Episode Transcript
[00:00:02] This is Short Term Rental Management, the show that is all about short term rental property management with your host, yours truly, Luke Carl.
[00:00:16] All right, Short Term Rental Management, here we are.
[00:00:20] We're here to talk about rental real estate, overnight rental, single family homes. It's extremely niched down.
[00:00:29] Matter of fact, to a certain extent. I hate to tell you, you're probably a dork if you're listening to this, but that's okay. I love you.
[00:00:35] I love you. I do. I don't think I'm a dork. I think I'm pretty cool, man.
[00:00:40] But this is a dorky subject that I am very passionate about.
[00:00:46] And today we're going to talk about purchasing homes as a landlord and what you're looking for.
[00:00:53] And this was brought to my attention, just full disclosure, brought to my attention by a client of the short term shop that actually I don't even know that if that's a fact. So I take that back. It was somebody on Facebook. Yep.
[00:01:07] And they said that they had a grinder pump at their property, which. Okay, I've got some grinder pumps. It's not very. It's not uncommon.
[00:01:19] And they were saying that the guests had clogged the grinder pump with a wipe. Basically, they wanted to file an air claim to the guest.
[00:01:29] Air cover on the guest for clogging up their grinder pump. So that's not my style. I'm not gonna do that. I'm gonna build a system around this grinder pump because I have some and I know that they can be trouble with these wipes. And it's very difficult to control renters with the wipes and the grinder pump. Although it's very, you know, it's pretty common in the area where I live. Although she said hers was a little more complicated. She said that the county utilities did not. Were not involved. Like it was her grinder pump and it was on her to deal with this.
[00:02:02] So that I'm not as familiar with.
[00:02:08] But here's the deal. You can't prove who put that wipe in there that clogged it up. Right.
[00:02:12] So, I mean, this is one of those things where it's just in my opinion, a waste of time. You can try and send them, you know, Bill, but it's just going to make them mad. And really you should just move on and know that you bought a house with a grinder pump. And.
[00:02:25] And that's what I wanted to talk about today is like, are there things in houses that we should look for to maybe not buy? And a grinder Pump is not one of them. I would certainly buy a house. I, I'm sitting in a house right now that has a grinder pump and it's on the beautiful 30A beaches of Florida.
[00:02:45] I've got two or three rentals that have grinder pumps and it's just part of it. But they are a public utility and if something happens, they do the, the utility company does come and fix it in most cases.
[00:02:58] Now they, they will give you a bill if something gets really weird and they find that it was your fault. But most of the time they just come and clean it out and you're good to go.
[00:03:10] So, I mean, there's a couple things here and I do want to talk about. I'm going to get to the point with the things maybe, you know, to look out for when buying a house. Things are maybe annoying as a landlord, but I also want to bring up another subject which is completely out of left field and then I'll bring it back around. Okay. If you listen to my podcast, you know, we do this kind of thing every now and then and I have a guest right now that's complaining that the floors were dirty and that their children had black on the bottom of their socks and this, that and the other. Meanwhile, we did have date stamped, time stamped, photos of the floor being mopped like an hour before they checked in.
[00:03:50] And so in this case, you can tell them they're wrong and throw a fit or you can move on.
[00:03:58] And believe me, I'm a guy that has told people they're wrong and thrown a fit for decades.
[00:04:08] I have thrown child level fits for most of my adult life. I'm not doing that anymore. I'm now older, I'm more mature, I'm getting closer to 50. And I've read a lot of books and a lot of therapy and I don't need to do that anymore.
[00:04:24] But here's the deal. The sock guest, I, she wants her cleaning feedback and she did again, God bless her. I mean, maybe it's real. I doubt it. Because again, we, we, we're not going to not mop the floors of the rental. You know what I mean?
[00:04:39] Plus, we have photos of it being done and the whole thing and she wants her cleaning feedback and we're going to give it to her.
[00:04:48] This is exactly like if you're working at a restaurant, you're waiting tables at a restaurant. Let's say you're at a fancy restaurant waiting tables and the person sitting at your table decides to send their meal back.
[00:05:05] They're, they're meal sender backers.
[00:05:09] There's a certain place in hell for these kind of people. Now I will say I get it. There are occasions, maybe a food allergy or something.
[00:05:16] I'm dairy free, so I get it. Sometimes you have to send the food back.
[00:05:21] Those of you that are like, oh, Luke, what are you talking about? I do that.
[00:05:26] They're not necessarily the problem. Although as a guy that worked in a bar for a very long time, owned a bar, don't send your food back.
[00:05:35] Just don't do it.
[00:05:37] Don't do it. Don't be that person.
[00:05:39] But I'm going to take it a step further.
[00:05:42] It's the people that eat 3/4 of the meal and then send it back.
[00:05:49] What are you gonna do?
[00:05:51] Be honest with you. There's really nothing you can do.
[00:05:54] You bring them a new plate and it costs you money. And it's the same thing with these black socks. Just give her money back and move on.
[00:06:05] Life is too short for this bs.
[00:06:09] The real estate market is always changing.
[00:06:12] Covid is long gone. Prices are down and properties are sitting on the market.
[00:06:18] The short term shop sells houses in all of the best vacation markets. And we'd love to help you purchase your next vacation home.
[00:06:27] Join us at theshortermshop.com theshortermshop.com let's find you a deal.
[00:06:37] Okay, so let's get back to the actual topic today, which is things to look out for when buying a rental property. Specifically short term rentals.
[00:06:49] Okay, got a little list for you here. Grinder pump number one.
[00:06:54] Because you know, in, in this person, whoever this person was that posted this, this, this post, I guess I am to assume they don't. They maybe don't know what a grinder pump. They didn't know what it was or they thought it was common. This is something you should look into, you know, Do you want to deal with it? Because now that this privately owned grinder pump situation here, I would assume that this is going into a septic system and maybe it's a situation where the septic system is down, uphill or something like that and it needs to be pumped. I don't know the details of this, but this is certainly one you're going to want to look into before you close the house. Is this something that's going to cause problems? Is this something that I can build a system for? Is this. Am I going to be able to find somebody who can come over here on a regular basis and fix it? Because you can't just let it Sit there and be clogged, bad things will happen. It will flood up into the house with nasty, nasty.
[00:08:02] So again, I do have a few homes that have grinder pumps, a couple of which are rentals.
[00:08:11] And I will also say it is very rare for something to go wrong. Now, we do make sure we tell people, you know, no wipes, that kind of thing, but they're gonna do it anyway. And it's still pretty rare, knock on wood, that something happens to one of those things and when it does, in my case, we just call the utility company and they come and fix it, usually for free.
[00:08:32] Now, hurt this person's situation, I think it was a she, a little different. She owns the grinder pump, she's on the hook for getting it fixed, on the hook for replacing it, etc. Which they're not that expensive.
[00:08:47] So it's something to look into. We call this due diligence.
[00:08:51] And I'm just doing my best now to raise this to the attention of anybody in the future that may be buying a rental that's never heard of a grinder pump. Please look into it and decide if it's something you want to deal with. Myself, the short term shop, and anybody else out there. Nobody's going to tell you you should or should not buy this house. It's for you to decide.
[00:09:16] Your real estate agent's not going to get involved.
[00:09:20] You know what I mean? It's not their job to tell you if it's the right house or not.
[00:09:26] It's just not only you can decide and if you find some real estate agent that's willing to say, here, you should buy this house, it'll make this much money run.
[00:09:40] All right, so grinder pumps, also low yield wells that may or may not have storage containers, water storage, they're very common in the mountains.
[00:09:55] Lots of people have them. People buy them every single day. But what I'm telling you right now is please understand what you're getting yourself into.
[00:10:04] Best case scenario, you're literally going to have hundreds of gallons of water in a room somewhere and things can go wrong.
[00:10:15] Worst case scenario, you're gonna have to frack and hopefully drill that well deeper to get more water, A deep, a better well situation, deeper in the ground.
[00:10:26] And this is going to cost money and it may or may not work.
[00:10:30] It's called fracking, right? Like, just like the oil situation, but it's really not that big a deal. Basically, when you drill a well, they go down deep enough to get what they think is a decent water, a decent you know, specimen of water and then they'll stop and then things change. More drills are drilled in your. More wells are drilled in your area. The wells aquifer there. You know, that stuff changes and then maybe we need to go deeper and maybe they could have gone, should have gone deeper when they did it the first time, but they, how are they to know that there'd be 20 new wells in that area in 15 years, you know, that kind of a thing. So again, some of these things you can't account for. Some of these things are nobody's fault.
[00:11:09] But if you're going to buy a house in an area with a well, make sure you're testing for gallons per minute, quality of the water, etc. And really, in my opinion, as a guy, that's not a professional. I just buy and sell houses. I am not a real estate agent. I'm not a home inspector.
[00:11:27] The question you're asking yourself is, do I want to deal with this thing on a regular basis?
[00:11:38] And only you can decide whether that answer is yes or no.
[00:11:45] Is it a smoking deal? Well, if it is, maybe you're willing to deal with some well issue, you know, like a, a water tank under the house, storage tank.
[00:12:00] Maybe nobody wants the thing and it's sitting there in a smoking deal because it doesn't have much water and you can take, take it in under your wings and drill it deeper and get some better water. We see that happen. Now. It's a bit of a risk if you buy it first. You know what I mean? It's a risk if you don't buy it first because then you just drill the better well for your, for the other guy. That's not gonna happen. But you know what I mean, you can't really do it before you buy the house because then what if the seller says, I don't want to sell it? You have to have some pretty stiff contracts in place, all that sort of stuff. Again, I'm not a lawyer.
[00:12:32] Glass showers. I'm not a fan of glass showers.
[00:12:36] They break, they're dangerous.
[00:12:42] You can cut yourself on one of those things, slam the door, broken glass, blood, busted foot. You know what I mean? It's. I don't like them.
[00:12:50] Have I purchased homes with glass showers? Don't be ridiculous. Of course I have.
[00:12:57] I got a glass shower, a couple of doors that way in this house on beautiful 38.
[00:13:03] I have them.
[00:13:07] I prefer not to have them. They do, in my opinion, make my life a bigger pain in the rear end their liability.
[00:13:13] But it's not Enough to really worry about, especially if they're new and beautiful.
[00:13:19] They're not. They're definitely much nicer looking than a curtain.
[00:13:25] But it's something to consider.
[00:13:28] Soaker tubs. Does the house have soaker tubs? How old are they? Are they ugly? Do they have jets? Because those jets get full of mold and shoot junk all over everything. We've talked about this a hundred times here at the short term shop, but I'm just bringing it back up because I care about you. And if you're going to buy a house because things are starting to heat up, deals are starting to come around, contracts are starting to happen.
[00:13:51] Obviously, right when the recording of this audio, the gasoline prices in Iran and all this, it's a, it's a mess. You know, I don't want to get into politics, but.
[00:14:04] Deals are starting to wiggle a little bit and you might get out there and find yourself in a situation with some soaker tubs and then you don't realize this is what I want to avoid. I don't want you to get by a house that's got five soaker tubs and not realize that not only are you not going to have enough hot water to fill those tubs and number two, they're going to shoot mold all over the place because there's always mold in those lines. And you can't blame your cleaner for that.
[00:14:35] You want to know another one for me? I don't like to buy houses that have been added onto or converted garages. It's just me. I don't like. I want the house that was purpose built the way it is. There's obviously lots of exceptions to that rule. And some folks really, really, really like that.
[00:14:54] Some folks like that, they can add a room on. Some folks like that, they can turn a garage into a room or a game room, put H Vac in there and all that.
[00:15:05] I'm really more speaking about long term rentals. Like if it's a long term, you know, three bedroom, two bath in a good school district, brick ranch, 70s brick ranch. And it's got a garage and somebody turned it into a second living space or a bedroom. I don't, I'm out, I'm out on that. I'm not buying that.
[00:15:22] It's not my style.
[00:15:25] That was not livable space when it was built. Somebody turned it into living livable space. And to me, that section of that house is not the same amount of market value as the real.
[00:15:39] I'm going to use the word real house because that's not real in my brain.
[00:15:45] Some people do not care. Some people actually like it.
[00:15:48] But for me, I am not going to buy a converted garage. I'm not going to do it. I'm not going to buy a house with an addition. Most of the time you see these addition, they were done by somebody that lived there, like a homeowner or a home depot special.
[00:16:01] It's not for me.
[00:16:04] So that's my buy box. No converted garages, you know what I mean? But some people, that is their buy box. Oh, I love a converted garage. Means they maximize this, the square footage and blah, blah, blah, blah, blah, blah, blah, blah.
[00:16:14] This is the deal I'm looking for.
[00:16:21] So that's all I had for you today. I had five, five things to look out for when purchasing a short term rental. That's a pretty good title for today's show, right?
[00:16:33] I'm going to give you a book. I've actually read several good books. I'm actually just going to give you one though, because I am going to do a Luke's book club update here on the. On the program here in the near future, so be on the lookout for that. But I am reading a book right now that was recommended to me by my good buddy Bill gym, which is called turning pro. And it is spectacular. It's very short, by the way. Very, very short. You finish it today.
[00:17:01] Spectacular.
[00:17:06] All right. Also going to give you a quote.
[00:17:10] Been burning through books lately and writing down some great quotes. So let's see what I got here. I've got a quote for you.
[00:17:23] If you want to get the rabbit out of the log, you gotta make a commotion like a dog.
[00:17:33] Which is most certainly not from a book. That is from Waylon Jennings, a tune called Waymore's blues.
[00:17:43] If you want to get the rabbit out the L. G, you got to make a commotion like a dog. I love that.
[00:17:54] Kick and scream, get what you want. Although if you remember the beginning of the program, I'm not. I'm a little older now. I don't have to do that anymore. Right.
[00:18:02] All right. Short term rental management. I love you.
