All Forum Posts by: Matt Rutter

Hi Everyone - we have a MTR in Memphis TN and are looking for clarification / advice on the rental license from others who have MTR in the area.

I see that the Memphis requires a STR permit, but they define a STR as "rented out fully or partially for a fee for a period of less than 30 consecutive days" which doesn't apply to MTR for 30+ days. Since we will be renting for 30 day minimums through our property management company we fall outside of that scope. Am I thinking about this the right way?

It also looks like this regulation is not applicable to properties used as STR rentals prior to July 1, 2023. Does this only apply to properties that previously have a license or any property before that date can continue? ie. It's only after July 1 that you need to apply for a license.

Additionally, if we have friends or family that want to use our MTR between bookings does this now put us in STR territory?

I'm not trying to find loop holes and want to operate "above board," but some of the language is slightly confusing as to what would or wouldn't apply here. Yes, I suppose it would be easier to file for the inspection & application to cover our bases, but it looks like the initial application rate is $300 so I guess we're ultimately trying to determine what the best course of action is given our current situation.

Any advice would be appreciated.

NREIG does that coverage too. The property quote I got was $130k coverage for $1325 at a $10k deductible. But it seems like they specialize in STR, which is why they might be higher.

The NREIG $60k coverage was about $600 with loss of rent and the $200k coverage was about $1700.

I'm leaning more towards $120-130k coverage model after a few more discussions. 

Quote from @Nicole Heasley Beitenman:

Does the HOA have an agent they can recommend? If there's a particular agent who does a lot of business in that specific condo community, they may be able to provide better insight.

 This is a great question and I never thought about this. Thanks for the tip!

My wife & I purchased a vacation condo (also a MTR) in Memphis (1 Bed 1 Bath) approx 1,000 sqft. We haven't had to insure a condo before and are specifically unsure how much coverage we need. 

I've heard of the 20% rule (20% coverage of purchase price). This would put us at $45k, but our agenda minimum is $60k, 2hich would be ~$25%. I've also heard cover the loan amount ($191k), but that seems excessive. 

I realize this isn't an exact science, but I was hoping for some community input to make sure we get the appropriate coverage. 

Hey all,

We have a vacation condo that we are planning to rent out 75% of the time. 

We haven't had to insure a condo before, and it's a bit confusing. We were initially quoted property dwelling coverage of $60k for a 1,000 sqft condo through NREIG. After speaking to an agent they said that it would be better to insure the mortgage loan value for property dwelling of $191k.

I'm looking for advice whether this is a best practice or if there are other tips to dial in this insurance to cover our needs in the event something happens to our unit or the whole building. It's hard to understand what our insurance woukd cover and what the buildings would. 

Thanks! 

Hello! We're exploring property management companies for a property in Memphis. We would be using this property for our own use, but while we are not there would rent it for monthly minimums. 

We'd be looking for simple services such as booking, communication with tenants, and turn-over. We realize that we could probably do this on our own eventually, but since this is a new property and we are out of state it would save us piece of mind to outsource this for the time being.

Any recommendations would be apprecaited.

My wife & I are looking to purchase an apartment that we can use in Downtown Memphis when we visit, but also use as a short-term rental to help provide supplemental income when we aren't there (Airbnb, private website, etc). Ideally we're looking for something Downtown, South Main, or the Pinch District.

We're seeing a lot of units listed on Airbnb, however, when we look at units in the same or surrounding properties we're seeing that a majority of the condo associations require at least a 6 month leases.

Clearly people are listing their places on Airbnb so I'm wondering how they're getting around this. The obvious answer is they either they aren't telling the condo association or the condo association / property management doesn't actually care enough to take action. 

We haven't had experience with a condo before so I'm looking to hear from others who have invest in either a condo, Memphis, or both. What action can a condo association take if you are "caught" renting your apartment for a shorter timeframe?

Originally posted by @Federico Gutierrez:

Can we get specifics about the property? OR am I missing it?

What kind of commercial property is this? How many units. Where is it located?

Have you looked in the area to compare like for like properties and seen how much those properties are being assessed for?

It's a quadruplex in SoLo of Ohio City. Comps for 2018 and 2019 run from $200K-285K.

Originally posted by @Gwen Fyfe:

Did you actually overpay for the property? Purchasing it for what you think it should be worth in 10-15 years makes no sense, especially when you have that inspection report with a list of all the things that need to be fixed.

If I were the judge here, I'd say... Okay, you paid $345k knowing about all these structural issues? Great, assessed value is set at $345k and I look forward to raising it further when you've completed all the repairs in a few years.

Fair point. The notion of over payment is subjective based on opinion. I may think it's fair, but someone may say, "you paid that much?" or vice versus. All in all that point probably doesn't carry much weight.

Our rental property has 2 complaints filed against it by Cleveland Metropolitan School District for 2018 and 2019 and we have an initial hearing at the end of the month. What is the best way to navigate this hearing?

A little background: We received 2 back-to-back notices from the Cuyahoga County Board of Revisions that a complaint was filed against our rental property for years 2018 and 2019 by the Cleveland Metropolitan School District. It seems a little egregious that they are doing this so far back and every year outside of the county's assessments every 3 years.

The Cleveland Metropolitan School District filed a similar complaint with the previous owner in 2017 and they settled on a value of $218,400.

We purchased the property in 2018 for $345,000 and Cleveland Metropolitan School District's opinion is the property is worth market value for what it sold for. The reason we are receiving one hearing for both complaints is because they are so behind in general and then COVID hit that they are just getting to these now.

We need to submit our evidence 7 days in advance of the hearing and I've heard the best course of action is stick to the facts, and later appeal if needed. Some evidence I was planning to submit and talk to for the hearing are:
- Independent appraisals that were certified by the State of Ohio were conducted at the beginning of 2018 support this Market Value as $218,400.
- Comparable Property Values for similar quadruplexes that have sold between 2018 - 2019 in the surrounding area are right within line of the previous Market Value of $218,400 and have remained consistent year-to-date.
- We overpaid for this property with what we believed the long-term value of what the property should be valued at in 10-15 years rather than what it currently was.
- We also conducted a home inspection when purchasing the property that lists interior and exterior photos, as well as a detailed list of everything that was currently degrading the value of the property, including several structural issues that would need to be addressed in order to get the property to market value that we were going to submit as evidence as well.

If anyone has any experience or other thoughts that would help us reduce this tax increase we would love to hear an input.