All Forum Posts by: Robert Silvernagel

I think 'import' might be misleading because it implies that it's only importing the current bookings (not future reservations). From the posts others have made is sounds like it actually links the calendars so that they automatically get updated in near real-time. Is that the case? I'm looking to add VRBO to what is currently a property listed only on Airbnb. Once I import the VRBO calendar to Airbnb and vice-versa, I should be good to from there on out, right? I don't need to periodically import the calendars to maintain synchronization?

@David Varvaro yeah man I know that's probably a good idea, it just seems to me that it adds another touch point when it comes to communicating between on-island contacts. It's probably not that much additional overhead, but since we're new to managing remotely I figured it might be best to follow the KISS method as we get started. We will likely evolve our strategy once we start to see the numbers play out. If we're consistently profitable and find that the cleaner is not effective in responding to guest needs, then we will not hesitate to go the dedicated on-island agent route. But for the first few months it seems like it will be easier to manage from our side. When we get to that point though I'll be sure to reach out to you!

It's worth noting that we plan to put a little money into the unit to make sure that it shows well and doesn't have that 'dated' look. It seems like a lot of short term rentals don't get updated and that's a key differentiator that we're hoping to take advantage of.

@Neil L. oh man I hadn't heard about that potential tax increase, and those sort of things are exactly what I was hoping to find out from the more seasoned investors on this forum. I guess it's probably not enough to dissuade me from going through with the purchase, but certainly something I should account for in my forecasts. 

We stayed at Maui Banyan the last time we visited Maui and that's actually what got us interested in the Kihei market. Great place! Our unit is a little further north in the Maui Vista complex. We found that its still as walkable as Banyan but at a little more reasonable price point. The lock off doors at Banyan probably play a big factor in the pricing of those units as they offer the ability to rent the units separately. 

For our family's needs the 2BR was worth the extra bump in cost. We're planning to market to small families like ours so we're hoping that angle works out for us. In the worst case scenario that demand is low for a 2/2 we'll have to drop prices to attract people away from the 1BR places. I hope it doesn't come to that, but I guess you have the hard data on that owning one of each. What are your average vacancy rates between the two, if you don't mind me asking?

Thanks @Jaysen Medhurst. So I mean technically I am working for him since I'm the one managing his property for him. The difference is that instead of him collecting all the revenue and paying me my 20%, I am collecting the monies, deducting my fees and rental expenses, and then paying him his ~80%. 

Are you saying we do need to be a business entity to operate this way? Or just that it would be your recommendation? At this point I don't want to overcomplicate the matter, but am just trying to understand what we need to legally operate in this context (it was suggested on one forum that a limited power of attorney might also be a viable solution). As well as what do we need to do from a tax documentation perspective to make sure Uncle Sam gets his cut. 

The reason I suggested the 1099 is because Airbnb will issue us a 1099 since we will be doing more than $15k in business through their platform. We will deduct our expenses/fees from this, and pay the owner with the remainder. The issue is then how do we report that sum of money to the IRS so that it's accounted for on his return (and not ours)? Isn't that what a 1099 is for?

Thanks again!

Hi biggerpockets community! I come to you seeking sage advice yet again. 

So here's my situation. I'm currently handling all management of a friend's downtown Seattle condo via Airbnb while he's living abroad. Things have been going really well, and he's asked if I would help him convert a second unit into an Airbnb from a long-term lease. Since there is significant upside for both him and myself, I willingly obliged and am happy to help with minor repairs and spend the time and money to furnish the unit in preparation for our first guests.

My question for you is what is the best way to handle the expenses associated with all of the costs needed to get the unit ready for Airbnb? We are planning to put up a coat of new paint as well as oversee contractors to replace the worn out carpet (has to be done, it was destroyed by the last tenant). The owner is overseas and so he was hoping that we could take on these expenses ourselves, itemize all expenses associated with preparing the unit, and then deduct those from his future payouts. We are currently handling the airbnb payout directly, and then plan to pay him his 80% cut after our management fee (and all associated expenses) have been accounted for. Can we do this without being a LLC or other business entity? The thought was that we should be able to cut him a 1099 at the end of the year for the revenue he will be bringing in, but neither my wife (an accountant by trade) or myself (software developer) have had experience with this before and don't want to get stuck not being able to expense all of these costs.

Please advise, and thanks in advance!

Rob 

Thanks for the replies everyone! As always, the bigger pockets community is awesome!! @Patrick Franta yeah I'm tracking the taxes and HOA fees separately in the worksheet I provided. I'll be self-managing so I added $100-$200 a month for my on-island agent fee. As for the 14.5% TAT/GET, if I use VRBO for my bookings they will collect that from the guest directly. As far as I can tell Airbnb does not yet offer that capability in Hawaii.

I met with a few agents and cleaners while on island and their feedback was that it should be cash flowing nicely without any major repairs or upgrades. We do plan to make another trip out to redecorate and move a few things around after closing -- little things to increase appeal. 

It sounds like inventory is pretty fixed in the Maui short term rental market, but I'm not sure if that's a safe working assumption for the long term. I guess tourism is an important enough industry there that while they need to limit the short term rentals for local residents, they also need them to provide lower price points for visitors. Is there any concern that the local government would ever ban short term rentals altogether?

Of course there are always 'what-ifs' so you can't get hung up on those. We're planning to moved forward with the purchase and appreciate all the feedback and suggestions. 

@Loren Clive yes we are looking at several options for an on-island agent. At this point in time it seems like it will be most economical and convenient if we use the same provider for cleaning and on-island agent. We plan to go the most cost-effective route initially, and then adjust later as we build more experience/reserves.

Thanks again for all the great feedback!

-Rob

Hey guys, 

My wife and I are under contract on a condo in Kihei that is vacation rental approved. It took a lot of research and contemplation before I was able to convince myself that paying a 30-40% premium for a condo in a complex with vacation rental capabilities was worth the investment. I ran all of the numbers and it seems to be pretty safe from a cashflow perspective. I pulled data from VRBO for similar 2br/2ba  units in the complex and by my calculations the nightly rate on average would come to $208. Based on $450 a month for electricity, cable, internet, and on-site agent (required by law) the numbers look good to me. Is there anything else I should know? I plan to pass the cleaning fees on to the guests, as well as the 14.5% in resort taxes. 

I do worry a bit that the market could shift downwards, but I think I justified it to myself by saying 'in an economic recession, people will still travel, they just won't want to pay $800 a night to stay at the Grand Wailea.'  Should there be a recession I'm estimating that I'll drop from 75-80% occupancy down to around 40-50%. It does feel like there is likely a major market correction coming, but due to limited inventory of vacation-rentable units in Maui I feel like I should be somewhat more protected from the effects of said recession. What does everyone else think? I am all for taking risks in life, but we also have a 1 year old son now and I don't want to jeopardize the life we've built so far. I know  @Brandon Turner now lives in Maui and I was hoping you might be able to weigh in on this. I have lost a lot of sleep over it, and am actually about to board a plane to head to Maui to stay in the unit for a few days. I plan to make the call after seeing it in person.

Thanks guys for the advice.

Mahalo!

Rob

Hey everyone. I currently have an investment property in the Logan neighborhood (near Gonzaga) and am looking to purchase 2-3 more units. I'm a Gonzaga alumni but currently live in Seattle with my wife. I bought the investment home to give back to the Gonzaga community and to stay connected to the school. 

The problem is that it's been very difficult to manage our investment property from across the state.I am hesitant to purchase additional properties until we find a good management company which will allow us to scale up. Does anyone have any recommendations? I'd prefer that they have some experience with student rentals as they are a different beast than traditional tenants (and in many ways easier to manage), but it's not a deal breaker.

Thanks guys, and happy investing!

Rob

Sound good, I have received the financials and it looks like the utilities are averaging about $100/mo with the current tenants.