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Finding Tenants? Is rental property a bad ROI?

bahamamama
March 27, 2016 04:35PM

Registered: 2 years ago
Posts: 8

Just a follow up to my previous post...looking for some pre-move information. We're hoping to move to USVI when I finish school (about 2 more yr) and are saving up $$ in the meantime. We'll be renters for awhile, with plans to purchase property once we're more settled.

We think we'd eventually like to purchase a home that has a small rental unit attached for a little additional income. We own rental property in the states, so we're pretty comfortable being landlords. We'd be open to having either long term tenants or short term/AirBNB type tenants (being an Air BNB host actually sounds like fun!)....I guess my question is: how hard is it to find quality long term tenants? The rental market where we are ebbs and flows. This time last year we had an awful time finding quality tenants, and this year we're being overwhelmed by the number of applications we've had!

Anyway, we'd like to do some pre-move visits. Right now, I'm leaning towards staying on STX to check out the housing market there, but I've been keeping an eye on rental units, and I see ads for the same rental units posted over and over again....it makes me wonder how long rental units on STX are vacant before finding tenants? What about STT? Does rental property have a bad return on investment in USVI?

I'd ove to hear anyones experience as a landlord or airbnb/vrbo host on STX or STT. TY! smiling



Edited 1 time(s). Last edit at 03/27/2016 05:15PM by bahamamama.

Re: Finding Tenants? Is rental property a bad ROI?

jj00802
March 27, 2016 11:53PM

Registered: 5 years ago
Posts: 72

As for STT, there are good tenants (those who pay promptly and keep the apartment clean), but I have had the disaster tenants as well (leaving a big mess and rent past due).

There are probably various good or bad reasons why apartments seem to be advertised frequently (seasonal tenants, etc.) I have had tenants move in and stay only a few months because they moved back to the states or moved to the other side of the island to be closer to their new job location.

Re: Finding Tenants? Is rental property a bad ROI?

OldTart
March 28, 2016 07:46AM

Registered: 6 years ago
Posts: 6,524

I've been a landlord both here and stateside and being a landlord here is a totally different ballgame for myriad reasons. This for you is a possibility SO far in the distant future.

Re: Finding Tenants? Is rental property a bad ROI?

vicanuck
March 28, 2016 08:16AM

Registered: 8 years ago
Posts: 2,263

The AirBNB market is growing fast in the Virgin Islands. We have our first AirBNB guests from Germany staying in our guest cottage right now for two weeks. They flew in on the Norwegian Air flight from Copenhagen. They are great people and we've enjoyed having them so far.

We have another 2BR 2BR unit downstairs that we're converting to AirBNB now that the long term tenant has moved out. We know several others who are converting long term rentals into short term rentals using AirBNB and other similar services..

Its way more lucrative than long term rentals. But, a good long term tenant may be better for some people. We've had long term tenants for over 10 years but we long longer need the guaranteed monthly check and prefer the flexibility of AirBNB and not having our units tied up if we don't want to.

Re: Finding Tenants? Is rental property a bad ROI?

Jimfusio
March 28, 2016 06:22PM

Registered: 2 years ago
Posts: 8

I'm curious about this too. I'm sure, like anywhere else, there's good and bad, but if anyone has any specific info or experiences to share, I'd like to hear them.

Re: Finding Tenants? Is rental property a bad ROI?

OldTart
March 28, 2016 06:34PM

Registered: 6 years ago
Posts: 6,524

I've no doubt that I'm no exception in having enough material to write a book on the ups and downs of being a landlord here but until you've lived here for a while and settled in - and have a better understanding of island life and the comings and goings, keep it on the back burner. As you settle in, and if and when being a landlord becomes more a reality, you can talk to past and present landlords in person and get their feedback.

Re: Finding Tenants? Is rental property a bad ROI?

Alana33
March 29, 2016 07:03AM

Registered: 6 years ago
Posts: 11,795

Have a good lease and take pictures because at some point or other, you'll probably end up in small claims court. I've had both good and bad tenants.
It's simply amazing what some will do to your property.

Re: Finding Tenants? Is rental property a bad ROI?

caribstx
March 29, 2016 08:21AM

Registered: 4 years ago
Posts: 434

All the more reason to go the short term rental route. If you don't like them...they will be gone in a few days. Problem solved. Next...

Re: Finding Tenants? Is rental property a bad ROI?

Alana33
March 29, 2016 08:39AM

Registered: 6 years ago
Posts: 11,795

That's true but there's a shortage of vacation rental guests during the summer months so if you're depending on the income, this may not work for everyone.

Re: Finding Tenants? Is rental property a bad ROI?

bahamamama
March 29, 2016 09:47AM

Registered: 2 years ago
Posts: 8

Quote
vicanuck
The AirBNB market is growing fast in the Virgin Islands. We have our first AirBNB guests from Germany staying in our guest cottage right now for two weeks. They flew in on the Norwegian Air flight from Copenhagen. They are great people and we've enjoyed having them so far.

We have another 2BR 2BR unit downstairs that we're converting to AirBNB now that the long term tenant has moved out. We know several others who are converting long term rentals into short term rentals using AirBNB and other similar services..

Its way more lucrative than long term rentals. But, a good long term tenant may be better for some people. We've had long term tenants for over 10 years but we long longer need the guaranteed monthly check and prefer the flexibility of AirBNB and not having our units tied up if we don't want to.

That's great! Best of luck to you! Being an AirBNB host seems kind of fun!

Re: Finding Tenants? Is rental property a bad ROI?

Jimfusio
March 31, 2016 05:16PM

Registered: 2 years ago
Posts: 8

Quote
Alana33
Have a good lease and take pictures because at some point or other, you'll probably end up in small claims court. I've had both good and bad tenants.
It's simply amazing what some will do to your property.

I think that's good general advice for any landlord really.

Re: Finding Tenants? Is rental property a bad ROI?

OldTart
March 31, 2016 06:14PM

Registered: 6 years ago
Posts: 6,524

Quote
Jimfusio

I think that's good general advice for any landlord really.

Absolutely - universal! I was a LL stateside too but there are certainly rather unique issues here. Anybody thinking of becoming a LL here (and especially someone with no prior experience) is well advised to do a ton of homework and invest in the services of a good real estate attorney to put together a lease.

Re: Finding Tenants? Is rental property a bad ROI?

Afriend
April 01, 2016 10:45AM

Registered: 11 years ago
Posts: 442

Before renting out your property you should watch at least a couple of weeks of Judge Judy - half the cases on the show deal with Landlord/Tenant disputes. The difficulties Landlords encounter is enough to make anyone think twice about renting.

Re: Finding Tenants? Is rental property a bad ROI?

caribstx
April 01, 2016 11:03AM

Registered: 4 years ago
Posts: 434

I've never had a problem with any of the long terms renters I've had either here or on the mainland. But I wouldn't take just anyone off the street either. Must be very picky to avoid problems...and have a great lease.

Re: Finding Tenants? Is rental property a bad ROI?
avatar

Dante
April 01, 2016 11:32AM

Registered: 12 years ago
Posts: 253

I have a rental on St. Croix . Demand always seems high. I have had good luck with tenants , even remained friends with previous tenants over the years .

It is very common here to have a rental attached to a single family home .

As mentioned by other posters a good application / screening process and a detailed lease is a must !

I also have had / have rental property stateside the two main differences I have noticed are :

Things cost more here , maintenance , rentals are expected to be furnished , so the ROI is not as high.

Tenants don't stay as long , all of mine so far have planned to make St. Croix their lifetime home and left island in a year ( or less ) .

Re: Finding Tenants? Is rental property a bad ROI?

OldTart
April 01, 2016 12:22PM

Registered: 6 years ago
Posts: 6,524

Quote
Dante
... Tenants don't stay as long , all of mine so far have planned to make St. Croix their lifetime home and left island in a year ( or less ) .

This is one of the unique problems I alluded to earlier. The very high attrition rate of newbies can leave you with a duly executed annual lease with the usual penalties for breaking it early but no hope of enforcing it if the tenant simply takes off and leaves island. One of the reasons it's really important (and this is the same AnyTown USA) to get first and last month's rent and one month's security deposit up front. At least then if you have a tenant who ups and runs you don't lose a bunch and hopefully can quickly re-rent!

Re: Finding Tenants? Is rental property a bad ROI?
avatar

Dante
April 01, 2016 01:50PM

Registered: 12 years ago
Posts: 253

Quote
OldTart

This is one of the unique problems I alluded to earlier. The very high attrition rate of newbies can leave you with a duly executed annual lease with the usual penalties for breaking it early but no hope of enforcing it if the tenant simply takes off and leaves island. One of the reasons it's really important (and this is the same AnyTown USA) to get first and last month's rent and one month's security deposit up front. At least then if you have a tenant who ups and runs you don't lose a bunch and hopefully can quickly re-rent!

Agreed

Re: Finding Tenants? Is rental property a bad ROI?

AandA2VI
April 03, 2016 01:45AM

Registered: 6 years ago
Posts: 2,182

And another reason to have $10K per couple saved. (not talking about buying of course) A $1500 place - times three (first last and security) is $4500 right off the bat. I've been pretty firm with landlords that I wont pay all three. I will pay first and security or first and last. Luckily none say no - but I do have great references.

I think finding GOOD tenants is just as hard as finding GOOD landlords. Landlords that don't lie about stuff and listen when maintenance needs to be done. Last place was a "dream" landlord said. In reality It was infested with mozzy's - never could find the source and the "private driveway" off our bedroom window..... a shortcut through the neighborhood starting at 5am... about two hours after I go to bed. Killer view though lol.

I also always start with a 6 month lease with option for 1 or 2 years. If they say no, I walk away. I know that I have more to offer a landlord than they have to offer me. When we move back to STT I will start looking to buy.

Re: Finding Tenants? Is rental property a bad ROI?

mtdoramike
April 03, 2016 12:04PM

Registered: 5 years ago
Posts: 923

Most of my wife's family the (in-laws) from sisters, brothers and cousin in laws rent out houses and apartments on the North side of St. Thomas in the Hull Bay area and they do not seem to have a problem renting out their places and holding onto good tenants. To me, or at least what I have observed is to try and treat the tenants as you would want to be treated if you were them, price your rental either right at market value or just below market value. Most do not require a lease, but they do require first last and security, but are willing to work with the tenant on the security if they don't have the money up front.

Now as far as renting an apartment versus buying, If you go into renting with an open mind and not expect the same thing on the Island that you would get in the states for the same amount of money, you will be fine. Some folks go to the Islands looking for that standard 3 bedroom and two bath with that grand master suite, but unfortunately that aint Island living. The less footprint of a home the better is how the older generation on the Island lived, which is small bedrooms, small kitchens and small bathrooms. It cost soooo much to build in the Islands that unless you are independently wealthy, it costs quite a bit of money to build those grand homes.


mike

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