All Forum Posts by: Shaival Patel

Any suggestions on STR in Las Vegas?? I know city of Las Vegas requires host occupancy but areas close by to consider to bypass some of the city restrictions?

Also any STR locations that are viable options fron cash flow perspective and friendly regulations? Looking to purchase max $800k ideally around 600k

1 Vote

Las Vegas, Nevada

It will surely be expensive if its get enacted into law. The bill has to pass through assembly now with again a 2/3rd majority for it to get to Gavin. I really feel like this will end up in court if enough awareness because it clearly is stiffling competition in an open market.

The value proposition of STR over hotel is definitely narrowing. It is more narrower for a couple than it is for families traveling. I personally still prefer STR for my family because of access to kitchen/laundry/more space even if that meant paying little more in comparison to getting two hotel rooms.

1 Vote

Orange County, California

Yes singling out STRs only on this addage, exempting hotels, seems like rooting for one team over the other.

2 Votes

Orange County, California

Quote from @Bill B.:

Which of those jobs doesn’t a hotel provide? On top of valets, bellmen, waitresses, cooks, managers, etc etc etc.

I would be more than willing to be the average STR employees ZERO people. They may hire a cleaner once or twice a week for an hour here or there, like a person does for their personal home. Same story with the other "jobs" you listed. I don't provide jobs when I buy my primary home, even if I hire those people for a repair. When I buy a car do I provide jobs for mechanics? But what percent of STRs actually have employees and pay social security taxes, paid vacation, medical insurance? I bet it's waaaaaaay less than 1%.

Ps. You skipped over the main point. 15% is still a discount for some reason over the taxes that hotels were already paying and it took 5 years to get it instituted. Of course every STR should be paying the same room tax as a hotel. That's obvious. Even if it eats in to the "cleaning fee" scam. That should obviously be included in the room price.

Yes 15 percent on top the tourism fees/Transisent Occupancy Taxes/local taxes and Airbnb/Vrbo booking fees. Hotel Resort fees is a much bigger got you then cleaning fees IMHO.

1 Vote

Orange County, California

Any insights into SB584 that places 15% tax on STRs but exempts hotels to fund housing situation? It seems bone crushing high for guests. If you were a new investor in CA market, this tax will lower your occupancy rates while hurting cash returns. Cash returns are already super tricky to attain with todays real estate prices and interest rates. How worried are current STR owners about this bill?

2 Votes

Orange County, California

Hi,

We maybe considering buying a brand new property for STR purposes. Also looking to tap into tax benefits of self managing STR. Is it advisable to place the in ground pool first year of owning the property? In doing so, are we jeopardizing the material participation requirement for (non REPS) self managed SFR used primarily for STR? Property location is two hour drive from primary residence

Thanks

1 Vote

Hi,

Does anyobe have experience in Indio and Bermuda Dunes? It seems high occupancy in festival months but is it a year round rentable market for STR. In comaprison to Indio, does Bermuda Dunes seems like a better option?? Or even any other desert areas? Hard to find Cash Flow positive properties in STR in that area. Is this time to invest and ride it out? or just bail out completely from STR in these areas?

Thanks for your inputs!!!

1 Vote

Does anyone have recommendation on lenders they have worked with in Orange County CA area? Need someone who is responsive and top of things.

Thanks

0 Votes

Orange County, California

Quote from @Peter Mckernan:

Quote from @Shaival Patel:

I am located in Cypress, CA (north OC area). I have been exploring different markets for my first STR. Initial preference…. stay close to Orange County area/self manage. But each city in OC has different restrictions. Most baffling of issues is some cities have no STR mention in their codes but they claim that omission of STR is implied prohibitive in the city. Other cities require owner on premise to host, others have limited permits which are waitlisted. As you see, its all over the spectrum.
So is there legal way to get around STR restrictions on SFR? I have come across listings in all the cities where STR is restricted, and/or prohibited. What does that legal framework look like? And how risky it is to pursue one of these locals knowing city's take on STRs?

Hey Shaival,

OC basically has tighten all the restrictions up, now we are still each city tighten and take on their own requirements. This is market that many people work and live in which have pushed the STRs out. The next best thing is MTR, those you will see better returns on the purchase then you will a LTR and less than STR. There are a lot of areas in OC that have hospitals, contract work etc that you can use to have the safety of consistent tenants. This is the way you "get around" the laws. MTRs are the best returns right now for the market, and if you add add in buying a SFR, building an ADU and then MTR both you will be making even more.

Thanks for sharing your insights of the area. I am keen on STR for now due to bonus depreciation. But MTR is a viable option because I know how many travelling nurses we see at our hospital.

0 Votes

Orange County, California

Quote from @Michael Baum:

The short answer @Shaival Patel, is there is no legal structure to protect you from changing regulations.You will have to abide by the decisions that are made. What you can do is to get with other STR owners to lobby for positive or less restrictive common sense ordinances. Find common ground.

Otherwise there is not much you can do if the hammer comes down. Think of every entity working in the USA is bound by regulations. Even the biggest, baddest corporations who have millions invested in lobbying are forced to comply.

The absence rule is present in a lot of municipal codes. If it isn't spelled out, it is prohibited. That is pretty common.

You have called the various cities involved and know that STRs are problematic. It is time to move on. Trying to do them in an area where it is prohibited is a way to annoy all the neighbors and get fined for doing so. Don't be that guy. Just look elsewhere.

Yes that is solid advice. Thank you.

0 Votes

Orange County, California

All Forum Posts by: Shaival Patel

Shaival Patel has started 7 posts and replied 14 times.

Post: STR in Las Vegas

Post: CA senate bill SB584 imposes 15% tax on STR

Post: CA senate bill SB584 imposes 15% tax on STR

Post: CA senate bill SB584 imposes 15% tax on STR

Post: CA senate bill SB584 imposes 15% tax on STR

Post: Tax implications of in ground pool first year of STR

Post: Indio vs Bermuda Dunes

Post: Lenders for STR

Post: City STR regulations or lack there of…..

Post: City STR regulations or lack there of…..