All Forum Posts by: Grey Stone

@Grey Stone what do you mean by tax benefits of continuing to hold? If you inherit a property there is a step up in tax basis and no capital gains tax or depreciation recapture if you sell the property for same market value as valued when inherited Any gain occurring after inherited date can be avoided by doing a 1031 exchange. Not recommended unless it’s over 6 figures.

If you are getting $5k/month, 60k/yr in LTR rent vs $85k projected STVR gross income there is no advantage to owning a STVR because you have a lot more expenses.
However you need to check the zoning restrictions for STVRs in your neighborhood. It’s possible they are not even allowed in that neighborhood.

You are doing real well with a LTR if you are getting 1% or greater in monthly rent vs value of property. At 5k/mo., a property value of $500k x 1%= 5k.

I live in California and am referring to a benefit we had from obtaining a continuance of my dad's property taxes. I'm currently paying approx $6k/year vs if I were to buy similar house I would pay approx $18k/year. I double checked and they do allow STR. I don't really follow the 1% rule because at certain price points it just doesn't balance out. I noticed with cheaper properties (which I love!) the cash flow is great, but the future appreciation and growth of this area is much better IMO than where I'm investing now.

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Originally posted by @Curtis Mears:

@Grey Stone

Depends on your goals. Str will earn more money,but also quite a bit more work. Also more investment as you need to have furnishing, etc. In addition, you will need to hire cleaners etc. Ltr generate less income, but much easier to manage with little time investment except when tenants turnover.

Cleaners have definitely been a concern because I don't live in the area and would like to check in from time to time and pricing seems a bit expensive, even though the guest pays for it.

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Originally posted by @Cliff H.:

Some great answers above here @Grey Stone. Having both LTRs and STRs what you intend on doing with the property between now and when you "leave it to your children" is, as Luke implies, potentially far more meaningful over that time horizon than whether you cashflow $70k or $60k/year.

LTR and STR are radically different markets with dramatically different tenant expectations and overhead. Many LTR investors jump into STR thinking they can automate their way out of guest engagement/experience, while failing to understand that the difference between a luxe Westin and basic Comfort Inn is that guest engagement/experience. Neither is better or worse than the other, it's just a different experience and pricing model.

Sure you may ultimately hire that rockstar hospitality host to run the place for you, but those folks don't grow on trees or leave their job at a luxe hotel for an investor with a single STR still learning the ropes and trying to figure out how to manage day-day turnovers.

LTR it if want max returns in the short term and plan to nuke + pave it later on for personal use.
STR it if you want max flexibility in the short term and intend to slowly improve it w/a mix of personal + STR use over the long term.

Hope this helps!

Those are really good points. I like the idea of short term rentals because I can use the home for personal use and it gives a mini experience of what it would be like to run a hotel. Short term rentals also seem to not experience risk when it comes to squatters and/or having to evict. But I love the aspect of LTR being very low maintenance once they are rented. I'm trying to balance which one would be better.

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Originally posted by @Paul Sandhu:

Go with LTR. STR is much more hands on. LTR is like a car on cruise control. STR is like entering a demolition derby.

Lol, I'm definitely leaning more towards LTR.

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Originally posted by @Luke Carl:

There's a lot more to this. Your position in life for one.

First thing that stands out to me is that 88k is not luxury. In my markets that's a 1.5 bedroom with painted cabinets. Also not a good idea to go advertising "luxury" because you're just inviting in a bunch of complainers that will complain it's not "luxury" enough. "3 stars the host didn't rub my feet."

Is this thing in an area that is short term friendly? There are few places that are. So that's something to consider.

Based on your limited info my answer would be sell it, but it sounds like the trust or will is preventing you from doing that. So my second answer would be put a tenant in it. 88k gross on short term includes cleaning and utilities. So by the time you factor that in the 28k difference probably isn't worth it. Please keep in mind in short term if you're not managing you're breaking even if you're lucky.

Again, would need WAY more info to give qualified answer. Hope this helps.

I refer to it as a luxury home because it is. This is based on value and location. Not trying to be snooty, but trying to give a better idea of the type of property in hopes to get better advice and opinions. I think the airdna analytics may be a little low because there are not many short term rentals in the area. And with that, you brought up a really good point wondering if the area is STR friendly. I'm not really sure and am going to look more into that. Also, I'm not selling because there are tax benefits, it's a very well run city with good schools and overall desirable.

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Who has done out of state investing? Have your experiences been good or bad, easy or hard? Do you feel it has been worth it? We have a good portfolio that we are happy with in the Los Angeles county exurbs. It has made my family good money and has been really easy to self manage. We're now wanting to diversify into a new area, but I am concerned about fixing something that is not broken. I have been looking into other areas like Colorado Springs, Scottsdale, Phoenix and Vegas. We're looking for places that are growing and can cash flow (even if modest). Opinions and experience is appreciated.

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What would you do if you inherited a luxury property with no mortgage? This is a home you intend to keep forever and leave to your children. Would you do short term rental (airdna estimates $88k gross per year at 55% occupancy rate) or long term rental at $60k gross per year? What are your thoughts?

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Originally posted by @Mike Cumbie:

@Fas McO'nen

"@Jay Thomas I hear you. It just doesn't sound right for someone to just break into your property and you can't do anything about it but follow the legal process.

I guess nobody would be safe leaving their home they live in to go on vacation, if anybody can just break in and feel at home while waiting for the legal process to kick in. Good thing the eviction notice is about to expire"

Except this is not your house or home. This is a business asset, it's like Best Buy shooting shop lifters or Target having them kneecapped by a biker gang. McDonalds breaking the tire iron out on someone trying to use an expired coupon.

This made me crack up. Dear OP, this entire thread is disturbing. First, this situation absolutely sucks and is one of the worst case scenarios a landlord/investor can go through. But you will get through this and when you get through this, you will know you can get through pretty much anything. But DO NOT make a bad situation worse. DO NOT assault this guy or give any reason for him to sue you. Most investors have something to lose, and most squatters do not, so you can't expect to get down on their level and expect a good result.

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Most people on this forum won't get to that point because most people off of this forum won't also. I've noticed the investors that are really successful in REI were also successful in the careers they left. My husband and I started by buying one sfr, then just so happened to need to move around the one year mark, rented out the previous house and just so happened to have done this a few times....with each property the down payment was low, properties appreciated and cash flow was good. And with each property it became easier to save up for down payments to buy more. We were quickly able to buy investment properties with 20% or 25% down. We also had good careers and lived below our means. Too many people want it to happen overnight and it's more realistic to have a plan, stay focused and keep working towards that goal. The more you work the more benefits you see. I'm still shocked at how much RE has improved our lives. I don't feel we've been super aggressive. You literally become rich over time without having to be super educated, smart or even that talented. Just find a way to get the money to buy something that will make money and keep doing it, lol.

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All Forum Posts by: Grey Stone

Grey Stone has started 5 posts and replied 108 times.

Post: BP CON 2022 Ticket Needed

Post: Lux Short Term vs Long Term Rental

Post: Lux Short Term vs Long Term Rental

Post: Lux Short Term vs Long Term Rental

Post: Lux Short Term vs Long Term Rental

Post: Lux Short Term vs Long Term Rental

Post: Out of State Investing Pros vs Cons

Post: Lux Short Term vs Long Term Rental

Post: Breaking into my own property!! Am I breaking the law?

Post: Realistically most investors won’t replace all income W/ cashflow