Mid-Upper level Gated community home - instead of selling/leasing - thinking of renting it out as a short term vacation rental

I

IrvineHousingBlogFan_IHB

New member
We're moving to another home in a few months and thinking of having our home be a vacation rental home for families who want to visit S. Cal.



Everything lines up for us (finances, resources, experience, HOA/CCR).



Only hang up is our neighbors. We have a good relationship with them and we're concerned that they might not like having multiple guests be in our home throughout the month

in their gated community/neighborhood.



We were thinking we wouldn't be too happy if our neighbors did the same thing.



But at the same time, most of our guests would be families and gone most of the day at disneyland/universal studios/beach/etc

and the home would be vacant at least 40% of the time.



We talked to our management company and HOA/CCR have no limits on how we use/rent our property.



Are we being too sensitive or is this a big enough issue where it should be a deal breaker for us.



If we rent the home - we expect $2500 -$2700 per month. (Fullerton/4br/1800 sq ft/2.5 bath/built 1999/gated community with pool/spa)

If we did vacation rental - we expect $1500-$4500 per month depending on the season.



Would giving a x-mas gift cards to our immediate neighbors ($200) help?



Your thoughts are appreciated ahead of time.



Thanks!



J
 
[quote author="IrvineHousingBlogFan" date=1241177965]We're moving to another home in a few months and thinking of having our home be a vacation rental home for families who want to visit S. Cal.



Everything lines up for us (finances, resources, experience, HOA/CCR).



Only hang up is our neighbors. We have a good relationship with them and we're concerned that they might not like having multiple guests be in our home throughout the month

in their gated community/neighborhood.



We were thinking we wouldn't be too happy if our neighbors did the same thing.



But at the same time, most of our guests would be families and gone most of the day at disneyland/universal studios/beach/etc

and the home would be vacant at least 40% of the time.



We talked to our management company and HOA/CCR have no limits on how we use/rent our property.



Are we being too sensitive or is this a big enough issue where it should be a deal breaker for us.



If we rent the home - we expect $2500 -$2700 per month. (Fullerton/4br/1800 sq ft/2.5 bath/built 1999/gated community with pool/spa)

If we did vacation rental - we expect $1500-$4500 per month depending on the season.



Would giving a x-mas gift cards to our immediate neighbors ($200) help?



Your thoughts are appreciated ahead of time.



Thanks!



J</blockquote>


Sell it or rent it, but don't even think about "vacation renting".

Cleaning, advertising, time constraints, headaches, key echange/security, scheduling, etc. will never make it worth it.



And if you <strong>really </strong>appreciate my thoughts, you are welcome to send me the gift card...

Good luck,

-IR2
 
Isn't fullerton too far out to be a vacation rental hotspot?

When I think vacation rental I think Newport Beach or Laguna Beach.
 
I know it sounds a bit unrealistic but we're going to try it for a year and see how it fares. We're cautiously optimistic.



Any thoughts on how you'd feel if you were my neighbor?
 
[quote author="IrvineHousingBlogFan" date=1241232992]Any thoughts</blockquote>


<img src="http://fast1.onesite.com/fans.wwe.com/user/bathtubgin/house-moron.jpg" alt="" />



IR2 tried being nice. I'm being direct. What you are planning on doing isn't going to work. Sell the damn house.
 
IHBfan - Well, welcome to the site. I'd have to agree with the above comments but to answer your second question... if I was your neighbor how would I feel... I probably wouldn't be all too pleased. It sounds like you're in an HOA and with random strangers coming and going throughout your home, you will undoubtedly have people who don't know (or don't care to know) the CC&R's. Whether it's a party at your house and they're getting rowdy or parking in the wrong spots, or what have you - I think your neighbors might notice some disturbance at some point. In which case, what would you do about it - will you be around to address any issues? Well since your house is up for short-term rental, I suppose you could offer your neighbors complimentary use of the house for their out-of-town relatives to stay in for a few days each to appease them and see how that flies.
 
In the 1990's, I owned a condo in a beach-front complex where this specific issue became really huge. Lawsuit huge. Neighbors threatening violence huge. You said the community is gated. How will your short-term renters gain access the first day? How will they return keys? Who will deal with lock-outs? Don't expect the neighbors to be happy if you pass out the gate code to anybody that wants it. If your community has a gate guard, don't expect the neighbors to be happy if you expect the guard to spend time to be your key keeper and guest monitor. Also, check into local laws. There are minimum stay requirements that, if you violate them, make your place a hotel rather than a rental apartment. Believe me, this is a really, REALLY bad idea.
 
I'll go back to nice...



Have you figured out how a vacation rental will make as much as a regular rental?



Seems like all the things IR2 listed would make it difficult, unless you have some "in" on a constant pool of families who would love to spend their vacation in Fullerton.



As for your neighbors... either rental option has its pros and cons... in a regular rental, they could be stuck for a year if you rent out to the family from hell... in a vacation rental... they may not even see your "guests".
 
no_vaseline: You might be right (not the moron part but our plan not working) but we have 3 years experience in this field and have had excellent results but you still might be right that it won't work. But our risk is minimal as we could always rent it out after trying it out for a year. Didn't appreciate your attempt at humor at my expense though.



Socal78: I agree with much of what you wrote - hence our apprehension at this endeavor. We would live less than 10 minutes away so we would be able to easily come by if any issues developed but it might be a headache. Good idea about letting our neighbors use the home to relatives/etc.



GoIllini: Your story sounds like a worst case scenario for us. It must have been horrible for you and your family. All the other issues you pointed out (gate/code/guards/local laws) have been researched and settled.



irvine_home_owner: Thanks for being nice! The finances work out very well. Worst case scenario (financially) we lose $300 per month and after a year rent it out long term. Best case scenario, we earn $1000-$3000 per month over all our expenses. In terms of long term renters vs short term renters: in practice, short term renters would be less of an annoyance but the con is the number of different families coming in and out of the house.



Thanks!
 
[quote author="IrvineHousingBlogFan" date=1241236992]no_vaseline: You might be right (not the moron part but our plan not working) but we have 3 years experience in this field and have had excellent results but you still might be right that it won't work. But our risk is minimal as we could always rent it out after trying it out for a year. Didn't appreciate your attempt at humor at my expense though.</blockquote>


I wasn't being funny.



If you were playing russian roulette I'd say the same thing - you are 100% certain going to shoot yourself in the face if you play for very long. This is no different.



Just don't say nobody warned you.
 
Sounds like your mind is made up. I hope it works out for you.



As for how the neighbors will feel... I'm guessing they won't like it at all. Would a gift card or use of the home for their family or friends soften the blow? Maybe, but I bet they still won't be thrilled.



We spent some time talking with the neighbors when we rented a house in Tahoe for a couple of weeks not too long ago. They hated having a short term rental next door and had some real horror stories to tell. In fact they were seriously considering putting their dream house on the market and moving to an area with a more restrictive HOA, largely beause of the rental.



Maybe Tahoe attracts more partiers than you would though. ;)



Good Luck
 
[quote author="no_vaseline" date=1241239375][quote author="IrvineHousingBlogFan" date=1241236992]no_vaseline: You might be right (not the moron part but our plan not working) but we have 3 years experience in this field and have had excellent results but you still might be right that it won't work. But our risk is minimal as we could always rent it out after trying it out for a year. Didn't appreciate your attempt at humor at my expense though.</blockquote>


I wasn't being funny.



If you were playing russian roulette I'd say the same thing - you are 100% certain going to shoot yourself in the face if you play for very long. This is no different.



Just don't say nobody warned you.</blockquote>


When someone says that they know 100% for sure what will happen is 100% full of it. You need to definitely for sake of all mankind, put your Jr. High School mentality behind you with your warnings of "I told you so" and your "man-crush" love with a fictional TV character. Who is the "Moros" here?
 
[quote author="IrvineHousingBlogFan" date=1241240207][quote author="no_vaseline" date=1241239375][quote author="IrvineHousingBlogFan" date=1241236992]no_vaseline: You might be right (not the moron part but our plan not working) but we have 3 years experience in this field and have had excellent results but you still might be right that it won't work. But our risk is minimal as we could always rent it out after trying it out for a year. Didn't appreciate your attempt at humor at my expense though.</blockquote>


I wasn't being funny.



If you were playing russian roulette I'd say the same thing - you are 100% certain going to shoot yourself in the face if you play for very long. This is no different.



Just don't say nobody warned you.</blockquote>


When someone says that they know 100% for sure what will happen is 100% full of it. You need to definitely for sake of all mankind, put your Jr. High School mentality behind you with your warnings of "I told you so" and your "man-crush" love with a fictional TV character. Who is the "Moros" here?</blockquote>


What is your plan for removing your tennant when they squat and stay 31 days on a thirty day lease?
 
You are absolutely right! What was I thinking! I'm sh!t out of luck and hosed for life. I'm such a Moron. Not only that, what will I do if they take all my sh!t and make my house a meth lab! Thank you for your help. Thank God I got your help.
 
[quote author="IrvineHousingBlogFan" date=1241236992]

Socal78: I agree with much of what you wrote - hence our apprehension at this endeavor. We would live less than 10 minutes away so we would be able to easily come by if any issues developed but it might be a headache. Good idea about letting our neighbors use the home to relatives/etc.

Thanks!</blockquote>


IHBfan: Do you mind my asking - what is the motivation behind this choice if you're only going to be living 10 minutes away? Is it because you seek a different kind of living arrangement now and you're going to Plan B for your house... or is the motivation just to generate income? Maybe if you could shed some light on why you are moving in the first place, we could get a better idea.
 
[quote author="IrvineHousingBlogFan" date=1241240689]You are absolutely right! What was I thinking! I'm sh!t out of luck and hosed for life. I'm such a Moron. Not only that, what will I do if they take all my sh!t and make my house a meth lab! Thank you for your help. Thank God I got your help.</blockquote>


You either have a plan or you don't, so this is where I call bullshit:



[quote author="IrvineHousingBlogFan" date=1241236992]no_vaseline: You might be right (not the moron part but our plan not working) but we have 3 years experience in this field and have had excellent results but you still might be right that it won't work. </blockquote>


Three years experence doing vacation rentals in Fullerton? Seriously? I never knew there was a market.
 
[quote author="IrvineHousingBlogFan" date=1241236992]GoIllini: Your story sounds like a worst case scenario for us. It must have been horrible for you and your family. All the other issues you pointed out (gate/code/guards/local laws) have been researched and settled.



</blockquote>
Funny stories illustrating problems:

1) 9:00 AM on a Saturday morning, my front door opens and a Mom, Dad, Son and Daughter come walking in with suitcases. I was *ahem* NOT properly attired to meet guests, as the daughter was quick to notice. They had the wrong unit number and just walked in.



2) We had assigned parking spots, with all the proper notices that offenders would be towed. Short-term tenants seemed not to be able to read. My assigned spot happened to be closest to the offending unit, and was frequently occupied illegally. I got tired of trying to be neighborly and go ask them to move. Especially when the ungrateful SOBs would treat me like I was offending them rather than doing them a favor. Besides, the next "guest" would make the same mistake, so why should I make the effort to be accommodating? It was easier, and less confrontational, to use speed dial for the towing company.



Luckily, my living area was farther from the most aggregious 'hotel room' than was my parking spot. I didn't have the problem of the late-night parties on weekdays that others had. If people are on vacation, they are not going to be keeping reasonable hours, when compared to people that have to get up and go to work in the morning.
 
[quote author="no_vaseline" date=1241241050][quote author="IrvineHousingBlogFan" date=1241240689]You are absolutely right! What was I thinking! I'm sh!t out of luck and hosed for life. I'm such a Moron. Not only that, what will I do if they take all my sh!t and make my house a meth lab! Thank you for your help. Thank God I got your help.</blockquote>


You either have a plan or you don't, so this is where I call bullshit:



[quote author="IrvineHousingBlogFan" date=1241236992]no_vaseline: You might be right (not the moron part but our plan not working) but we have 3 years experience in this field and have had excellent results but you still might be right that it won't work. </blockquote>


Three years experence doing vacation rentals in Fullerton? Seriously? I never knew there was a market.</blockquote>


Hey, no_vas is truly back! Don't take it too seriously (the advice, yes, the tone, no), he prefers to say what everyone is thinking before they use their filters (the world actually needs a few no_vas's).
 
A vacation rental in Fullerton? Um...I guess it's sorta kinda vaguely close to Disneyland?



I agree with everybody else-this has FAIL written all over it. Sorry.
 
[quote author="IrvineHousingBlogFan" date=1241177965]

Your thoughts are appreciated ahead of time.



Thanks!



J</blockquote>


J,



Your concern is in all the wrong places.



First, who cares about the neighbors? You are moving out of the neighborhood, and you will never see them again. They are no longer going to be your neighbors, and they should be the least of your concerns.



Second, why are you considering renting it out? Is it because you think prices are temporarily depressed and the house is a good "investment?" You should sell the place while there is still some bubble equity available. Real estate is dead for at least a decade and probably longer. Your best financial decision is to sell now.



Third, if you are going to keep and rent it--which is not the best financial decision--you want to find a stable renter and keep them there forever. Vacancy and tenant damage are the mortal enemies of landlords. If you go the vacation rental route, you will maximize the problems you will have with vacancy and tenant damage. Some day, the property will be rented by a group of spring breakers who will have a rave, put out cigarettes on your furniture, spill bong water on your carpets, urinate on the walls and leave a mountain of trash strewn all over the yard and house. You will get a call from the police about the conduct of your "guests," and your management company asking $10,000 for cleanup and repairs.





I know you came here for advice on what to do about your neighbors, but that is not your problem. Unless you examine what your real problems are, the best advice you can get about the neighbors is to "let them eat cake."
 
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