" on me. (Ugh, this property seems so low-risk with its two STRs, in a community that lives and dies by the tourism trade...it's just silly to me that they're viewing it as too complicated to lend on!)

Anyway, I guess it's worth talking to the local banks and seeing if they can help me out. I don't know the situation with the previous attempted buyers; maybe their credit wasn't as good or something else was going on that made it all too risky for any lender to take on.

p.s. "My favorite place to have lunch" is how we ended up living here, too! My husband used to be in the Coast Guard and he would stop in at Friday Harbor as often as he could manage to get his crew lunch. He fell in love with it, and I'm pretty flexible so I agreed to it. But now I can't imagine living anywhere else! It's a great little town.

WHY IS THIS SO COMPLICATED?! Arrrrrgh!!!

Thanks for the advice, everybody!

I live in an area that has heavy regulations on STRs. It's annoying, but not the crisis many people think it'll be. The majority of people in my community still make the majority if their income from running STRs, because there is massive demand for it here. The regulations make it irritating sometimes, and you have to check to be sure you're in compliance because they watch you like hawks here, but nobody is going to put the kibosh on it any time soon, considering it'd collapse the county's economy if they eliminated STRs.

It seems to be on the low end of the risk spectrum to me, but I'm new at investing, so take that with a grain of salt!

What I like about it is that even if your "crash pad" idea doesn't work out, most military bases are great markets for family housing. So you could rent it out to one family or convert it to a multi-family unit if your initial idea doesn't work out as planned.

You can find used furniture that's newer and in really great condition on Craigslist if you're patient and check it every day. If you aren't in a huge rush to get the whole place furnished within days, I think you could trim something off your budget there.

I think whether this will work depends on the location of the property. Is it in an area that draws a lot of vacationers? If yes, then go for it. If no, then I agree that you should get your Airbnb feet wet with something more conventional, and something that's more of a "sure thing," like a small condo in a city.

I live in the San Juan Islands, where nearly our entire local economy is driven by vacationers. On the island where I live, we have year-round residents and then we have the vacationers. The population of our island quadruples in the summer due to so many vacationers coming over from the mainland. A location like this, where the location itself is the big draw, is the kind of place where I'd rent out something like an Airstream. In this type of location, nobody can find accommodation at the drop of a hat. If you don't come to the island with reservations already made, you're sleeping in your car (which the sheriff will ticket you for, if he catches you.) Something rustic, like a tiny house or an Airstream, would cash flow great in such a location. In fact, $1000 - $1800 would probably be a very conservative estimate.

But if it's just a chunk of land in the middle of nowhere, and tourists don't have a lot of reason to visit that particular "middle of nowhere," I think even $1000 would be better than you could hope for. What reason do people have to want to go to that location in the first place? Is it scenic? Is there a lot of outdoor recreation in the immediate area that attracts a lot of visitors? Annual festivals or other attractions? If none of those things apply, I doubt it'll turn much profit for you.

Also, keep in mind that STRs are very seasonal in almost every location. The only exception to seasonality may be within the limits of major cities. Cities bring visitors in consistently, year-round, because people travel there for a huge variety of reasons. But outside-the-city locations pretty much only bring in visitors for vacations (which almost always happen June through August), Christmas, and Thanksgiving, with the odd visitor here and there who's celebrating a birthday or anniversary.

What all that means is that you have to plan carefully. If you buy your place and open up shop in the winter, you may not see any cash flow at all, and may be operating in the red, until summer rolls around. Our studio unit on San Juan Island won't cash flow at all October through April, but will make up the difference big-time May through September. However, if you're paying your rent and paying your cleaner to flip units out of your own money, it feels like an eternity to get from October to the start of next year's tourism season.

It's all about the location. If your location doesn't have a strong attraction for visitors, it might not turn out to be the soundest investment. Especially if you can't save a little money by turning over the unit yourself.

Just my two cents!