Pros - guaranteed rent, tenants stay longer on averageCons - more mgmt needed (lease violations), they tend to not take great care of properties (increase maintenance expense or deferred maintenance)

What is your Annual Rental Rate Increase look like?

Household Debt Rose by $184 Billion in Q1 2024; Delinquency Transition Rates Increased Across All Debt TypesMay 14, 2024

They've increased the price several times in the last few years. 

When we create our business plan, we also include our exit plan.We'll only proceed if we can clean this up, acquire new tenants at higher rents so we can increase our NOI, which in turn should reflect our cap rate and profits.Since this asset class is new to us we will tread cautiously.Scheduled to preview tomorrow. 

Here's my take on the decision:First, let’s look at the pros and cons of paying off your current short-term rental (STR):Paying Off Your STRPros:-You Eliminates your largest fixed expense (the mortgage), which increases your cash flow significantly.

Despite the storms in W FL we are seeing YoY rate and occupancy increases 24-25.  

I recommend you do this annually to adjust for utility increases and other variables.

This was in a middle class neighborhood and I get why that is less risk however with apartments increasingly including laundry, I would imagine demand lessening in that location. 

It is amazing how many times I have seen the cash flow represented as rent - PITI and to compound the issue they did not realize the ADU would increase their property tax.