All Forum Posts by: Matt Romano

Hey Lindsey. Welcome to BP. I live in Warren RI (neighboring town to Bristol) and can say that the Airbnb / STR market is extremely strong here during the summer months. The East Bay, Warren & Bristol in particular, have become pretty touristy areas over the years.

If you go on Airbnb, you'll see that there's quiet a few STR's in both zip codes 02809 (Bristol) and 02885 (Warren).

A few investors that I know, will rent out their Bristol units on Airbnb during peak season (May through August), and then rent to RWU (Roger Williams University) students as a furnished rental during the academic year.  This is a strategy that I'm also going to be trying with one of my units this summer.  

The few investors in the area I know that do STR year round, instead of only seasonally, see an increase in vacancy during the winter months, but not nearly what you might expect.

Let me know if you'd like to connect further, as I'm a beginner in the STR space, but am leaning towards it over LTR for my overall investing strategy moving forward!
 

Hey Max! Also not a STR expert here, but always happy to network / mastermind ideas with other local investors. As Anthony said, it seems very much dependent on the specific Town / City in question.

With STR's still being relatively "new" in terms of the tourism market, it has been quite unregulated at the state level. However, there stands a good chance that could change.

The Bill that was vetoed by Gov. McKee last year is actually in the House tonight with an attempt to override it.  So that will be interesting to see how it pans out.

The cash flow potential from STR's in certain areas makes it's undoubtably an attractive option for many investors (myself included). But I do think it's important to keep these potential changes in mind if STR is a long term investment strategy of yours.

Best of luck, and Happy Investing! 

 

Hey Jaston.  I know, it's been a while! Glad to hear you're doing well and already working on acquiring your second investment property! 

I've never seen a situation where the current landlord successfully raises rents immediately before selling.  But most of my experience comes from on market deals, where even if a buyer made that request, there would be plenty of buyers willing to take the property as is and deal with it themselves.  I wouldn't necessarily count on the landlord increasing rent prior to sale. After all, if it's something they were willing to do, I'm assuming they would've already done it to increase their profit over the years.  There are ways to go about it once you've taken possession of the property yourself. It's also going to largely depend on if the current tenants are on leases that have them "locked in" at a certain rental amount. Or if they're "month-to-month". Regardless, if it's the latter, you're going to want to have your own leases drafted once you take ownership. And if it's not, those leases will be transferred with the property, and valid until the dates within. 

If the garage can in fact rent for $1000/mo, thats definitely some solid bonus income! 

Keep us posted with this one and how it goes! Best of luck! 

Hey Jaston! I agree with the above posters, and wouldn't bank on the likeliness of being able to convert the basement to a 5th unit.  It appears that there's definitely room for some rent increase though.  Especially if the current tenants have been there for many years and haven't been brought up to the current market rent. In my experience, 1 Beds in EP should be able to rent out for at least $1000 / mo, and even more since utilities are included.

If I were you, I'd call the utility companies, Water, and Gas (if applicable) to get accurate averages to factor into your expenses in helping determine if this makes sense or not.  

Regarding the 3 car garage, not sure what the use would be (business, storage, etc).  But The typical rate I've been able to achieve for garage rentals is between $100-$150 per stall.  I have a 3 car garage that I rent out on my property (for storage only) and collect $400 / mo from 1 tenant utilizing the entire space for storage. It's nice bonus income.  

Hope this helps a bit! And good luck! Let us know how you make out! 

I've used the LifeProof LVP flooring for a few projects and I love it.  They sell it at Home Depot, and it's seems extremely durable so far.  I even used it for a kitchen floor that was far from level, and it's holding up great! Falls within your price range per sq/ft too.  I agree with others though, despite what you might think, darker colors will almost always show dirt more.  It's like a car, black cars show EVERYTHING, whereas white, silver, and tan allow you to get away with much less frequent car washes haha!  

@Raj G.Absolutely! It’s definitely tougher to find a good deal in this market. It’s always wise to be cautious, though. I’m a conservative investor, and encourage any new investor to be as well. Now is NOT the time to be fudging the numbers. But, if it makes sense, then it makes dollars ;) 

@Raj G. I have to respectfully disagree.  If there is an actual deal to pull the trigger on, why would you wait? Lets say someone is paying rent at $1800 / mo (about the average here in Rhode Island).  And they want to "wait a year" because they are afraid of a market crash.  In that year period they would've spent $21,600 on rent.  That could've been used as a sizable down payment, or to fund some rehab work on their purchase.  Not to mention, with getting locked in at an interest rate sub 3% right now, the money is practically free. If the market does soften a bit, I can't help but to think that the interest rates are going to have to increase at least a significant amount in comparison to where they are now.  So it's relative. 

A lot of unique perspectives to this topic though, very interesting to hear everyones input.  

I agree with many of the other comments here. The best time is always "Now", especially in regards to pulling the trigger on you first deal.  Getting the first hand experience as a homeowner and landlord will be far more valuable than the deal itself.  Will the market "crash" in 6 months? 12? 18? 24? Maybe it will.  The truth is, no one really knows.  Just like we didn't know the world would shut down 7 months ago, and be changed forever.  However, if you're currently paying rent somewhere, and building someone else's wealth, and you want to purchase Real Estate as a long term investment strategy through rental properties, then why would you wait? Despite the heat of the market right now, if you find a property that makes sense, to which you can offset your living expenses, and have cash flow later as an occupied rental, the answer seems obvious to me! :) Good luck and happy Investing to you!  

This can definitely be a tricky one in my opinion.  Typically the more variables, the higher chance of an unexpected turnover.  I'm assuming this rental is at least a 3 bed unit? Which attracts families in most cases. 

Have you had a lot of other interest in the unit? Personally I would continue to show it and look for a more seemingly stable situation with renters.  

When I lease out units for myself, or for other landlords, I use the bigger pockets "Potential tenant phone questionnaire" before showing it to ANYONE who inquires.  You wouldn't believe how easy it is to weed people out just from a simple phone call.  If they aren't willing to hop on a phone call for a quick pre screen, they aren't someone I'd want to rent to anyway.  And you can find out a LOT from a few simple questions. 

I'd be happy to share with you my method of doing this if you'd like.  Just shoot me a message!

Otherwise, good luck with this turnover! :)

 

Hey Andrew.  I agree that it seems that a correction would be right around the corner.  But there's a lot of other factors that show thats likely not going to happen as quick as we might think.

The biggest factor I believe, is the massive under-supply and over-demand.  Which is causing the huge price spikes in most markets.  Combined with all time low interest rates, buyers are often willing to "over pay" (much more that list price at least) to beat other offers.

It's a very interesting time, to say the least.  And if anything, I feel that the effects from the mortgage forbearance, and now the eviction moratorium are going to be seen more like 12-18 months from now (Just my speculation).  With commercial RE suffering the most, (retail, small shops, restaurants, etc).  

Will there be a wave of foreclosures and short sales like we saw 11 years ago? I'm not sure. I'd argue probably yes. But we do know the prices can't keep going up forever.  And I do believe this pandemic, in one way or another, is going to be the cause for our next correction. 

Stay safe and happy investing! :)