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STR market (short term rental)

Bpracing1127

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What do you think the status of this marketplace will be? Good time to buy a house for that purpose? Will nightly rates plummet?

Thoughts?
 

LargeOrangeFont

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What do you think the status of this marketplace will be? Good time to buy a house for that purpose? Will nightly rates plummet?

Thoughts?
Where? If you are talking Havasu, nightly rates will drop when visitors stop coming. That hasn’t happened yet.

Now is not the time in my opinion. Whatever is going to happen with housing hasn’t happened yet. If rates stay high, you will need more cash and a smaller loan to be profitable.

I would not want to enter that market at 7% interest hoping for lower rates in a few years, and then not be able to refi because the LTV is askew.
 

HNL2LHC

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agree with the others. We are not at a place where things are totally known. If you have $$$ burning a hole in your pocket and don’t need it to be rented to afford.then go for it. Otherwise I’d wait. 👍
 

Tamalewagon

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What do you think the status of this marketplace will be? Good time to buy a house for that purpose? Will nightly rates plummet?

Thoughts?
It depends...are you looking at this as a short term investment or long term? As long as the numbers pen out, the investment is solid. Most of the snow birds have solid retirements and have money to travel even in down times. As snow birding is less expensive to stay in a long term rental, it would be logical that the rental market would not take much of a hit. A lot of people will not have what it takes for a down payment or income to purchase a home in the next few years so the rental market will still be in high demand. That's my $.02.
 

Englewood

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STR I'd wait...I have some cash I want to invest badly but can't find a single long term real estate investment that even comes close to making sense. The first thing people will cut is travel/vacations. I don't see anyone missing the boat if they eagerly wait on the sidelines. Save every dollar you can...The opportunities are coming...

Some people will feel the pain, but many will make a lot of $$$ if they have positioned themselves right.
 

DrunkenSailor

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Feds Powell today: "We want to get housing market back on to a more sustainable path... I think you will see increase in housing prices to slow pretty significantly now... Higher interest rates are painful but it's the tool we have to bring down inflation... The greatest pain would be if we allowed this high inflation to continue."

As rates continue to rise (the next rate hike is predicted to be another .75) we will continue to see a reduction in affordability and a continued decrease in prices.
 

LargeOrangeFont

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STR I'd wait...I have some cash I want to invest badly but can't find a single long term real estate investment that even comes close to making sense. The first thing people will cut is travel/vacations. I don't see anyone missing the boat if they eagerly wait on the sidelines. Save every dollar you can...The opportunities are coming...

Some people will feel the pain, but many will make a lot of $$$ if they have positioned themselves right.

Let’s goooooo! I’m just hanging out waiting too.
 

GOTTBoat

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Feds Powell today: "We want to get housing market back on to a more sustainable path... I think you will see increase in housing prices to slow pretty significantly now... Higher interest rates are painful but it's the tool we have to bring down inflation... The greatest pain would be if we allowed this high inflation to continue."

As rates continue to rise (the next rate hike is predicted to be another .75) we will continue to see a reduction in affordability and a continued decrease in prices.
1.00 rate hike coming soon!
 

Englewood

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1.00 rate hike coming soon!
I'd be fine with that. Let's get straight to the point and get back on track. People much smarter than I am suggest that the rate needs to be higher than inflation, in theory.

That presents a couple issues:
1. We all know inflation is much higher than "8%"
2. If that theory is true, we have a huge gap to fill.

If that's the case, we are in a real tough spot.
 

LargeOrangeFont

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I'd be fine with that. Let's get straight to the point and get back on track. People much smarter than I am suggest that the rate needs to be higher than inflation, in theory.

That presents a couple issues:
1. We all know inflation is much higher than "8%"
2. If that theory is true, we have a huge gap to fill.

If that's the case, we are in a real tough spot.

I have a friend in the mortgage business with a mansion in Rancho Palos Verdes built on the tears doom and gloomers.

He says he has a suspicion rates may hit 10% before this is through.
 

LuauLounge

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Seen both before…..
I was thrilled to get a 9.75% 30 year, down from 11% five months earlier.
 

boatpi

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Worrying about the higher interest rate may not be an issue. I had a STR in Las Vegas a few years ago. Prior to Covid. They clamped down made it illegal in the city, so I jumped off. Clark County is going legal now, this can be at the least a silver mine.

It is all about the zip and peoples needs. I have a 5BR , 3,700 sq ft house with pool, on 1/3 acre just 5 minutes from the strip. RV parking, 3 car garage, all super theme deco inside. My highest return to me, after my agents fees deducted was 10K a month gross. Average was 6L per month gross. This can be a $$ business. I have a month to month now, I get 3,300.
 

Mike K

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I AirB&B our place in Park City.
Last few years have been great.
Then about 2 months ago AirB&B changed the way they do their listings.
IMHO … it appears they are beginning to cater to the hotel market and primarily to very upscale homes.
Their listing algorithm is totally new.
It will take some time to figure it out.
Sooo … you may want to check how you will market your property if using the AirB&B platform.
See if there have been any changes in Havi.
 

THE WIDGE

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I’ve been considering on selling my havasu house, and stepping up to our dream house, but unfortunately that’s like a mill plus currently. Originally I was thinking I can STR it to offset some expenses. But this new Bill passed and I’ve been trying to get a feel of how Havasu city Leaders will respond. I know in 2016 they wanted total control, but no laws allowed city. This Bill gives city power. Found this YouTube of mayor in interview last week. Looks like it rolled out March 1st.
 

Havasu Rehab

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I’ve been considering on selling my havasu house, and stepping up to our dream house, but unfortunately that’s like a mill plus currently. Originally I was thinking I can STR it to offset some expenses. But this new Bill passed and I’ve been trying to get a feel of how Havasu city Leaders will respond. I know in 2016 they wanted total control, but no laws allowed city. This Bill gives city power. Found this YouTube of mayor in interview last week. Looks like it rolled out March 1st.


I called the city regarding this about a week ago. They’re still ironing out the details as of now their only requirement is the yearly $250.00 permit. Everything else is the same (TPT license, 24 hour contact person, etc.).

They are not enforcing this as of yet because they have not rolled out the compliance process. There will be a grace period after the city makes formal notification to landlords. Formal notification will be sent via snail mail or email. The representative was still unsure.

I also received a letter from the county indicating that I must update the house as a rental. Sounds like they will be changing the tax brackets for STR’s. I have not followed up on that yet, but will soon. According to the Havasu representative, the County letter is totally unrelated to them.

Reading between the lines of the video, the mayor sounds like more regulation will be on the way. That’s purely speculation though.
 

Ziggy

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I’ve been considering on selling my havasu house, and stepping up to our dream house, but unfortunately that’s like a mill plus currently. Originally I was thinking I can STR it to offset some expenses. But this new Bill passed and I’ve been trying to get a feel of how Havasu city Leaders will respond. I know in 2016 they wanted total control, but no laws allowed city. This Bill gives city power. Found this YouTube of mayor in interview last week. Looks like it rolled out March 1st.
I like a good party as much as anyone else. However, I don't see holding someone accountable as an issue for out of control situations.....like firing fireworks at & in my neighbors boat.
 

Riverbottom

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I called the city regarding this about a week ago. They’re still ironing out the details as of now their only requirement is the yearly $250.00 permit. Everything else is the same (TPT license, 24 hour contact person, etc.).

They are not enforcing this as of yet because they have not rolled out the compliance process. There will be a grace period after the city makes formal notification to landlords. Formal notification will be sent via snail mail or email. The representative was still unsure.

I also received a letter from the county indicating that I must update the house as a rental. Sounds like they will be changing the tax brackets for STR’s. I have not followed up on that yet, but will soon. According to the Havasu representative, the County letter is totally unrelated to them.

Reading between the lines of the video, the mayor sounds like more regulation will be on the way. That’s purely speculation though.

Some county's are changing short term rentals to commercial on their tax assessment. Figure most places it will double the property tax.
 

Ace in the Hole

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I’ve been considering on selling my havasu house, and stepping up to our dream house, but unfortunately that’s like a mill plus currently. Originally I was thinking I can STR it to offset some expenses. But this new Bill passed and I’ve been trying to get a feel of how Havasu city Leaders will respond. I know in 2016 they wanted total control, but no laws allowed city. This Bill gives city power. Found this YouTube of mayor in interview last week. Looks like it rolled out March 1st.
Talk to the neighbors around it, be up front, set some ground rules for what is and what is not acceptable. First dick head that tried that next door bit off more than he could chew, renting to every tom dick and harry to try to cover his nut (these homes are over a million). Beer bottles over the wall into our pool, break ins of neighboring homes by his trashy tenants (including mine), mariachi music all night on the 4th of July, trash bags dumped over our wall, domestic violence calls, local kid parties of 50+ people, a brawl in the driveway etc. I was done, as were the other neighbors. City, LHCPD etc got involved... the owners came once ever when they bought it, never saw them again. Their property management company, and its rep were worthless...but thats another story. It turned into a war...and a war that he lost. Fuck you Jeff if you ever read this.

Fast forward to current owners....Amazing people, paid cash, they are boaters etc. They upped the price and don't consistently list it. If they rent it we get a text as do the other neighbors, if we have an issue its promptly dealt with. Complete night and day difference. Never ever had an issue since. Talk to your neighbors.
 

THE WIDGE

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I called the city regarding this about a week ago. They’re still ironing out the details as of now their only requirement is the yearly $250.00 permit. Everything else is the same (TPT license, 24 hour contact person, etc.).

They are not enforcing this as of yet because they have not rolled out the compliance process. There will be a grace period after the city makes formal notification to landlords. Formal notification will be sent via snail mail or email. The representative was still unsure.

I also received a letter from the county indicating that I must update the house as a rental. Sounds like they will be changing the tax brackets for STR’s. I have not followed up on that yet, but will soon. According to the Havasu representative, the County letter is totally unrelated to them.

Reading between the lines of the video, the mayor sounds like more regulation will be on the way. That’s purely speculation though.
I agree about reading between the lines. Shit I registered to the Havasu Hearald to read each article written on this topic over the last few months, and even back when city tried flexing in like 2015-16. I wasn’t getting the clarity I needed from agents at open houses I stopped by, and common sense told me everything wasn’t an issue as some indicated. Shit I was more versed on this than a few (nobody from RDP). I guess we will see what the next 7 months has in store as we enter spring/summer.
 

DC-88

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Some county's are changing short term rentals to commercial on their tax assessment. Figure most places it will double the property tax.
As much as property rights are good, nightly rent and bed tax goes directly against the zoning so it has merit. In our town there is a 300' separation spacing rule for the licenses, and the guy 2 doors down with vacant a lot between us has held it for 30 years, so he is "the one" . Excessive trash, too many cars, Christmas trees and boxes in my dump trailer in the alley out back , etc etc. One Friday night about 15 years ago we were doing a Texas hold em' for adults + swim for the little kids party when a couple young kids knocked on the door......" uh , we are having a few friends over and if it gets too loud here's our cell to call directly, please don't call the cops " . No problem . So about 9:30 the techno is pumping and my cousin Julie and her friend announce they are gonna head over to check it out. They came running back and said everyone up, you gotta' see this shit. We went over , all the furniture was out in the front yard and down by the creek, black visquene stapled to all the walls, glow sticks , gel, black lights, dj, everyone in their own X fueled Nam and the house trashed. It was awesome, couldn't have happened to a better guy, and we have great quality windows and insulation so still slept like a baby. The enforcement is now gestapo status here too, so things are mellow but STR do ruin the true sense of community.
 

Riverbottom

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As much as property rights are good, nightly rent and bed tax goes directly against the zoning so it has merit. In our town there is a 300' separation spacing rule for the licenses, and the guy 2 doors down with vacant a lot between us has held it for 30 years, so he is "the one" . Excessive trash, too many cars, Christmas trees and boxes in my dump trailer in the alley out back , etc etc. One Friday night about 15 years ago we were doing a Texas hold em' for adults + swim for the little kids party when a couple young kids knocked on the door......" uh , we are having a few friends over and if it gets too loud here's our cell to call directly, please don't call the cops " . No problem . So about 9:30 the techno is pumping and my cousin Julie and her friend announce they are gonna head over to check it out. They came running back and said everyone up, you gotta' see this shit. We went over , all the furniture was out in the front yard and down by the creek, black visquene stapled to all the walls, glow sticks , gel, black lights, dj, everyone in their own X fueled Nam and the house trashed. It was awesome, couldn't have happened to a better guy, and we have great quality windows and insulation so still slept like a baby. The enforcement is now gestapo status here too, so things are mellow but STR do ruin the true sense of community.

I am not a fan of STR and would like to see them stopped. They all suck in my neighborhood in the Keys in Parker.
 

DC-88

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I am not a fan of STR and would like to see them stopped. They all suck in my neighborhood in the Keys in Parker.
My next door neighbor at the river rented his out for about 18 months. It was booked solid March 10 to about Oct 10 at $450 to $750 a night, but it was such a pain he stopped doing it thankfully. His ramp upstream from mine with qualified captains slicing and dicing their trailers in the current ending up onto ours, along with random pit bulls coming over when the water was low got old real quick ( most of the pit bulls and other dogs were ok except for one that went straight to try and bite my wife sitting in a beach chair that almost got put to sleep with a piece of rebar :)) . At the beach in Ca the end around to the rules is the 30 day rental . This is a month to month bogus lease type deal and pretty much all the rules for the STR go out the window. All of the property managers have 30 day properties listed which are the ones who can't get the str license. There's plenty of motels for sale on loop net .
 

J DUNN

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I have a 5 bedroom STR in Provo, UT. It's been good the past couple years but just saw a huge drop in upcoming reservations. Somebody approached us asking for 4 month lease for a discounted rate from what we list for on Air BNB and VRBO. We took it. Also helps that we have a basement apartment there that rents long term. Only need the upstairs booked for 7 nights a month to cover the mortgage.
 

RiverDave

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STR I'd wait...I have some cash I want to invest badly but can't find a single long term real estate investment that even comes close to making sense. The first thing people will cut is travel/vacations. I don't see anyone missing the boat if they eagerly wait on the sidelines. Save every dollar you can...The opportunities are coming...

Some people will feel the pain, but many will make a lot of $$$ if they have positioned themselves right.

For Long Term Rental call Stacy about the Hubble property.. It's a mobile with a stick built 57' garage for a fair price..

RD
 

THE WIDGE

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Ultra912

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California wants to fuck everything up for cities similar to Havasu: Example: Mammoth Lakes. 85% of their budget is from STR fees. 15% increase in TOT fees will kill a city like that
 
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