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earlyretirement
ParticipantI’d recommend going several times of day including rush hour and also the weekends.
We looked at a few homes in Collins Ranch in Carmel Valley which is not as close to I-56 and surprisingly we could hear traffic noise from cars even on the weekend when there wasn’t much traffic. The sound from the cars tend a tendency to echo. I’m not sure if it was just that day we went or if it’s always like that.
But for us personally, no way I was going to spend over $1 million on a house and have to worry about keeping my windows shut due to noise from the highway.
I guess it’s just different for different people so you have to determine how much it bothers you. Some people it’s not a big deal but others it’s a no go.
Just keep in mind the weather is so great in San Diego that you’ll have your windows open for much of the year so it just comes down to a personal tolerance level for yourself on the noise.
Which development is this in? Is this the new stuff they are building next to Pacific Highlands Ranch?
For reference, here is the house we visited:
http://www.redfin.com/CA/San-Diego/14098-Collins-Ranch-Pl-92130/home/6483283
Participant[quote=moneymaker]Sorry I should have added 30 “T-bills”.[/quote]
Ah..Ok..got it. I’ve been out of the country a few weeks and just got back. Yeah, it is amazing but I can’t wait until interest rates go back up. This has been PAINFUL for us savers….
ParticipantWhere are you seeing 30 year fixed under 3%?
ParticipantI bought some AAPL the last time it crashed and it’s performed very blah since then…. The one thing that has really helped is selling covered call options on it. I’ve sold the forward or 2 months out $500 call options and that has helped generate some cash. I’ll probably continue to keep selling covered call options on them until they get called away.
I hear a new Iphone is supposed to come out this summer so hopefully that helps. Goldman just dropped them from their must buy list earlier this week. That didn’t help.
I just picked up some silver this morning (SLV).
Participant[quote=livinincali][quote=bearishgurl]
IF there is a RE bubble in the coming years with “investor actors,” it can’t crash. WHY? If one pays cash, how can they “crash?” A “cash buyer” doesn’t HAVE to sell unless it suits them. If values should decline again, these “investor-actors” will just continue to hold and rent these many thousands of properties out, which is 75% of the reason they are being bought up today. Meanwhile their REIT investors will have nice monthly or quarterly returns on their “investments.” :=]
[/quote]I don’t think we’re in a bubble with regards to real estate, but I’d be willing to bet a lot of that hedge fund investor cash is really some kind of leverage debt. That’s what hedge funds do, they leverage investment dollars in order to produce better returns. Some investor in real estate is bound to over leverage them self and get in trouble. It always happens. The only question will be are they big enough to have an impact or not. In San Diego maybe not, Las Vegas or Phoenix it certainly seems possible.
The thing to worry about is when these investors decide to exit. They are going to liquidate quickly and there isn’t going to be any emotional attachment. They aren’t going to care if their bulk selling drive prices down in your hood. They just care if they can get their investment out and into something else that looks more appealing. They’ll even take a loss if it means they can chase the next hot money investment.
It’s going to suck if you have to compete with them when you want to sell.[/quote]
I wouldn’t worry too much about these “hedge fund investors”. Most of the hedge funds I’ve invested in have had minimum accredited net worth levels of $1 to $2 million+ (besides your primary home).
What is going on this go around is much different vs. the last bubble when banks/lenders were giving anyone with a heartbeat a loan to buy/refinance.
The last go around I personally knew many people that were buying multiple houses with the banks money. This time around, I know many people that are buying multiple properties with their OWN money (many of them paying cash).
Last time many people were buying to flip. This time many people are buying and holding for cash flow via rentals. I’m certainly not saying the market won’t/can’t go down again. Because things move in cycles and it certainly can. But people shouldn’t confuse what happened then vs. what is going on now.
Participant[quote=bearishgurl][quote=all] . . . it’s all right.[/quote]
Actually, it isn’t “all right” now and is going to be less “all right” later for property owners within the PUSD.
If I owned any kind of property at all within the PUSD, whether residential, multifamily or commercial, I would be listing it for sale NOW, in hopes I could unload it before the SHTF.
This intractable problem can only get uglier as time marches on.
But far be it from me to attempt to burst the fantasy bubble you seem to be living under …[/quote]
Actually I disagree with you BG. Don’t get me wrong. I TOTALLY agree with you that the PUSD was careless and reckless to do those Capital Appreciation bonds. None of those people should ever hold public office again!
Yes, it WILL cost PUSD homeowners in the far future which is unfortunate. However, taking a closer look at the numbers, you’re not talking about huge amounts of money for the typical owner. I think I read somewhere the average homeowner would pay less than $600 to $700 more per year. Maybe I’m wrong on the exact amount so correct me there if I’m wrong. And even homeowners like me that have $1+ million valued houses will probably pay less than $1,800 per year when it’s all said and done.
The wildcard factor will be if the PUSD remains an excellent school district. Because if it does, then parents will gladly continue to pay the higher tax rates to live in the area. (Heck, even without kids, I’d pay the higher tax rates to live in the area I do…it’s amazing).
I bought where we did in large part to being in the PUSD and I don’t regret living here for a second. In fact, we love love love the area. Mello Roos wasn’t fun but even on those we have pre-paid off. I find it totally worth it to pay the taxes and live in the area and send our kids to the schools here.
It’s not like you’re not getting something for the high taxes we pay. So it all will depend on how viable the PUSD stays in the future, IMHO.
BG, just out of curiosity, why are you so down on this area? I haven’t been around too long on this board but even before I bought it seems like you always looked poorly on much of North County. Is there some personal bias against it?
I don’t think anyone can argue against all the positives of the area/school districts but you seem to be down on it quite a bit so I was just curious about that. You seem to prefer/push Chula Vista. I don’t know much about Chula Vista other than the fact that I’d never have any interest/desire to live there. I know many other like minded families that probably have the same opinion.
But is your preference and comments just based on the fact you live there, it’s more expensive here, and the taxes are lower there? I was just curious about that part.
ParticipantYou’re certainly welcome. I hope you find some of the information useful. I wish this kind if stuff was available when I was getting started but I just learned by trial and error.
Absolutely I practice what I preach. My family and I have been traveling around the world over 100 days each year for the past several years and we almost always rent a property or do home exchanges vs. staying in hotels.
Much better value for the money and also with young kids it makes life much easier. It’s also great “living like a local”.
Also I forgot to mention that Homeaway.com and VRBO.com have packages you can combine. It saves money getting the bundled package if you want to list on both. I just renewed today on several of my properties. The Platinum package is $1300 to list on both. And a good tip is to call them when signing up and ask for 13 or 14 months for the price of 12. They usually will do that if you ask.
Also AirBnB.com has gotten very smart. They will actually send out a professional photographer on their dime to publish photos on their website so definitely worth taking advantage of.
Keep us posted how things turn out. Good luck.
Participant[quote=cvmom]ER, you are a pro. I have only ever been on the receiving end of short-term rentals, but I definitely want to stay in one of your properties! Very impressive. I can see why you have been as successful as you have in life, you certainly deserve it.[/quote]
Thanks so much for the really nice comments cvmim! I appreciate it.
As others mentioned, it’s a LOT of hard work and really you have to put a value on your time. But if you set it up properly, willing to make the investments and separate your rental property from all the other “junk” out there you should do very well.
My friends always razz me about sharing so much information with potential “competition” but my theory is that the more people that take this seriously, the more interest and market it will create. The short-term vacation rental market has exploded over the past decade and I’m very thrilled to be a part of that explosive growth.
I LOVE seeing other people successful doing the same thing. And the greatest sense of achievement is when guests tell me things like “I’ve never had a better vacation, never stayed in a nicer more organized property, etc”. Also I love, “your apartment looks just like the photos”. If you do it right, you should hear those things all the time.
The thing is it takes time and money to do it properly but absolutely there is a lot of money to be made if you set it up properly from the beginning.
Participant[quote=FlyerInHi]ER, I got my condo and following your advice. It’s keeping me busy.
The condo HOA does not allow short term rentals but I’ll try to work around it.[/quote]
Oh yeah, that was one thing I was going to strongly advice that you check BEFORE you buy your properties. I always look at the HOA bylaws before buying to see what restrictions are in place.
Even if I’m not buying to do “short term rentals” I always am mindful what it is in case I want to convert it to a short-term rental in the future. Some places (like where I live now) have at least a 1 week minimum.
However, the thing is, unless your guests are being totally loud and not respecting the other neighbors, you typically won’t have any problems. What I’d recommend doing is saying they are “friends or family” when you authorize them to enter. And it’s a good idea under that situation to just be honest with the guests and tell them the building doesn’t like the idea of short-term rentals so tell them it’s best if anyone asks to say they are friends, etc.
Just because a building didn’t restrict the short term rentals before you bought doesn’t mean they could in the future. Rules can always be changed. I’ve bought in buildings that didn’t forbid it until a few years later and I had to deal with it after that. I had to shift from doing shorter term rentals to longer term rentals.
As long as the guests are very respectful, not throwing loud parties, etc. then most likely you won’t have any problems. Also, if you have pain in the ass neighbors that see the listing and want to make trouble they can. So in that case, it’s best not to be too specific in the listing with the actual building/location and just be more general in nature about it. And especially avoid photos of the outside of the building, etc.
What I’ve found is it’s typically just one pain in the ass neighbor that is envious of the money being made. The vast majority of other neighbors don’t mind it at all. I’ve even had to hire lawyers before to continue to be able to do them in some buildings.
If you have a doorman in the building a good tip is to tip! Generally in many of the condos/apartments that I own, I’ve found that the doorman really control everything. You keep them happy and they keep you happy. I typically tell my tenants it’s a good idea to tip the doorman after their stay. And I also do as well as buying them a birthday present and Christmas present. They LOVE the guests because they are always getting tipped so naturally when someone asks them, they tell them that the owner and his guests are VERY respectful people. LOL.
Also, another idea especially if you won’t live there is it’s a good idea to buy your immediate neighbors a nice bottle of wine with an introductory letter introducing yourself and telling them why you chose to buy in that area. You can mention your love of your area and “second home” and also a chance for “extended family and friends” to use it.
Basically it sets an immediate expectation that there will be people using it. I’ve found a letter and wine helps VERY MUCH. You can also tell a bit about yourself and your family. It personalizes you and turns you into a human instead of just Joe Q. Landlord.
In a high-rise building with multiple tenants on the same floor I’ll typically send the letter/gift to everyone on the floor. If it’s an older building with only a few apartments per floor, I’ll send it to everyone in the building.
Also, make sure you check with your city to see if there is any short-term rental taxes or registration that you need to apply for. Some cities like Santa Fe have short-term rental permits that you have to apply for as well as applicable taxes. (Example shown here: http://www.santafenm.gov/index.aspx?NID=1229 ) The wisest thing if you are running this like a serious business is to make sure you are up to date on everything and in compliance with the city.
Just my 2 cents of things that I’ve found REALLY helped over the past decade renting out short-term.
PS – FlyerinHI, something I forgot to mention is I would strongly recommend buying a nice label maker like this one – http://www.amazon.com/Brother-Connectable-Labeling-System-PT2730/dp/B0047T7JMW
They are GREAT if you own a short-term rental property. It’s always a great idea to label everything. You can create sharp and professional looking labels and put them on everything. For example, although you have a detailed welcome guide explaining everything, you can put the network name and password label on top of the wi-fi router.
On ALL the telephones (cellphone, local line, etc) I label and have the phone number on each phone. This makes it VERY easy for people. With all the technology out there I often times have remote controls for the TV, DirecTV, DVD player, Apple TV, etc. I label all of these remote controls and on the back you can put which input to select on the TV so they understand everything quickly.
People wouldn’t think things like this are a big deal but you’d be surprised how much guests appreciate it. It’s things like this that separates a good short-term rental from a GREAT short-term rental.
March 31, 2013 at 11:59 AM in reply to: $64,000 Question. What raises property values in HOA neighborhood? #760946ParticipantI’ve NEVER liked HOA until I moved to San Diego to where we live now. I guess part of it is I didn’t have kids before and also I always felt the HOA didn’t do much or that I didn’t have much included in my HOA fees.
But I have changed my mind on it now. So I guess it all depends what is included in the HOA fees and how good of a job they do. Where I live the HOA fees include 24/7 security guards at the front gates, maintenance of the entire development which is always pristine, Cable TV and high speed Internet (I get 20 MB download speeds), and trash pick up included in the HOA fees.
The monthly fees are $440 which I consider not bad at all for all that is included in it. Other properties I own are a few hundred bucks a month and not much is included in it.
I actually like that owners can’t paint their houses pink or some funky colors, people can’t park some car leaking oil in the street, there are minimum levels of maintenance people have to do on their lots, etc.
I feel these things really help with value of the properties when the development is so nicely maintained. I really changed my opinion on HOA after moving to San Diego.
It’s a monthly fee that I don’t mind paying each month now. I wish I could say the same thing for other properties that I own where I feel it’s a rip off.
Participant[quote=bearishgurl][quote=moneymaker]I will put it out there that I think paying for mortgage insurance is the biggest rip off going. If the risk was put on the banks then they may not have been such extravagant lenders during the bubble days.
-snip-[/quote]
MM, PMI has always been a FNMA requirement for mortgages of more than 80% LTV (not sure about Freddie Mac, since most of those mtgs pre-bubble were “in-house” Prime and Alt-A ARMs).
The only mortgage option today out of PMI is to put 20% down or get an FHA loan (w/now exorbitant MIP) or get a VA loan with 0 down and pay the funding fee and up-front points (if any) as sellers in this region typically no longer will.
Otherwise pay all cash. There is no free lunch.
It’s as it should be, IMHO.[/quote]
[quote=SD Realtor]As much as the conditions are great now, saying that the bank took no risk on your loan is a false statement. 5 years ago that was not the case. 5 years from now it may not be the case. Like it or not you signed a note that had several stipulations to it and in exchange for that note, you were lent a couple hundred thousand dollars. If you do not like the terms of the note then you should not have borrowed the money. Removal of PMI is not hard and has much more to do with comps then the pergola and matching chairs. I don’t mean to be harsh, just being honest.[/quote]
[quote=SD Realtor]If you believe present day risk has anything to do with future risk then this is a waste of time. Pay for the appraisal and get rid of your pmi. It is not terribly difficult.[/quote]
I totally agree with both BG and SD Realtor here. There is always risks involved for the bank. No free lunch as BG mentioned.
March 20, 2013 at 5:25 AM in reply to: OT: No Surprise. . .A Retirement Crisis is Coming to a Country Near You. . . #760722ParticipantYep. The numbers/data is SCAREY! I read the same thing in the Wall Street Journal yesterday.
http://online.wsj.com/article/SB10001424127887323639604578368823406398606.html?KEYWORDS=retirement
The sad thing is I don’t think people are getting this “wake up call”. Everyone keeping hitting the “snooze” button and wants to sleep in. It’s not going to be pretty.
Participant[quote=FlyerInHi]Hi Early,
Thanks for the detailed answer.
Yes, I understand it will take a lot of time. I’m no couch potato and I like running around to get things done. In fact, I just remodeled the kitchen in a rental (I did hire someone for the granite counters though). I find there is satisfaction to building things with my hands. I’m about to do the bathroom and all the wood floors so the place has a unified look, in the style of a W hotel suite.
My friend owns a 4-plex in Fl near the beach and he has tremendous return. Nothing luxurious, just plain but in a good location.
Taking your advice, I’ll give the VRBO style rental a whirl and see how it goes. I’m about to close on a “luxury” condo so I’ll add it also.
We pilots, in the airline industry have “crashpads” that we share in base cities. The owners make tremendous ROI. Some crashpads are very nice with only a few people sharing. Other crashpads are filthy and disgusting. But the returns for property owners are great.
I’m pretty detail oriented so it will be a challenge rather than a chore for me.
Also, what style of decoration goes best with most renters? I want to do it so that most renters would agree that it’s nice. I like your suggestion of the “luxury” feel.
Thanks again.[/quote]
You are certainly welcome FlyerinHi.
I’m not saying you have to answer them yourself but generally speaking you can cut down on a LOT of time if you make customized templates on your Outlook program. So for every response, you automatically click a button and it responds. You just need to customize their name, the # of nights, price, deposit amount but everything else will be filled out. It literally takes me about 10 seconds to respond just filling in those template items.
Also, you can make a template responding if you’re already booked. Template for confirmed confirmation once they send the deposit, etc. You will just find things that cut WAY down on the time it takes you. Like I said, you almost become an expert after a while. You find little tricks that work.
Remodeling is a good idea. I almost always do a renovation and upgrade it. Something that works for me is trying to get something in the best locations yet get properties that might need a lot of work. If the floor plan works for a rental then I’m willing to gut it completely and spend money. You can always change the property but you can never change location.
The W style modern place is what I find is the most popular bookings. People tend to book renovated modern properties that are furnished well. You can go modern but not too modern on the furniture. But people appreciate the latest technology.
Hardwood flooring is GREAT and I think a great investment. Carpet is always a NO NO for a rental. People think they are saving money using carpets but at the high end, imagine if people spill wine and you have to get it replaced. It’s not a question of the rental guest not paying to replace it… but if you have a luxury rental and you kill a day or two not being able to rent it out, that “spill” can cost you hundreds/thousands of dollars in lost income.
People that are paying for a luxury experience won’t put up with a wine stain on the floor. So always have that mindset. Remember a rental night is like life…once it goes by you can NEVER get it back. 🙂
Funny you mention crashpads. I have several pilot friends/clients that own crashpad rentals. Some do VERY well.
What I’d suggest is modern decor, neutral colors. Don’t make the mistake of thinking what YOU like as far as decor works for everyone. The biggest mistake I see owners that also use their properties is decorate/furnish it in a style THEY like. But if it’s a true investment you have to furnish and decorate it in a style/manner that won’t offend the masses.
That means neutral colors, nothing loud, NO religious decorations/photos of any kind. Well decorated and not bare. So if you have a big bookshelf don’t just keep it empty. Fill it in with books or decorations.
For bedrooms I always go with Large King size beds. For single businessmen they like them and for couples they also almost insist on them in a luxury rental. Go with one of the most comfortable on the market. Don’t scrimp on an excellent mattress. It’s the #1 reason why guests tell me they came back. The vast majority of short-term rental owners out there use cheap, uncomfortable mattresses. Not many rental owners are willing to spend $1,500 to $2,000 on a mattress. It’s hard for them to see the bigger picture.
What I like to do is stay a night or two in the poshest 5 star hotels in the town you own in. See what features they have. See what you like and don’t like in those rooms. Also, see what kind of mattress they use there and in many cases, you can even advertise in your VRBO/Homeaway/etc. listing that you have the same mattresses as “X 5 star hotel”. Use what works and avoid what doesn’t when it comes to the 5 star hotel.
Take note of how many sq. feet their luxury suite is and compare it to your property. If you do it right, the hotel won’t really be able to compare to your set up.
Also, definitely try to have a washer/dryer in your place. Even if it’s a small place try to find room for it. It opens up a lot of possible rentals.
You will find the clientele for that kind of property are GREAT as they take excellent care of the place. The more affluent types are typically are older so I avoid the cheap backpacker types that can’t afford my places for the most part and NOT the clientele I’m looking for.
Also, when you stay at that 5 star hotel, chat up the concierge and ask him/her how much corporate travel they have and ask them what are the busiest companies. I’ve never had problems getting the name of companies that have a LOT of corporate travelers in town. If you are nice and tip well the concierge or front desk will typically give you that information.
Then you can send targeted mailings/brochures to the companies in town that constantly have corporate executives in town (obviously this wouldn’t apply if you’re a 100% vacation city) but even those cities typically have conferences, etc.
If you set it up right, the vast majority of people would rather stay in a bigger property that offers so much more. (full size fridge/freezer, local cell phone, unlimited calling locally as well as internationally, free wi-fi internet that is faster than hotel, printer, stove, kitchen, washer/dryer, etc).
And of course companies would like to pay less vs. expensive suites at hotels. You can think outside of the box a bit to make it more of a success. What you will find if you do it right is things can snowball fast. Word gets around, company exec talks to other company execs and you can find your place busy.
Also, for any of you corporate executives out there that travel over and over to the same city and your company picks up the bill, you might even want to think about buying your own place and then staying in your own place.
Many companies don’t care if you stay in a short-term rental vs. a hotel. To them they give you a maximum per diem accommodation credit per night. I’ve helped clients structure this before. Where I’ve helped clients buy a luxury pad and he stays in his own place and charges himself the maximum nightly rate.
NO rules are being broken and it’s allowed. He would have spent the money anyway in an expensive hotel suite that he normally stayed at. (His per diem was like $650/night as he was a C-suite executive). Well, let’s just say his place makes a GREAT return. He almost has the place completely paid off with his own “stays”. Also, the funny thing is he has colleagues that stay in it. He never mentioned that it’s his. All invoices are in the name of an LLC billing him.
Like I said..sometimes it’s great to think outside of the box on these rentals.
Participant[quote=sdduuuude]Short-term rentals make the revenue and return on investment look pretty good, until you put a dollar value on your time. I know people who have one house on VRBO and it takes alot of their time. You never get a vacation from it.[/quote]
Absolutely! You really have to put a value on your time. You will spend oodles and oodles of time on it. Especially if you do it right. Not to mention, you can spend a LOT of money marketing the property. I spend over $2,000 a year on each property advertising and marketing them. It’s not cheap.
Especially if you answer your own potential bookings. I do it all myself on ALL my properties and it’s a LOT of work. You can spend a lot of time. Emails, phone calls, etc. Of course it helps to put as much information possible on your listing so it will answer many of the same questions.
After a while you get it down to a science. I do agree it’s not for a lot of people but I know several people that make significant amounts of money doing it.
And of course it just depends on the actual property and the area and how desirable it is. I had a property a few years ago that I was getting $8,000 a week during the high season. Now THAT was a GREAT investment property.
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