whoknew
Footballguy
We have to push the NAA to find gather some landlords and sue the government over this. I know they are "researching their legal options." Hopefully they move forward with it.
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*** Official Real Estate Forum *** (3 Viewers)
- Thread starter jeff_eaglz
- Start date
nirad3
Footballguy
To a degree, yes. I work in affordable housing (multi-family, construction/asset management).
whoknew
Footballguy
I'm a real estate lawyer. We don't do residential landlord/tenant evictions, but obviously we have to advise our clients of what is going on.
There are a lot of unanswered questions that this order brings up. I've no doubt there're going to be some lawsuits pretty quickly.
There are a lot of unanswered questions that this order brings up. I've no doubt there're going to be some lawsuits pretty quickly.
Zegras11
Footballguy
Rodrigo Duterte
Footballguy
SFBayDuck
Footballguy
Moving from the mortgage thread to here.....
Wrote two more offers yesterday, Both listed last week, offers are due today, notification tomorrow. Our agent said she’s never written two offers in a day with a client in over 30 years in the biz. But that’s the market in Eugene, OR, right now. Fully prepared to be 0-3 on offers after just one week of looking.
Wrote two more offers yesterday, Both listed last week, offers are due today, notification tomorrow. Our agent said she’s never written two offers in a day with a client in over 30 years in the biz. But that’s the market in Eugene, OR, right now. Fully prepared to be 0-3 on offers after just one week of looking.
ConstruxBoy
Kate's Daddy
CLT is not any better. House a block away had 54 showings over a weekend with almost that many offers. Went for way over list. Made us decide to spend money to re-do a lot of our house instead of moving. It's just not worth the hassle on the front end even with the benefit on the back end from selling.
SFBayDuck
Footballguy
Yeah if I was in a house I'd agree. But since I'm effectively homeless right now (living in an AirBnB for April, plans unknown after that) our choices are to try and buy in this market or find a rental (also a tight market) and look at having to move again in the next year or two (hopefully) if the market calms down. Or the market could leg up another 20% in that time and we find ourselves priced out again, just like we were in the Bay Area.ConstruxBoy said:
ConstruxBoy
Kate's Daddy
Good luck.
Zegras11
Footballguy
https://www.wsj.com/articles/u-s-housing-market-is-nearly-4-million-homes-short-of-buyer-demand-11618484400?reflink=share_mobilewebshare&fbclid=IwAR2zPzC8rTn31sWz0igrdvRNRCqxeIAysYDeTpw7IQGvhJB8pRXg8gA2Cuc
Until this corrects, a whole lot will not change much IMO. First timer market hit the worst.
Until this corrects, a whole lot will not change much IMO. First timer market hit the worst.
SFBayDuck
Footballguy
Offer accepted! The first house we looked at last week, we didn't make an offer as the owner is a teacher who doesn't want to move out until late June. But they weren't getting any offers so they pulled it off the market earlier this week. Our realtor reached out, we made an offer at ask, and they accepted! After going 10-15% over ask on three others and being out bid, I'm pretty stoked. We needed something like this, a situation that wasn't competitive, to swoop in and get something.
BassNBrew
Footballguy
Random
Footballguy
Looking at a possible STR here. It would also be our personal vacation and possibly part time retirement home in about 10 years.
Property is in NC Smokey Mountain area.
Pur Price - 350-400 been on the market over a month, so we should be able to get it in this range.
Rental Rate on AirBNB 300/night self managed by current owner. Rents about 10 months out of the year.
Extremely secluded, 10 acres, very high elevation. Realtor said the water source is rain collection/spring water. I've never heard of this. Is this normal for the area? Its a newer build but has baseboard heat and no AC. We would likely add Central/Heat Pump.
I've contacted a management company, all inclusive for 25%. So would we keep the cleaning fees we would charge on AirBNB?
Any experienced STR owners have input? The numbers seem to work. I know some here have not had luck with these, but we really like the property and likely wouldn't use it much over the next 10 years, so it seems logical to rent it out.
TIA!
Property is in NC Smokey Mountain area.
Pur Price - 350-400 been on the market over a month, so we should be able to get it in this range.
Rental Rate on AirBNB 300/night self managed by current owner. Rents about 10 months out of the year.
Extremely secluded, 10 acres, very high elevation. Realtor said the water source is rain collection/spring water. I've never heard of this. Is this normal for the area? Its a newer build but has baseboard heat and no AC. We would likely add Central/Heat Pump.
I've contacted a management company, all inclusive for 25%. So would we keep the cleaning fees we would charge on AirBNB?
Any experienced STR owners have input? The numbers seem to work. I know some here have not had luck with these, but we really like the property and likely wouldn't use it much over the next 10 years, so it seems logical to rent it out.
TIA!
BassNBrew
Footballguy
Sounds like fun! I've been very vocal around these parts about vacation rentals not being the best investment.
1. I would want to see the owner's tax return schedule for this piece of property. 10 months seems almost too good to be true. I would expect strong rentals from May through October and then the winter holidays. Not sure about the proximity to Catoolouchee to drive ski bookings.
2. My last vacation rental was at 4500 ft and AC wasn't needed. Only got above 80 degrees a day or two a year. What elevation are you looking at? You need to figure out snow removal for 3 months of the year and that might now be cheap if it's secluded. I missed that expense when initially running my numbers. When the PM company was taking discounted off season bookings between the heat and snow removal expenses I had bookings where I was making maybe $10-$20 a night.
Gotta run.
3. Rain water collection would be the exception and not the rule. Most rural properties would be served by wells. It doesn't happen often, but what if there's a drought and you are booked solid, are you trucking in water?
4. Be aware the mgmt company will have to charge occupancy tax on the cleaning fees. They will also charge a booking fee to the renter and likely will sell damage insurance where they take a cut in lieu of collecting a security deposit. When I managed myself and collected a security deposit, people took care of my home. When I turned it over to a PM, it was license for the tenants to abuse the property. I hate to be ugly, but the "eyes" on your home after move out will likely be someone making $10 an hour and probably had relatives at the capital in January. Overtime I went to the property I found damages the PM company missed. Worst was a water heater leaking damaging the sub floor. Typical example would be a busted bed frame that someone used cinder blocks to repair.
5. If linens are provided by you, be sure to account for needing new sheets and towel every year and them coming up missing. Hopefully the PM company is responsible for this. You'll still need to plan on dry cleaning bedding to get the cooties and cum stains out.
6. At higher elevations leaves are budding in May and down by mid-October. Kind of weird and took some getting used to. Opened up some views but kind of bleak too.
7. The mountain market has always been run in cycles, much more so than the beach market. If this was a place I wanted for retirement, I'd want to love it and not just buy a place I really like. Next downturn you'll see tons of places on the market. My advice is to make sure this place is special to you so you don't have buyers remorse seeing a nicer place for the same price a few years down the road. The plus side of buying early is being able to write off all you upgrades and the furniture you want while renting it.
Random
Footballguy
BassNBrew
Footballguy
Sorry to be such a negative nanny.
That's a great really cool area. What elevation is the home situated?
Random
Footballguy
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BassNBrew
Footballguy
BassNBrew
Footballguy
Just spit balling here but total paid might include occupancy taxes. The county rate is 4% and the state collects about that too. Would be interesting to know if that total paid includes any book and insurance fees that you would see. It probably is fully booked the next few months but they should be able to provide you contracts to prove that or a screen shot of their trust account. All rents paid in advance in NC for vacation rentals have to be held in a trust account until the stay occurs. The calendar would differentiate between owner reservations and paid reservations.
AC wouldn't be needed at 5200 ft. Maybe a window unit to nudge things down when temps hit the 70s. You're looking at an average of 85 inches of snow a year there, but it melts fast. That's a great location and I'd bump it up a few notches due to the elevation. I used to love leaving Charlotte at 97 degrees and arriving to my place at 75 degrees. Every 1000 ft gets you 5-6 degrees. There's a limited supply of properties, especially nicer/newer one at 5000+ feet. That scarcity is a good thing. Limit land available that high and building costs are increase for hauling materials to a site like that and grading isn't cheap either.
Wells can be tough at that elevation. Maybe be weak flow and I don't think there's a pill for that. Obviously you want to do your due diligence here during the due diligence period.
Good luck with whatever you decide.
Desert_Power
Footballguy
I'd really like to do this down the line.
Was actually unsuccessfully searching for this thread. Have started looking into getting out of state rentals lately as I don't think the returns locally look attractive since I sold my rental/former townhome earlier this year. Curious if any FBG are finding cheaper markets across the country they like.
BassNBrew
Footballguy
I see some opportunity in Lincolnton/Hickory/Newton. Rental market is extremely strong and the prices are lagging.
Nathan R. Jessep
Footballguy
flapgreen
Footballguy
Will start working my way through this thread. We have about 200k to invest at the moment and we're considering purchasing a vacation rental somewhere on the panhandle of Florida. Anyone else in here have any experience with this? I think we could go up to about 450 or so with the overall investment.
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Desert_Power
Footballguy
flapgreen
Footballguy
What would you recommend instead of a vacation rental as an investment? LTR? We are seriously considering buying a vacation rental at the beach.
BassNBrew
Footballguy
I think LTR are better investments when you factor in the time you will spend. With a LTR you'll eventually hit on a tenant that sticks and painting and vacancy costs evaporate for years. Everyone of my trips to my vacation turned into work. If you aren't doing that work, you're paying top dollar in this economy to get the work done. Beyond the maintenance, you'll be replacing everything. Furniture that would last you 10-20 years last 3-10 in the vacation rental. You'll show up and wonder where half your silverware is...buried in the beach when the parents let the kids use them to build sand castles. One of my favorite expenses was paying a service call to the cable company to get the TVs functioning again for a tenant when the prior tenant decided they were on the geek swap and swapped boxes and rearranged connections. I could almost count on this happening once a year. I'd also be on the hook for a new router every couple of years. You know when your internet isn't working and the cable company blames it on your router and it turns out the new router doesn't work and it was a issue with one of there connectors???? At home I return the router...your PM company isn't doing that for you.
The other major drawback is that you'll feel forced to vacation the same place every year since you are already paying for it. After five years the same place gets old.
Now I realize there are some good vacation rental investments out there. However I would suggest that most people would be better off keeping their vacations and their investments separated from each other. I also think you are at huge disadvantage finding one of the gems and operating it when you live 1000+ miles away.
BassNBrew
Footballguy
Honestly most people would be better served investing in the stock market. The best reason to be in real estate outside of boom periods like right now is that it's a forced savings plan. It's easy to skip a month or two setting aside investing in the stock market. It's not so easy to convince the mortgage company to let you skip a month or two. You go years not making much money with real estate and then a decade later you realize you have built up a boatload of equity.
flapgreen
Footballguy
This is excellent and may have set us on a totally different course. Is it advisable to effectively manage a LTR from far off, or have a company manage it for us somewhere on the gulf? We're already dumping 15% of my pay into my TSP/401K. We're going to move there eventually. I'm just not sure when and it will depend on when a position opens up there for me on base.
-OZ-
Footballguy
this October will mark our 18th time at the same island and neighborhood. (Different houses, which is part of the fun.)Agreed with everything else. So even in retirement, we'll probably just rent a month or two at a time.
Sand
Footballguy
Sorry, not much help here. My property was a single family in the gulf, so a bit beyond the 200k range. Not at all familiar with the condo scene there.
All I can say is for those looking at vacation homes on the gulf is to be ready for a lot of fingernail chewing during hurricane season.
-OZ-
Footballguy
Finally correcting a mistake made over a decade ago.
I think I mentioned it before, but we bought 7 acres near a marina in Tennessee. Now we're trying to sell. (Could be good timing, we'll see). Nothing built yet, the plan was to retire to it, but that changed.
We didn't have a proper perc test or thorough survey, which has made it a challenge to sell. Our realtor gets many calls of interested people, but only a couple offers - contingent on the perc. I didn't accept any of those as they're a bit lower than we wanted. So we finally got it done. This being rural Tennessee, and more than half the land is at a greater than 20% slope, so it took some time to get the person out there.
We'll get the full results soon but it sounds like the land still meet the specs for at least a 3 bedroom house - which is what the contingencies in the offers wanted. Hopefully this means it will sell soon. We're asking about $8,000 per acre. Hill top, great views, nice place for a cottage.
Lesson learned though, absolutely get a perc test before buying.
I think I mentioned it before, but we bought 7 acres near a marina in Tennessee. Now we're trying to sell. (Could be good timing, we'll see). Nothing built yet, the plan was to retire to it, but that changed.
We didn't have a proper perc test or thorough survey, which has made it a challenge to sell. Our realtor gets many calls of interested people, but only a couple offers - contingent on the perc. I didn't accept any of those as they're a bit lower than we wanted. So we finally got it done. This being rural Tennessee, and more than half the land is at a greater than 20% slope, so it took some time to get the person out there.
We'll get the full results soon but it sounds like the land still meet the specs for at least a 3 bedroom house - which is what the contingencies in the offers wanted. Hopefully this means it will sell soon. We're asking about $8,000 per acre. Hill top, great views, nice place for a cottage.
Lesson learned though, absolutely get a perc test before buying.
-OZ-
Footballguy
How much is hurricane insurance? And is erosion an issue?
We casually looked around fort Morgan, as the prices seemed to be more reasonable than Hilton head or other beach locations. (Not cheap but less $$$) but I can't shake the feeling that they get beat up, and any rising water level will be a complete disaster.
Sand
Footballguy
We were at $3700 per year homeowners plus about $800 FEMA.
Fort Morgan tended to pick up sand rather than lose it, from my memory. Never had an issue there.
Definitely cases of storms depositing 6 feet of sand underneath the house and also sucking sand out from under the slab. Part of the joys of beach ownership.
BassNBrew
Footballguy
I can't speak to the state laws in the gulf states but will give you examples for NC.
Any security deposits have to be held in a trust account with a bank that does business in NC. Rents paid in advance also have to be held in a trust account and can only be withdrawn once the stay happens. I'm sure most people don't abide by this but occasionally you read about someone getting tripped up on this.
In NC you have state sales/occupancy tax. You also have a county tax and often a city tax. Back when I was managing my home I had to submit these monthly. A PM company is set up to handle this. I think AirBnB will handle this. VRBO likely will to if you pay for more than just advertising. Any way, when I was doing it myself it was a major PITA. My little ski town had a program in place to catch people leasing who weren't paying the occupancy tax. They also had yearly requirement for filing a safety inspection which had to be notarized. Of course my PM company would handle this for a fee of $200.
I would think you would have to go with a company. You can't afford to have you cleaners get sick on a half day turn and the next guests come into a dirty place. A PM company would have to resolve that. Also if you do it yourself you are signing up to be available 24 hours a day during any stay to deal with any issues. This isn't a long term rental situation where a few days without AC isn't a major deal. When you are at a hotel and the sink isn't draining or there aren't enough towels, you are calling the front desk. Vacation rental customers expect this level of service.
Won't be an issue in the gulf, but bears were a problem at my place. Guest would dump food in the trash bins and the bears would go to town. A latching wood trash can enclosure (became required by the town) worked for a while until the bears learn to just rip it apart or push all two hundred pounds of it down the mountain. Town started issuing fines starting at $250 and going to $500 each time this happen. PM company then decided to start charging $15 a stay to heal off trash. Other option was investing in two $1000 metal bins concreted in.
Guess my point is that if you run the numbers and the investment decision is close, figure that you will have missed some expenses that will put you in the red. Seems like a lot of work just to permanently tie you to the same place. This weekend I'm staying at a Bed&Breakfast for $99 a night a few miles down the road from my old place. So looking forward to rolling in without have the anticipation of finding destruction and the reality of a couple of trips to Lowes to get supplies to work half of my holiday weekend.
BassNBrew
Footballguy
No problem. Wish you the best of success if you move forward. I'm the contrarian viewpoint around here on vacation rentals.
It’s good to read to know what one may be getting into. The wife and I have been waffling between doing one and holding off for a few years now. Made offers on a few places here and there in Colorado but never got anything under contract (always outbid.) Not sure what COVID would have done to us had we gotten some of the ones we put offers on. I didn’t go super aggressive on bids as I wanted to make sure the place was cashflow positive if we had to fallback on making the place a LTR. Have heard some stories of people making out like bandits being constantly booked and others with horror stories.
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-OZ-
Footballguy
my wife agrees with your perspective. I wanted to get a beach rental, but I'm good just keeping $ in the brokerage account and vacationing on dividends.
Sand
Footballguy
Buy utility, rent luxury. Unless you plan on living there the upkeep on a beach place is way, way beyond a normal house.
And prices are sky high right now (good for me, bad for prospective buyers).
flapgreen
Footballguy
After interacting with you and also my brother-in-law, who owns and manages a few LTR properties of his own, om starting to lean toward this not being the best time to jump in.
Runkle
Footballguy
There are a lot of REIT options, Fundrise, Millionacres, etc., where you can scratch the real estate itch without having to actually buy a whole property yourself. If you add in the expenses you'd have and/or management you'd pay for, it's probably pretty close to a wash on the numbers, and then just way easier on your sweat equity.
flapgreen
Footballguy
Harry Frogfish
Footballguy
-OZ-
Footballguy
Yep.
Fundrise is actually the account I plan to use to fund travel. Separate from other retirement funds, dividends earmarked only for travel. I had planned to use it for a down payment on a place but I think it makes more sense to just use it this way.
Desert_Power
Footballguy
I think anything around any type of luxury/vacation market is going to be pretty bid up with the hot housing market/pandemic. Given the general undersupply of homes, I just don't see that reversing anytime soon. Maybe will slow when rates rise.
I think we could see some deals on rental once the eviction moratorium ends and landlords that have been getting the rough end of the policy just want to cash out. Those are going to be in more working class markets though. Just IMO, those are the markets I'm researching lately.
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BassNBrew
Footballguy
I don't think it will happen. You could have missed all your house payments in the last year and still have more equity than a year ago.
BassNBrew
Footballguy
Smart move IMO. I got suckered into the "cool" factor.
I'm sure my friends and family appreciated all the cheap vacations on my sweat equity. I sold my vacation rental last May and 1031'd the "proceeds" into a LTR (by proceeds I mean depreciation I would have had to pay the US gov't). The LTR rental is cashing flowing to the tune of $600 a month and has already appreciated more than the vacation rental did in 13 years. Best part, I've done nothing but drive by a few times to write off my trip and meals in Asheville.
-OZ-
Footballguy
The LTR seems viable if the market cools a bit.
With the oldest son attending trade school (probably electrician, maybe aero mechanic) there's a decent chance that we'll go into business together, he will be on call to fix #### while I manage the money. While that has a possibility of disaster, I'm not worried about it with him. But it's a few years before we'll take that leap.
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