I’ve handled almost every aspect of renovations myself—plumbing, tiling, painting, drywall, and general construction.

Consider whether an LLC is right for you—it can provide liability protection but isn’t essential for a single property, as personal liability insurance and an umbrella policy may suffice.

Just expressing timeline as I best understand it.Contract Jan 2022Lot Purchase Feb 2022Completed permit package submitted to city June 2022.Construction permit approved by city August 2022.Alt Seawall permit approved by city September 2022.Closed on financing September 2022.Lot scraped November 2022.Fill dirt brought in December 2022.Status update of "Ready for underground plumbing" from builder February 1, 2023.According to city portal, "Notice of Commencement" not completed at the time of this post, no indication of underground plumbing at time of this post (April 1, 2023).  

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.While the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall loss.

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

And don’t forget about short-term rental insurance—it’s a must for direct bookings since you won’t have the platform’s protections.Lastly, make sure your house rules are super clear and easy to find.

However, before you do so you should ensure that your revenue from rental income covers ALL your property expenses in the townhome, including mortgage, taxes, insurance, maintenance/repairs, vacancy, property management, etc...

The property was rented and generated $160 cash flow after mortgage, taxes, insurance and property management fees were paid.

Mgt, Landscape/Snow, tax, insurance, utility then debt service. 

.- Tell them they'll have to provide you with a copy of their renter's insurance naming you as additional named insured, with a minimum of (I use $300,000) liability insurance, also before they move into the unit.It's not perfect, but it's a start toward a tenant transparency.