New! Dark mode!

Browsing Pinside at night? Getting tired of all the white? Switch to dark mode using the button in the top right (or CTRL-B)!

(Topic ID: 273925)

Sell it, Rent it, or AirBnB it?


By mcluvin

3 months ago



Topic Stats

  • 35 posts
  • 22 Pinsiders participating
  • Latest reply 3 months ago by mcluvin
  • Topic is favorited by 2 Pinsiders

You

#1 3 months ago

I'm moving out of state. Own my current home free and clear. I don't really want to sell it. I'd like to rent it out in some way. I'm 1/2 hour from the beach (Daytona) and 1 hour from the major theme parks (Orlando). There is a large private college nearby. It's a 4/2 with roughly 2400 sq ft in a good neighborhood. Somebody please school me? It would not be a problem at all to offer it nicely furnished. I don't want to deal with daily BS from renters.

#2 3 months ago

there are real estate agents that also do rental service ...you just pay them a monthly fee ...I had a couple of apartments that were three hours away from me but it was the best decision I ever made....adjust your rent accordingly ... they do the credit checks and vet the prospective renters ....a good paying tenant is worth their weight in gold and guaranteed monthly income ....the last thing you want to end up with is a renter that doesn't pay ,its like trying to get gum off your shoe total PIA and you have to be there for the court case, you are better off with a full time renter because they don't trash your property. Been there done that and don't wish to do it again. You can also get an agreement with them to handle maintenance. if your hours away it is your responsibility to get things fixed in a timely manner

just my two cents

#3 3 months ago

Hard to be a landlord in a different state.

LTG : )

#4 3 months ago
Quoted from LTG:

Hard to be a landlord in a different state.
LTG : )

It’s hard to be a landlord in the same state even.

Sell it or work with a company to manage it for Air BNB. Been renting out my first house because I was under water and the market wouldn’t allow me to sell for what I owe on the mortgage. 4 different families. 4 entire renovations. Nothing but stress, destruction, and expenses. Wouldn’t recommend renting to my worst enemy.

I know there are people that are successful but you need a lot in your favor. Seems the positive stories are outliers in just renting out one single family home. I’m not talking about people that own 20 places and apartment complexes.

#5 3 months ago

We have a 7 BR beach house on airbnb in Destin that does well, my wife self manages remotely here in TN. We also have a local one as well that my wife handles. I think you'd probably do well with it but would need a reliable cleaning agency (that's big). The renter pays the cleaning fee on top of the nightly fee. You could search airbnb for similar size houses in the area to see what it would bring. I would do that before I would do a long term tenant in the area you describe would be much more profitable.

#6 3 months ago

Keep it and rent it out. If you do not wish to deal with management-have a management company do it for a fee. Add the fee to the overall rent that you would like to get. Most millionaires have at least five streams of revenue coming in.

#7 3 months ago
Quoted from pinmister:

Keep it and rent it out. If you do not wish to deal with management-have a management company do it for a fee. Add the fee to the overall rent that you would like to get. Most millionaires have at least five streams of revenue coming in.

Huh, now I’m wondering how come I’m not a millionaire?

#8 3 months ago
Quoted from LTG:

Hard to be a landlord in a different state.
LTG : )

Hard to be a landlord, period.

#9 3 months ago

About 10 years ago a girl I worked with was going to sell her house because she was getting married. It was a small place, maybe 900sq, on a slab, no basement, but she owned it free and clear. In 2010, in her area, she coulda got about $50k for it. I told her she could sell it, and have that 50k once, or rent it out for $1000.00/month and get 50k every 5 years (deducting a couple grand a year for taxes/ins/expenses).

She ended up keeping it, renting it out, and her and her new hubby have now flipped 3 or 4 houses themselves.

A house that's paid off is a cash register. Being out of state, you'd obviously have to use a maintenance service. Worst case scenario, rent it out for a year or two, if it's too big a hassle, sell it.

My wife and I are looking to move someplace with a pole barn. If we do we'll rent out our current house (been here 5 years) rather than selling, because we may move back here when we downsize (like that'll ever happen). We can renovate before we move back in and write that off as rental expenses. Incidentally, that's how we got our other 2 rentals, we used to live there, moved, and have rented them for 6 and 10 years respectively.

#10 3 months ago

Above post says it all. Paid in clear= cash register.
Rent it and forget it.

#11 3 months ago
Quoted from Ericpinballfan:

Rent it and forget it.

Till you get that midnight call that they plugged up the toilet again, and that the living area is now a lake.

#12 3 months ago

If you truly don’t want the hassle of being a landlord, sell it and take the $500K capital gains tax exemption.

#13 3 months ago

Thanks for the feedback folks! Sounds like a management company is the best way to go for me. Zillow suggests I can get ~$2K monthly as a long term rental. With Airbnb I can't find any comps in my city (might be a good thing), but the next town over I'm seeing ~$150 per day/$1K per week / $4K per month.

For those of you using a management company and Airbnb, what is each's cut of the rent?

#14 3 months ago
Quoted from mcluvin:

management company

Management company normally gets 100% of the first month, then 8% a month after that.

#15 3 months ago

Sell it and invest in the stock market. No renters or hurricanes to have to deal with.

#16 3 months ago

Long term rent with a property manager. That will be lower maintenance than short term renting where you have to constantly manage. Be super picky on renter. Do credit check, background check, references, the works. Don’t be the nice guy and rent to someone who doesn’t cut the mustard but has a sympathetic story. By the way I’ve hired four property managers and none have ever asked for first months rent. That sounds steep. The 8% figure sounds about right tho.

#17 3 months ago

Advice threads like these are tough because no one fully understands your situation (how badly you need/want the cash flow/tax consequences of converting your house to a rental property/etc). Also determining whether you want cash in hand today versus cash flow in the future is other context we do not have. Make sure you consult your accountant FIRST before you rent out because you can't undo something like that from a tax perspective. Be aware the the sale of your primary home versus a home for income purposes has different consequences that need to be considered by you or your professional.

If you want to keep the house because you like it / have attachment and think you will one day go back to it that influences your decision. If you never plan to move back and just can't bring yourself to sell it that also influences your decision. If it is a pure cash flow move that is fine as well but a *completely* different analysis.

As for anecdotal renting comments--

Life is short and I never want to deal with a rental property again personally. For some years I rented my condo out hoping the value would increase over time and then eventually I sold it just to avoid aggravation. I had top notch tenants and the condo association did a lot of the work on exterior matters but it still was work for me. When an appliance broke I felt terrible and dropped everything to get it fixed, etc.

I charged about 10-15% below market rent and got my pick of tenants because the place was nice and priced so well. Seeing people's credit reports is eye opening. Depending on the area you rent many people who rent do so because they can't afford to buy. In my area, people will pay [FOR EXAMPLE] $1,000 a month to rent a place that they could buy/mortgage for only $750 a month but their credit prevents this. Therefore your main customers are almost automatically a financial risk to you.

Friends made fun of me because I was renting a place for a few hundred less than I could otherwise get. Meanwhile they charged top price for crappier places but constantly had to evict and deal with damage. I am sure I came out better in the end financially but even if I left a bit on the table who cares?

My rental was cash flow positive (had small mortgage which was covered and all other expenses covered with some money in my pocket each month). Regardless the day I sold that place it was like a huge monkey off my back. Some people are cut out to deal with owning real estate and others are not. I had minimal aggravation but still don't want to own property others are living in.

#18 3 months ago

The last place I would invest right now is stock market, it has been overly inflated for the past few years (artificially pumped up) and the correction is definitely coming.

#19 3 months ago

It all depends on where the property is. The area you describe would do well as a short term rental, if you don't mind the extra time spent responding to booking inquiries and communicating with the cleaning agency. Ours does extremely well. We put Amazon Blink cameras on the exterior and digital deadbolt locks so we can easily control when they have access, and know when they check in and out.

We also have many long term rentals (around 100). We have a property manager that does everything for us, for 8% of the rents collected.

They return about 7-8% a year after expenses vs what the market value is now if we sold (and would have to pay uncle sam so would net less). I would much rather invest in rental property than the stock market. I took our 401ks and put them into properties 15 years ago, and it was a good move for us. Plus I can always use one of them to hold more pins, haha.

#20 3 months ago

one important thing to consider is how long you plan to rent it.

Capital gains tax free applies to primary residence that you live in for 24 out of the last 60 months you own it (does not need to be consecutive months).
This can be huge.

You could rent for 3 years and then sell and still get those capital gains tax free.

Biggest thing for me is that I would not want to rent a place so far away. Ease of managing is very important to me personally. Headaches will happen but mitigating them is what I care about.

This question is a pretty simple math problem.
Happy to assist with full details if you want to put out hard numbers.

I personally would take the tax free capital gains and buy multiple rentals if the landlord path is the one you want to jump in on.
Leverage that $$$$ to make more for you.

#21 3 months ago
Quoted from jackd104:

I’ve hired four property managers and none have ever asked for first months rent.

That is only if the house is vacant. If you find the tenant yourself then you do not have to pay the first month rent.

#22 3 months ago
Quoted from JohnnyPinball007:

That is only if the house is vacant. If you find the tenant yourself then you do not have to pay the first month rent.

depends on the area. here in Chattanooga TN none of the 5 companies do that... just charged 6-10% of rents collected~

#23 3 months ago

You never mentioned your moving plans. Are you buying or renting somewhere else?

Quoted from mcluvin:

I don't want to deal with daily BS from renters.

You absolutely need a management company. There are probably dozens in the area you can choose from. Just like a realtor, do your homework before picking one. If it's furnished, find a corporate housing broker, if they still exist.

You may have some success AirBnB, but there may not be a market in your area if there aren't any comps in your town. A house not on the beach or close to a park isn't going to be a big draw for short term rentals considering how many units there are in the state. Also look at the occupancy of the houses in the next town. If they aren't booked 3 out of 4 weeks, you wont make any money on the rentals. I think AirBnB charges 3%, but you will still need a management company to clean, maintain the house, and take care of emergencies.

We have a vacation home 90 miles away and I would have sold it or taken it off the market if I didn't have a management company to deal with stupid renters. And don't plan on ever wanting your furnishings back after it's rented a while.

Too many questions on the capital gains point to make suggestions - like what's your age, marital status, estimated appreciation, next purchase time frame etc. It's unlikely you have 500K in appreciation, so it may not be a big issue anyway. At least not for 3 years . Do your research somewhere that's not a pinball site.

#24 3 months ago
Quoted from Whysnow:

one important thing to consider is how long you plan to rent it.
Capital gains tax free applies to primary residence that you live in for 24 out of the last 60 months you own it (does not need to be consecutive months).
This can be huge.
You could rent for 3 years and then sell and still get those capital gains tax free.
Biggest thing for me is that I would not want to rent a place so far away. Ease of managing is very important to me personally. Headaches will happen but mitigating them is what I care about.
This question is a pretty simple math problem.
Happy to assist with full details if you want to put out hard numbers.
I personally would take the tax free capital gains and buy multiple rentals if the landlord path is the one you want to jump in on.
Leverage that $$$$ to make more for you.

Listen to this guy. Sell it and take the cash to use for down payment money on a small apartment building or multiple homes. You'll make a lot more in the long run.

#25 3 months ago
Quoted from alleycat-pinball:

Listen to this guy. Sell it and take the cash to use for down payment money on a small apartment building or multiple homes. You'll make a lot more in the long run.

I’d advise against this unless you’re doing a 1031 or capital gains will kill you.

Personally, I have no interest in owning a property outright. I own a few multi families in greater Boston and Boston proper. BRRRR method here, averaging an $800k-$1.2m property every two years. Leverage the equity, let renters pay down the mortgage, rinse, repeat, retire early.

If you do indeed plan to keep it and rent it out, research a good management company and pay for the peace of mind.

#26 3 months ago
Quoted from jake35:

We have a 7 BR beach house on airbnb in Destin that does well, my wife self manages remotely here in TN. We also have a local one as well that my wife handles. I think you'd probably do well with it but would need a reliable cleaning agency (that's big). The renter pays the cleaning fee on top of the nightly fee. You could search airbnb for similar size houses in the area to see what it would bring. I would do that before I would do a long term tenant in the area you describe would be much more profitable.

STRs require A Lot more management than LTRs. You basically become a small hotel operator. Something to consider if you value your time.

This is why property management fees for LTRs are 6%-8% and for STRs 30%.

#27 3 months ago
Quoted from mcluvin:

Thanks for the feedback folks! Sounds like a management company is the best way to go for me. Zillow suggests I can get ~$2K monthly as a long term rental. With Airbnb I can't find any comps in my city (might be a good thing), but the next town over I'm seeing ~$150 per day/$1K per week / $4K per month.
For those of you using a management company and Airbnb, what is each's cut of the rent?

Keep in mind STRs are also a seasonal thing. You won't get 100% occupancy year-round. You may only get 25%-50%. Then you're worse off vs LTR, not to mention a much bigger chunk going to the property manager.

I'm not against them. It just really depends on the area and the property. Some owners are able to do very well.

#28 3 months ago
Quoted from the9gman:

The last place I would invest right now is stock market, it has been overly inflated for the past few years (artificially pumped up) and the correction is definitely coming.

Based on your comments, now is the time to sell. Then wait for the correction to buy in.

#29 3 months ago
Quoted from mrmark0673:

I’d advise against this unless you’re doing a 1031 or capital gains will kill you

Like kind exchange is not needed when he is selling a property he has lived in. Cap gains are lifetime tax free (250k individual, 500k married couple).

He can sel his current home and pay zero tax. He can then take that money and do whatever he wishes.

#30 3 months ago
Quoted from Whysnow:

Like kind exchange is not needed when he is selling a property he has lived in. Cap gains are lifetime tax free (250k individual, 500k married couple).
He can sel his current home and pay zero tax. He can then take that money and do whatever he wishes.

Correct, I hadn’t thought that the property hadn’t appreciated past the $250/$500k threshold since purchase.

#31 3 months ago
Quoted from EEE:

If you truly don’t want the hassle of being a landlord, sell it and take the $500K capital gains tax exemption.

And you can always use that money to buy a rental, if renting is what you really want to do.

#32 3 months ago
Quoted from LukyDuck:

Based on your comments, now is the time to sell. Then wait for the correction to buy in.

that would be my take you look at how much money is being lost right now with the Airline, tourist , cruise , restaurant ,hell even pinball shops are closing the market is an overinflated bubble that is about to collapse. The only stocks I would even think about venturing in on right now would be amazon, Wallmart, Sams, Home Depot, Lowes because they are making out due to the pandemic...but even they are going to take a hit when it bursts. One bad Hurricane or natural disaster and the floor will drop just like the ride at the amusement park. I'm out till they come up with a treatment or a cure for this thing and then after that it will come back up but I would venture to say that the growth will be at a snails pace.

Just my take because right now I can't put 2 + 2 together and make 4 my valuation of where we should be is 16 to 18 and we are at 26,5XX just doesn't add up

#33 3 months ago
Quoted from the9gman:

that would be my take you look at how much money is being lost right now with the Airline, tourist , cruise , restaurant ,hell even pinball shops are closing the market is an overinflated bubble that is about to collapse. The only stocks I would even think about venturing in on right now would be amazon, Wallmart, Sams, Home Depot, Lowes because they are making out due to the pandemic...but even they are going to take a hit when it bursts. One bad Hurricane or natural disaster and the floor will drop just like the ride at the amusement park. I'm out till they come up with a treatment or a cure for this thing and then after that it will come back up but I would venture to say that the growth will be at a snails pace.
Just my take because right now I can't put 2 + 2 together and make 4 my valuation of where we should be is 16 to 18 and we are at 26,5XX just doesn't add up

I here you and raise you some imaginary amount.

#34 3 months ago

Whatever you do, please spend a little time going through this site.

http://www.airbnbhell.com/tag/airbnb-nightmare/

#35 3 months ago

Thanks for all the great advice! I know this is a pinball forum, but you gotta make a little ching to afford pinball machines. I appreciate all the diverse opinions. There is something to be gleaned from most all of them. I know there are plenty of smart folks on this forum.

The house has appreciated ~100% from when I bought it 20 years ago. So roughly $140K in capital gains if I sell before the shi* hits the fan in real estate. I'm moving to Atlanta. I need to be near a MARTA station. I don't really expect to move back to Florida so does that capital serve me better in Florida or Atlanta? It probably serves me better in Atlanta. I'm paying a little over a grand a month for a safe/near MARTA garage apartment in Decatur soon. If you check Atlanta area Airbnb monthly rentals, it's slim pickens anywhere $1K or below for anything close to an apartment, especially near a MARTA station. This well reviewed $1K garage apartment stays booked. It doesn't even have a real kitchen.

I think I need to find a property/properties that will allow me to offer something like that.

Promoted items from the Pinside Marketplace
$ 7,599.00
Pinball Machine
The Pinball Place
$ 689.00
Flipper Parts
Mircoplayfields
$ 9.99
Eproms
Matt's Basement Arcade
$ 89.99
Lighting - Led
Lighted Pinball Mods
$ 69.95
Playfield - Toys/Add-ons
Hookedonpinball.com
$ 7,500.00
$ 5,999.00
Pinball Machine
Classic Game Rooms
$ 48.00
Cabinet - Other
ModFather Pinball Mods
$ 89.00
Cabinet Parts
Pappy's Pinball Palace
$ 68.00
Playfield - Toys/Add-ons
API Houdini Out of stock
The MOD Couple
$ 2.50
Playfield - Decals
Doc's Pinball Shop
$ 9.00
$ 42.00
Playfield - Toys/Add-ons
The MOD Couple
From: $ 175.00
Playfield - Toys/Add-ons
Pinball Mod Co.
$ 22.50
$ 12.95
Playfield - Toys/Add-ons
COINTAKER.COM
$ 26.99
Lighting - Interactive
Lee's Parts
$ 18.00
Playfield - Toys/Add-ons
The MOD Couple
$ 99.99
Lighting - Other
Lighted Pinball Mods
$ 239.99
Lighting - Led
PinballBulbs
$ 79.99
Cabinet - Armor And Blades
PinGraffix Pinside Shop
$ 24.99
Lighting - Led
Lee's Parts
$ 37.00
Cabinet - Other
Cento Creations
From: $ 19.99
Eproms
Matt's Basement Arcade
$ 48.00
Cabinet - Other
ModFather Pinball Mods
From: $ 9.99
Eproms
Matt's Basement Arcade
$ 299.00
$ 6.00
Rubber/Silicone
Ramp-O-Matic
$ 22.00
Hardware
The MOD Couple

Hey there! Got a moment?

Great to see you're enjoying Pinside! Did you know Pinside is able to run thanks to donations from our visitors? Please donate to Pinside, support the site and get anext to your username to show for it! Donate to Pinside