All Forum Posts by: R Jun

 My objectives before purchasing a country property was: 1. Fulfill my long time dream of buying a country property and try living that lifestyle. 2. Be a snowbird. 3. STR the property when I wasn't using the property in the spring, summer and fall to generate some passive income.  I bought the property in a LLC and even attained Proper insurance for the property to be used as a part time STR.

Results:

#1 Objective = Accomplished. I purchased an amazing country property at a pretty cheap price. I learned that while I do love country life I also love city life too but I don't want to live a full time country life.

#2 Objective = Accomplished. Snowbird life is great but it is a little worrisome leaving the other house for five months.

#3 Objective = The previous owner did not disclose that the property was infested with small black devil scorpions (non-poisonous but a nuisance). After putting boric acid powder throughout the perimeter inside the house I was able to keep them away for the most part but one or two will show up on occasion and I feel this could hinder my STR success so I aborted the STR plan. Then I figured the amount I spend to keep the paid off property is 7k a year. If I'm not going to STR the property then I would probably be better off selling the property and can make at least 100k in profit before taxes just after year. The interest rates have gone up and the real estate market has drastically changed and I feel that real estate equity in the area will be stagnant for a long time because prior to the "pandemic real estate value surge" this small town had very little to no equity gains in over 15 years. Actually the previous owner, who bought the land and built the home back in 2007, actually lost about $30-40k selling it to me last year. The 9 acre wooded lot next to my land sold for $59k back in 2006 and is not even worth that amount here in 2022, actually, that lot owner wanted to sell it to me for $52k. Although it is a famous historic town and does attract some tourists there are little to no good paying jobs in the area to attract people to move here. Most people who own nice country estates here are retired and it is a second home/vacation home. It costs me about $7k a year to own the full paid off country property and that includes having a neighbor as a property caretaker that cuts the field and checks on the house for the months I'm gone. (He cared for the property for the previous owner as well, only charges $100 a month for each month I'm gone!). The previous owners only used the property two weeks year since they had it built!

So I came to the conclusion that I better cash out now after a year of owning it while the market is at the pinnacle and trending downward in many areas especially this one. I figured after taxes and commission paid that I would be left with roughly $60k to $70k, which is about a 25% or so gain after just owning it after a year which is pretty good and I probably couldn't have done it in the stock market myself which is not good now. That is why I posted on here, to get opinions from experienced investors on what you would do in my situation. However, I left out a very important detail about the scorpions in my original post. 

Thanks to all of your feedback. Btw, the offers I had all fell through mainly because they were contingent on their home selling that hasn't sold yet. The one cash offer bailed on me and bought another property that was closer to a golf course. So I'm back to square one. I think I will just go ahead to continue with the sale since I'm having trouble finding a property manager that deals with STR. I did call someone that does STR in the area and they said they manage the properties themselves and do not know of any property managers in the area. This is what can happen when you did poor research before buying real estate. For some reason I like to learn the hard way but at least I should be able to make profit if the property sells. It is a very unique and stunning property with a like-new custom house where the inspector prior to closing wanted to buy the property if I didn't because it was so well built and hardly even used with a stunning park-like scene surrounding the property .

What would you do in my situation now?

Thanks everybody for the replies but there is one BIG factor to overcome if I keep it as a STR, completely getting rid of the Southern Devil Scorpions, if not, this could cause my STR to fail. However, I believe if I pay a professional to seal up all cracks, caulk, add new door sweeps and garage door seal, etc, I might have a chance at beating them. I did eliminate them for the most part with boric acid on the interior but on occasion one a two creep out of nowhere. These tiny black scorpions are nothing like those big AZ scorpions that are deadly. If anybody has any tips let me know.

 Thanks for sharing your insight. I will do just that tomorrow!

Actually, I did initially have Proper insurance, they are the best from my research. However, because I had encountered the infestation of scorpions after staying at the property over the winter, I had decided not to STR until I could eliminate them, so I switched insurance companies to save money until I can get the pests controlled. I put boric acid powder around the entire perimeter of the inside of the house and it pretty much wiped the scorpions out and kept them from coming back, but then a couple started to emerge but nothing like it was before. Btw, the property has always been sprayed in out by a local pest control company and it never stopped the scorpions, it would kill them but there would lots of them dead all around the house which is not a good look for STR. The boric acid I did myself was much better but I still get the exterior sprayed as well. I need to hire someone to seal every single crack or space around the exterior of the house and foundation, that should be beneficial. If I can just permanently get rid of the scorpions I know this property will do well as a STR. The land and forest is picturesque and majestic.

 What do you all do in AZ to keep them away? Scorpions are prevalent in AZ. I'm sure all it will take is one bad comment about a scorpion to scare everybody else away.

Local pest control companies have been useless when it comes to these black scorpions. The boric acid worked great but one or two scorpions still show up on occasion and I feel it will cause problems with STR.

@WilliamAndreson - I did not get a reply to my answer, just a quote copy of the previous post.

The house has problem with black scorpions on occasion would you still STR it? This is another reason I initially did not STR out of fear a guest will get stung and leave a horrible review and possibly a liability issue. The house had regularly been sprayed by pest control but the scorpions were still a problem. I put boric acid all around inside the house and that seemed to keep them away but on occasion one or two scorpions will come out of nowhere. Still do STR or would you sell it while the getting is good?

Thanks for your insight. I'm definitely getting a manager. I actually set up the property for STR initially but changed my mind because I didn't want to deal with stress and liability and the house was so immaculate. Part of me still says just sell it and make the 70k after all expenses and taxes and move on to flip another property. I did get to enjoy the property all last winter (5 months!) and enjoyed the country life. So getting paid 103k (after commission paid) but before taxes for just owning the property for one year is pretty good to me ( no renovations made, just added 10k in furniture). I've only owned it one year. One issue that I'm concerned about is the previous owner did not tell me the house had an infestation of black scorpions. I was able to get rid of most of them with boric acid put all throughout the perimeter inside the house but every now and then one or two will appear. I also had the exterior of the home sprayed by a professional but those little suckers will appear out of nowhere like a ghost on a rare occasion. If a guest sees one or gets stung they will certainly leave a horrible review and ask for their money back or try to sue. What do you think? Still keep it or sell while this market is good for sellers? I got the property super cheap with a cash deal and the house is like new with gorgeous land but scorpions are a concern that worries me. Would you still keep it and STR?

Thanks to everybody for the replies, they have helped greatly. 

Btw, I bought the property in cash. I'm not strapped for cash but I have no experience doing a short term rental. I do have experience with regular long term renting and it was a horrible experience but that was to be expected with section 8 tenants who tried their best to destroy my former property. However, I'm sorry I sold that rental property in Colorado Springs because it is now worth five times more than what I sold it at and renting at a much higher rate.. I figure short term renting will be much less chance of the property being destroyed. 

Your posts have motivated me to keep the property and try short term renting it and I'll continue to use it as my winter retreat. Now I just have to do some research on how to properly operate the property as a short term rental and execute. I'll start researching on this forum which has some great tips from investors like you all who have experience. Thanks again for the feedback, it was greatly appreciated.

Last year I bought a gorgeous 20 acres country property in a famous small town in the middle of a forest with a 2008 built house in like-new condition. I put the property in a LLC with the intention of using it as a winter home (warmer weather there in the winter) and renting it out AirBNB/VRBO for 5-6 months when I'm not there at my summer main home. However, the real estate market has been so hot since I bought it and it has now gained about $110k (or more) in equity in just a year. So I put it up for sale fully furnished (Spent about $10k on furnishings) just to see what happens and I got multiple offers within a week. I'm conflicted, my heart says keep it and my mind says sell it and make $110k+ profit after just a year because I feel we are at the pinnacle of the market and I sense that the equity will remain pretty stagnant for some years to come judging by past local real estate values through the years prior to the pandemic hot market and now the higher interest rates. I never did short term rent it out yet but I fear it could be more hassle than it is worth, especially since my main home is 12 hours away up North. I would have to hire a property manager which would cut into my profits. There are a few other short term rental homes in the area that seem to do well but don't look nearly as attractive or private as my property.

Question: Would you sell the property now or keep it and AirBNB/Vrbo short term rent it out half the year? Is short term renting worth it when living far away from the rental? As we speak I have offers I have not accepted yet and can back out and take the house off the market. I put it up for sale by flat fee MLS without a seller agent, (2.5% will go to the buyer's agent). Capitol gains tax will be 15%. I'll take home about $60k to $70k after paying commission and taxes which will be about a 25% profit gain. I'm conflicted, any insight would be appreciated. Thanks.