HABU SFR rental

[Terrel L. Shields]

Well, do people buy these homes to rent? Or to use? And where does renting part time come in as it is often done to defray the expense of owning such a home.

 

[J Grant]

The fact that 'they' want a rental analysis does not prove that the HABU is weekly vacation rentals. Do the work. Analyze the subject in the contexts of the four steps and then draw your conclusion. 'Weekly vacation rental' would only be the HABU if that use produced the highest value. To know that, you have to analyze the market data. Do dwellings that are used as vactation rentals sell for more, less, or the same as those who are used as second homes or primary residences?

While the HBU for greatest value is STR, an appraisal based on that turns it from residential and into hotel/commercial use and thus makes the property ineligible for a residential loan.

The fact that owners can rent it the short term is baked into the prices - but the lender wants to force the issue, so their request to use STR is a no-go for a res lending purpose. for GSE's

 

[John Hassler]

Your client has asked you for a specific product, the value if rented monthly. They did not ask you to consider all of the potential rental uses. Your market analysis will have a discussion of how most owners are renting Thier properties which will set up your rent analysis comments on the lack of monthly rental data. Cool assignment, enjoy.

 

[Fernando]

Don't mean to digress but I was thinking about my rental properties last week.
I bought them during the Great Recession. Since then prices have more than doubled (can't say that for commercial) but my rents have not doubled. Not even close.
I can't imagine buying a rental property now since the profit/rate of return is not as good as 10 years ago.
Relatively speaking, tenants are paying less than home buyers now.

 

[mp2277]

While the HBU for greatest value is STR, an appraisal based on that turns it from residential and into hotel/commercial use and thus makes the property ineligible for a residential loan.

The fact that owners can rent it the short term is baked into the prices - but the lender wants to force the issue, so their request to use STR is a no-go for a res lending purpose. for GSE's

Air BnB's do not make a SFR home a commercial property and ineligible for a residential loan. Fannie even has a program for short term SFR loans.

 

[J Grant]

Air BnB's do not make a SFR home a commercial property and ineligible for a residential loan. Fannie even has a program for short term SFR loans.

Fannie allows the income from STR to qualify a BORROWER.

The property is a different issue - read the Fannie selling guide why they want rentals based on monthly leases (or annual ). They use of STR to qualify a property turns the property into a hotel type use. If one says, as some here suggest, that the HBU is a STR that is no longer a residential use .

 

[Terrel L. Shields]

Air BnB's do not make a SFR home a commercial property and ineligible for a residential loan. Fannie even has a program for short term SFR loans.

But they don't allow you to use the STR income to estimate the market value.

Airbnb's and VRBOs are often not all that profitable. If too many such rentals are available, say, around a lake, then some will outdraw others depending upon price and amenities. That is especially true of ordinary garden variety houses. They have to compete with motel rooms on price. The very high end and unique properties have the issue of a limited pool of users although they get a very high fee per night.

 

[mp2277]

Fannie allows the income from STR to qualify a BORROWER.

The property is a different issue - read the Fannie selling guide why they want rentals based on monthly leases (or annual ). They use of STR to qualify a property turns the property into a hotel type use. If one says, as some here suggest, that the HBU is a STR that is no longer a residential use .

The even have a ST rental form now that can be used instead of form 1007

 

[TerryRohrer]

The even have a ST rental form now that can be used instead of form 1007

I believe that is an AMC form, not a GSE form. Not a chance I would gamble my license on it.

 

[Terrel L. Shields]

If you are not allocating values to the BEV and the personal property of a STR, then you are doing a bad job of valuing the property. And who can trust the P & L of a B & B operation?