All Forum Posts by: Stacy Livingston

@Patrick Crehan

Congrats on your first rental property! I had this experience (renting our personal residence) one year ago and we definitely learned a lot. We had lived in it for 6 years so we also have a lot of well-established relationships with the surrounding home owners which has been (mostly) beneficial. 

A few questions - what state is the property located in? There are definitely some special considerations there. How long did you live in the home and what type of financing did you use to acquire it? This is especially important if the potential buyer wishes to finance with FHA loan. Will you serve as the property manager, handy man, etc? How are you vetting potential renters? Are you working with an agent to get it leased?

The good/bad/ugly:

1) We had to move in mid-January and, based on the market for the area, were prepared to have to sit on the property for a few months but it was still painful. It rented in late April. Maybe you'll have more control on moving when you know you have a renter or your area doesn't have as much of a seasonal dip. 

2) All of our neighbors (who we are still close with) call us the second something seems off. Super helpful if someone extra moved in or they can alert you of lease violations. Less helpful if they are calling to let you know that they leave the garage open sometimes, that there is a gouge in the lawn, the renter is weird, etc.

3) We're fortunate to have a great network of friends that also are tradesmen, real estate agents or have experience in investing in that area to help when things pop up. A bit different consideration if you are able to do it yourself and you will remain close by (we live 8 hours away now). Either way, networking locally with other real estate related folks will be huge. 

So far, we've been lucky to find a renter with excellent credit and a willingness (and skill) to fix things himself when he can. The property is cash flowing well enough that it covered the vacancy losses. I am sure they'll buy something and move out when their lease is up but my fingers are crossed that they stay a few years or that we'll be lucky with the next ones as well. 

Do you know the demographics of the students that go to that school? How many of them are out-of-state to in-state? Do they stick around all year or do they expect a lease that just covers the school year? Understanding the demographics of your potential renters would be my first consideration. My opinion may be a little more marketing focused because that's what I do for a living but I will give you a few quick recommendations below.

1) Get professional photos and consider renting it partially furnished if you are renting by room. This doesn't have to be Airbnb status but to have some staples in the common areas - a couch, chairs, table, coffee table, etc. You could also just make this an option and upcharge if they want it fully outfitted with kitchen supplies, furniture, a bed, etc.  

2) Figure out what makes your property special. What things is it close to? The neighborhood is way more important for a house hack than the room. This will be the heart of your listing and inform your copy on any piece of marketing. Other things that might be worth considering and mentioning here- how you accept rent since there are so many pay platform preferred by the younger demographic.

3) Post all of the places that are free and consider paid sites- Craigslist, Facebook Marketplace, Facebook groups, Zillow, etc.  Obviously do research your competitors here as well to see what they are doing that make their listing compelling. 

4) Launch a website for the address and market the property year round with high quality images and emphasis on the features that set your property apart. This will give you better visibility online than 90% of your competition and allow you to have a lead form for a waitlist or future interest. This is cheap with Squarespace, Weebly, Wix, etc. You can also create some content about the neighborhood, school, etc. that will be of interest to potential renters. Future students may find you before they are even looking for a room to rent. 

5) Consider digital marketing ads/sponsored posts to target by behaviors that define your ideal candidates. The rules on this for housing are obviously a bit more restricted than other ads due to Fair Housing but will allow your the opportunity to get in front of your renters without them doing much thinking about it. Almost every market (whether there is a large student population or not) is going to be much hotter right before the school year starts. Renting by room is undoubtedly going to be more boom or bust but not something you can't plan for depending on location.

Would love to hear how it goes!

@Sean Tippens since it's been a few months, you've probably already made a decision but I can tell you that from my experience, quotes from contractors in Midland are all over the place and there is shockingly low follow-up after the quote. How did you select your contractor? How much of the house is actually siding anyway? I see very few houses in Midland which do not have a heavy amount of stone and brick. 

Based on past paint estimates in Midland, I'd say $1500-$2k for interior is competitive and exterior totally depends on what you're working with. I'll also add that there is a great suggestion from @David Greene in his book Buy, Rehab, Rent, Refinance, Repeat on this. Ask to see the breakdown as to what is labor vs materials, etc. and do the math to see what they are trying to charge per hour and potentially purchase the materials for them if they seem inordinate... Give them the opportunity to rectify once you've had a closer look or just move on to someone else. 

Let me know what you ended up with!

@Sky C. welcome to BiggerPockets! 

I spent 5 years between Orem/Provo and Salt Lake City and still go back regularly. I do have a great Realtor in Salt Lake City that I'd be happy to connect you with. My husband and I actually just moved from the Magnolia/Montgomery area in Texas as well (except to Midland) and I've been licensed in Texas for 5 years. 

As for the areas to focus on, are you looking to live in the property that will ultimately become your investment property or will you buy a personal residence elsewhere? If you plan to live in it, what kinds of activities are you interested in and how close do you want to be to those activities? What's your ideal purchase price or all-in price? Do you know what kind of financing you want to use? 

I love how lively this discussion is! This is definitely a good lesson in learning to adjust expectations as a new investor. You've already gotten a lot of great feedback and I love the personal insights, such as from @Kai Van Leuven, that will surely help you sleep better at night. Kids or no kids, a renter will never take as good of care of your property as you will your own but we can hope they'll do their best at move out to restore it to a more sterile state. Wish you the best! I hope you'll update this thread once they do move out ;) 

I feel like decor is fairly crucial to the overall experience in an Airbnb. Sometimes people stay in an Airbnb because they can do so cheaper than a hotel but most people also like the added value of feeling at home, having a kitchen and/or having a less cookie-cutter vibe than a hotel. I personally am more inclined to finalize my choice based on style if there are a few contenders in the area. If they all feel outdated and/or sparse, I'm might widen my search parameters to find a place that feels more like vacation versus staying at a vacant property. 

As for entertainment, the vast majority aren't seeking solace at your Airbnb and whether they take advantage of the Netflix/Apple TV/etc, having the possibility is important. All the more if all of the surrounding properties that are available offer it. 

Welcome to the area, Chris! How long have you been in Spring? 

Since you aren't looking for an immediate return and will be living in the house for several years, I would recommend fully updating the master bathroom and progressively updating the features in the other bathroom. In the end, it will be best to update them both and this way you can spread the cost over time and take advantage of sales on flooring, finishes, etc. as they arise. Good luck!