All Forum Posts by: Tyler Winget

 DO NOT FORGET ABOUT SEPTIC SYSTEMS! Whatever is there that's existing , make sure it can handle the volume at which you're planning to rent it out at. 

Hey Andrew,

Above all metrics - we made sure to pick an area that people were already traveling to, anyways. A vacation-destination market, with year-round travelers. Not just seasonal. Ours was the Poconos, PA market. Seeing you're up Northeast as well, with areas that have both lakes for summer fun and slopes for winter, I think you'll be OK in that regard. 

You asked for subtle nuances that aren't seen in underwriting, so here they are..

1. We moved in. Depending on the size of the property, that may be appropriate, or it may not be necessary. We were at 43 units, young and dumb nothing to lose. We had management in the region anyways so this wasn't as difficult of a decision to bear. Ours was once "mom & pop" too, and is returning to be such with onsite managers 24/7, but all depends on the deal. If you find a vacant mom & pop motel with 8 units and just needs to renovate, obviously that will be a different story. But moving in allowed us to build the vision for the hotel while we were onsite, interact with our first guests to make sure everything was good, and the more. We don't think it'd be nearly as successful today if we / someone else wasn't onsite as often. 

2.Cleaning/Laundry - we knew this would pose a hurdle, but not one as big as we planned. After all, you're running a hotel. High volume, fast turnover. You need to have a solution to this problem from the start. We were blessed to have a laundromat conveniently located down the street and been able to make a deal with the owner. Cleaners - we paid them a contract price per clean, which included labor for laundry and materials for cleaning (clorox/windex/floor cleaner etc.). We obviously supplies consumables. Being that cleaning was guest-paid in the reservation, we were able to control this quite well while still incentivizing top tier quality control with having a contracted per-clean rate. Not hourly. We didn't have time to manage employee cleaners. Cleaning is the lifeblood of this business. Don't be afraid to pay well for it. They also were able to take over our inventory for supplies and linens at no extra charge. It made their jobs easier.

3. Landscaping. We made sure to harbor a good % of our Reno budget just for landscaping, lighting, fire pits, lawn games, etc. People traveling these days don't just want to get away to their rooms, cuddle, and watch Netflix, they also want to explore and have an outlet to be outdoors. You don't need to go commercial-level with these things to get a return on them. Simple is fine, just do it right. We made fire pits and give the option to purchase bundles of wood to guests along with marshmallows/smores. Guests love it. And it's a revenue generator.

This is just a small peak - would be happy to chat more. This was without a doubt my favorite project we have ever done, I'll surely never forget it. 

https://www.airbnb.com/rooms/854353424416830480?adults=1&...

Hope this helps!

Hey Bryan - seems like you're definitely a Pro. 

I'd say explore other markets, but man, if you're already doing this yourself, in your hometown hitting above 20% CoC, building cool places that appreciate and can be sold later not just as STR , but as homes....man keep going! And share one of your properties! I want to see!!

If what you're doing is working....why change it up? Keep at it. 

Also sounds like you're quite handy if you're doing most of the work on these new builds yourself, at which point, if time was the unattractive variable to doing another new build, you could do a flip in your local market and only have 2-3 months of work vs 9 for a new build. Still a pretty good payoff if you put $50k into a home and can make it look like you put in $100k. Just connect with a good, active agent in your area and ask what's selling quickly. See if there are any options for you to look at.  

At the end of the day, with out of state market and management, you'll always be left wondering, "are they doing as good of a job as I would?"...and the answer is No. Once you manage for yourself, no one will take care of the home like you take care of the home. And if you can't give into trusting that, out of state managers won't help. No matter how good they are. 

There's my 2 cents!

Hi Ravi! Fellow seasoned short-term rental pro in Poconos, and I know LLV well.

1. Property Management: Why are you getting into STR? Is it for investment purposes? Or, just to offset cost of ownership for a family lakehouse? Another question to ask yourself, do you have the time/desire to learn? If not, it's not going to be enjoyable for you. I'll also ask, do you know if your property will your cash flow once you factor in professional management (20-25%)? With Evolve at 10%, it's attractive, but you're still stuck with guest communications, finding the cleaner, stocking supplies, and overall general maintenance and boots-on-the-ground management of your property. 8/10 times I recommend my clients find professional management. The other 2/10 times they're passionate about making the place their own side hustle.

2. Permits: I think you should look into Poconos Association of Vacation Rental Owners - they are the STR owner's "lobbyist" for regulation in Poconos, and are spearheading the meeting with the township on the 20th. If they do set a cap, it will be on a future determined number, not an existing. That is not the only thing that meeting is about, I'd checkout the website for more information. I can guide you on the documents and permit process should you need, or your manager will, when it comes time.

3. Hot Tub: They can be major selling points, absolutely, but in my professional experience it's not always needed. Everyone thinks a hot tub is appropriate, thus, everyone in turn gets one. And to purchase, lay the foundation, electrical, install, and get permitted, I typically have my clients assume $10k total. At which point, is having a hot tub increasing your listing's SEO THAT much? Or are you getting a hot tub just to get one? They're not easy to maintain for rentals, your cleaner really needs to know what they're doing, or you hire professional management and they take care of it for you (I can connect you if you need). If you plan to do it yourself, let me know, I have a GC I can connect you with that's done over 20 hot tubs for clients for me last year. 

Sounds like you're working with an agent, no worries, happy to still advise. I just simply want informed investors in the Poconos market. Most investors just try and throw mud at the wall and see if it sticks. It doesn't work like that here when you're competing against pros. This is a prime vacation market. 

Here's an Airbnb in Locust Lakes I sold and designed with our team last year, and now my colleague manages it. Happy to advise on design ideas for your airbnb as well if you'd like.

https://www.airbnb.com/rooms/926030399964613680?source_impre...

Hope this is helpful! Let me know if I can be a resource to you. 

Sangam,
Great topic here, not one spoken of very often. 

1.) I have a few clients who are at a similar stage, and they have a tax strategist that helps particularly with matters such as this. Not sure if you've explored any of them before. Happy to make an intro. Otherwise, I'll share your post with past clients and see if there's any relatable high-level feedback that I can provide.

2.) Poconos, PA market has been lucrative (for those that know what they're doing). Historically a vacation-destination market, which is important. Have end-to-end management in the local market and with a team of investor-agents, have become a one-stop shop to help many investors source, underwrite, offer, close, and manage their deals, all with the same crew. 

Let me know if I can be a resource to you. 

Cleaning in the Poconos, yes - I have several referrals for smaller cleaning companies, just depends which area you're looking in. 

Message me if you're interested still. 

Cleaning is a high-turnover business from an employee standpoint. The ladies in these small mountain towns are raising kids, cleaning in-between school hours, sometimes even having their kids help them work the business after hours.

Before you read, No, we chose not to start a cleaning company and pay via W2. 
Here's why:

They're already making $50-$75/hour working on their own - and we knew we couldn't match that. And we needed the quality to be kept high. 

So, we found one or two that were hungrier than the rest and had a desire to grow a family business, one where we'd be giving them the work. We built the vision for them for what it could be like. 

@Garrett Kroll had a similar response.

We scaled in a mountain destination with only a handful of teams that did that, copy and paste. The cleaners get paid well, one of them is $20k+ per month, but we'd have top-tier cleaning reviews on listings. They'd be a partner and help provide solutions to operational challenges when scaling, we'd bring tech in like Breezeway for scheduling, give them a company card with spend limits to buy supplies, they even ended up landing a deal with a local laundromat to wash and fold there after-hours to make their lives and ours easier.

Truly a win-win. 

All depends. Do you want to be in the cleaning business? Or the PM business? Some old-school PM's do both. But they don't manage top-tier listings where staging has to return to normal after each turn.

Just more insight for you. Hope this is helpful. Good luck! 

Rich - good question. The Poconos, PA local townships require this too. 

Your cleaner is your lifeline, and even an additional $50/mo to them is a good gesture I've seen workout nicely before. I have several clients that I've guided to self-manage from a distance like yourself and they did exactly that. 

Cleaners were OK with it. The likelihood they get a call is very small, but if they're pros in the market they will understand.

If you are in fact in the Poconos and need any recommendations for cleaners/subs, let me know. Happy to provide. 

Sounds like your handyman isn't trying to rip you off, and he's done this before. I come from the Poconos, PA market and have helped at least 30 clients coordinate hot tub installs in the last year.

Q1 Opinion*: Typically when underwriting property for buyer and mgmt clients, I'd give them a round number of $10k to assume for hot tub purchase / install / permits /foundation /electrical. Given you're at $5k for everything except the hot tub, with a reasonable solution I've seen before, sounds great.

Q2 Opinion*: Don't get a 110v hot tub. Whatever you do. A lot of them don't have proper heat pumps to keep the water hot in cold winter weather. Also, lookup the difference between Acrylic and Rotomolded tubs. I tend to suggest Rotomolded, they're more durable and less expensive, without all the fancy jets and colors. Easier to maintain. Perfect for rentals. Wayfair is a great spot to look - just make sure you read reviews and don't get 110v!

Sounds like you've got all your ducks lined up, and at a more than reasonable price, with a wise handyman. 

Hope this helps!

Just looking at it from a high-level overview....

> Why are people traveling to your area? On a hyper-local note. Is it for business? Is it people visiting family? Is there a big hospital right nearby? 

I'd answer those questions first, and then have that lead to your answer. 

Sounds like you already have more than enough beds for people and guests to sleep. 

Something unique is always a little movie-cove, with a couch and bean bag chairs and comfy rug, some fairy lights dangling from the ceiling. Black painted walls and ceiling. Movie posters. 

Another idea is a desk/office area. For traveling professionals obviously this is of utmost importance. You could have a desk and maybe some light workout equipment? A couple weights and yoga mats with a mirror, nothing crazy. 

Lastly, maybe it's a nursery, with a crib and child toys. A lot of investors forget to cater to kids sometimes rather than just adults. 

Hope this is helpful!