All Forum Posts by: Miguel Del Mazo

These are among our favorite residents to host. Insurance relocation rents are often capped (at least in our area) to be 1% of the insured value of the affected property per month. They will not offer that (instead relying on your advertised rate), but they will be willing to pay what you're asking without fuss as long as it is below that high threshold. The companies we've interacted with have all been very professional, and they have appreciated being treated respectfully and professionally in return. 

Some have been willing to use our lease (through Avail.co) while others have wanted to use their own. Security deposits have been paid by the resident family half of the time and the relocation company half the time. 

One perk with these companies is that they often extend the lease as construction timelines are notoriously difficult to estimate. We've had luck where if the family is able to move back in to their home earlier than expected, the relocation company has been OK with us looking for new residents without the company requesting a refund for the overbooked days. We always get that permission in writing, though, to cover our bases.

All in all, I recommend nurturing these relationships as these are among the best clients to serve in the MTR space.

I think the idea of living in the unpermitted area is a great idea. The challenge is convincing one's partner to move into it :)

I agree with the above. Great photos make a world of difference in providing confidence for your potential resident. Video is even better, if professionally done.

Most of our travelers that are coming from any distance are happy enough for great pictures and good customer service to rent.

The people who tend to want a tour are usually already in town at another rental and aren't happy there for some reason or another. They are asking to see the space so they don't wind up jumping from the frying pan to the fire. We are local, so we try to accommodate requests to see our units, but realistically, with vacancy so low, it's hard to do showings. If we can't show, usually just talking to the potential resident and taking the time to assure them that we aren't scammers or slumlords is enough to get their commitment to rent.

It sounds like you and your wife are in a tough spot.  Take the following with a grain of salt, as I am not a lawyer, nor am I in your area. You may have a recourse if the listing agent falsely claimed that the unit was permitted. Talk to your agent to get a little more information about this.

I agree that if the unit is not permitted to be rented on its own, then it's probably best that you don't rent on any platform illegally.

However, if you are able to allow access to the main part of the house, you may be able to rent the space as a room in a home depending on local laws and ordinances. Padsplit (never used it myself) may be an option.

What I would try is to look for a family member who wants to have some privacy, and is willing to still come inside the main house (and pay some rent), or try to get the space permitted.

Great post.  I would add that this is a geat time to reassess not only insurance coverage but any recurring expense as well as maintenance needs. Has the price of internet creeped up while you were in the home? Renegotiate it. Who is going to change the air filters in the HVAC system or mow the lawn? You will likely be losing the right to a homestead exemption, so let your local municipality know. 

If you've enjoyed a lot of appreciation in the value of your primary home, you may want to start a timer to sell before losing the "lived in the house for 2 of the last 5 years" capital gains exemption (limited; not infinite, but big).  

What important business mail will be coming to what will now be your old address? Can you go ahead and change that (think address of record for LLCs or bills for other properties).

Make sure any HOA and the local government allows for your home as an MTR.

1 last point to add to Jamie's first point: if you can, take a video tour of the home and what you're leaving behind. Insurance companies appreciate that evidence if a claim were to be made. 

 I believe the answer is "no".

*I am not a CPA, tax professional or a lawyer*

I cannot give legal advice, so all of my advice is illegal advice.

As far as I know, section 469 of the tax code is what allows for the "STR loophole". It specifically calls out stays of less than 7 days, though. There is not an equivalent version for MTRs.

https://www.airdna.co/blog/short-term-rental-tax-loophole

It sounds like you are already doing move-ins perfectly with photo evidence and proper documentation. We don't use a form, but it's not a terrible idea. Referencing another recent post, there's not a great software solution that I am aware of for on-boarding a new MTR resident.

If you aren't already, I would make sure you disclose to a potential resident any relevant issues that are endemic to a unit as early as possible. For instance, if the neighboring unit has a shut-in chain-smoker, or the house has railroad tracks behind it, it is definitely better to let a lead know and lose them than to not disclose, upset them and lose them (after they leave a nasty review).

I'd agree with Jonathan that even late complaints need to be taken seriously, and barring some obvious malfeasance, I would just take the word of the resident and fix the issue. I've been burned by this once before, but it's just less stress on me with this informal policy.

Wait, using my phone and my memory isn't the ideal?

We use Avail.co to do the background checks, prepare and store leases, and to offer the required renter's insurance policy.

Stessa.com does a good enough job acting as a free substitute for Quickbooks.

AirBnB and Furnishedfinder.com for listing the space (though I will be trying MiniStays soon).  VRBO was not a great experience.

For a single unit, I wouldn't sweat the details too much unless you plan on expanding quickly. Getting a few tenants a year really doesn't demand perfect systems. With that said, I kind of wish we had built as we grew a little earlier because retrofitting has been a bit of a pain. :)

Best of luck.

With that said, I think you've shown a lot of grit in holding your own on the forums. I don't think you've been 100% right, nor have the more vocal detractors been spot on with everything either.

I advise that you don't give up on MTR as a strategy, if it appeals to you. If you have any questions, you can DM me, and i'll try and answer as I am able, in my limited way.