All Forum Posts by: Liezel Pineda

The headache of construction and major repairs from afar personally isn't something I would embark on.  Whoever told you that finding an honorable contractor is not an easy task gave you some sound advice.  Although there are definitely a ton of people out there who work with integrity, it'll be a little more difficult to validate that if you are miles and miles away.  If, however, you plan to be hands on and the location is feasible enough for you to really keep an eye on everything that's going on, then it may be a fun endeavor to do (depending on how much energy you have allotted for this).  

I get how overwhelming all the info is.  If you're really getting into something and trying to do it right... it's a FLOOD of information and SO easy to get overwhelmed.  I'd get in touch with seasoned investors in your local area if you can.  Their input would be invaluable because many of them have probably been in the same position that you're in now, and may be able to give you some insight that puts all this information into a better perspective.  

Best of luck in your investment(s)!!!

How many bedrooms is this rental property?  If it's a 1 or two bedroom home, I'd probably elect to put a king in the bedroom if it fits.  Like @John Mausteller said, most of the time will be spent in the common areas anyway.  If you're talking about a larger rental though, where you potentially have more than one or two groups occupying the home, occupants will likely retreat to their bedrooms a little more than they would if it was just a small family or couple.  In this case, you'd want the bedroom to be a little more accommodating in terms of being more than just sleeping space (so I'd go for a queen).  But again, if your occupants/guests will ideally be a couple or small family (1-3 guests), I'd probably opt for the king. (Also, the partial wall opens it up a bit more anyway, so it's much more feasible to do a king in that type of space than, say, a room with full walls all around and 12-14 inches of walking space around the bed.  That would be a bit claustrophobic... and a pain to change sheets.)

Great reminder that the beaches and mountains will be pretty solid even through economic turns. Thanks. This discussion has got me redirecting my focus back to STR again. I've been scouting for multifam in the Bay Area but the numbers are just not hitting the mark for me. Curious to know which other markets might be conservative bet at this time. Any thoughts are welcome!

There are SO many variables to consider in making any type of real estate decision. Purchasing a STR in the Tahoe area in the early 2000s... location was always paramount, however, some of the STR market also has to do with the culture and trends of the time. First consideration was always location because people pay a premium on locations that they desire to be in. Waterfront and downtown areas have always been prime. However, at the time there was also a growing market for something of a hybrid ambiance in these Tahoe homes. People wanted the log cabiny, rustic feel, but also... new, modern, clean... and here's the kicker... a luxury ambiance with outdoor hot tubs, indoor saunas, indoor heated pools. The works. So, even if you didn't have the premium downtown or waterfront location, you could still make bank with these new properties that were being built by the dozens and marketed as luxury vacation rentals. This wave continued for a while until the recession hit and then these STR owners started getting foreclosed left and right. Those who were able to stay were still able to reap the benefits of owning a luxury STR. I didn't really see much of a downturn in rentals, especially for the higher end rentals. Even throughout the Covid pandemic (aside from a period of a few months of lockdown) the rentals held up pretty steadily and maybe even experienced an uptick because people were itching to get out of their homes.

That being said, its a tough balance also, because a lot of these luxury vacation homes were situated in residential neighborhoods in the outskirts of town, where it was supposed to be more remote and serene and quite frankly, residential, and one of the prime struggles that STRs had to struggle with was the growing number of residents who felt encroached upon and ultimately wanted to oust STR rentals.

Another thing that factors into STRs is the local legislation.  This is entirely another can of worms, especially for Tahoe, as developers started to come in and really change the landscape of what Tahoe had been for decades.  There's good and bad, but I think depending on your situation, you could be at the short end of the stick, or you just roll with the punches and make your adjustments accordingly.

There aren't just one or two variables that determine how a rental market is going to perform.  I think that (and I heard this from someone recently) no matter where you choose, take a look at what is working for other STRs in the area, and then do something similar... and a little more, to give yourself a bit of an edge.  

@Karen Margrave said "Once jobs start being lost, it's game over..." And yes, I think it's a bit of a heart stopper because we HAVE seen so many things in the past, but they were largely... waves... that caused ripples in a certain direction...or maybe a couple waves.  Now, though, it's wave after wave, and simultaneous waves coming from all sorts of directions... and the ripples are just not as logical anymore.

I agree with Karen... it's one of those "sit down, buckle up and hold on" times of life.  I just wish I knew the best way to sit down and buckle up!  I am a fish out of water right now.  I'm looking to reinvest (I know it's probably not the most opportune time) but I'm absolutely beside myself trying to determine the best place to put that money.  Any insight from the community would be much appreciated!

Hi Ash - I'm in the same boat... and was ideally considering multifamily in the Bay Area.  I'm looking to reinvest, but like @Bjorn Ahlblad said, cash flow in the Bay Area is hard to come by.  I've slaved over my numbers on several options recently, and haven't come across much that will hit the mark for me.  Another poster also mentioned that "breaking even in the Bay Area is a blessing" and right now, that's a stunningly accurate summary after scouring through my inventory.  That being said... I still see the Bay Area as prime, and if immediate cashflow was not a primary objective for you, I do believe that you'll still see the values appreciate over the long term.  I may be biased because the Bay Area has been home to me forever, so the Bay will always be near and dear to me.  But I am definitely exploring outside of the Bay simply because immediate cash flow is a bit more optimal elsewhere.  There are, of course, a gazillion other variables to consider, and there are always ways to adjust, but if you're looking for significant cash flow - which I probably am leaning more towards, than it'll be quite tough to find in the Bay unless the stars line up for you.

I've run the numbers on a handful of multifamily properties in and around the Bay Area, and Gurbeer is right... breaking even is a win in the Bay Area.  I'm in the same predicament right now.  Looking to re-invest, and was hoping to snag something in the Bay Area because it's always been prime, and appreciation (in most areas in the peninsula) was almost guaranteed.  But there is SO much going on right now, and with so many variables changing in ways that are really all over the board, it's really hard to make the same assumptions that we've been able to make in the past 5-10 years.  In any case, it really depends on what your main objectives are.  Higher cash flow was one of my primary objectives, but in today's turbulent economy, you also want to be a little cautious about focusing solely on one thing when you're narrowing down your property search.  I'm now considering out-of-state options to see if that might be a better bet at this point.  Tons of things to consider, and it helps to have a community to share thoughts and ideas.