How do I judge whether a lake town's rules will still be the rules?

Let's put the $48k somewhere it can be checked. $48,000 gross at, say, 55% occupancy across 365 nights is 201 nights, which means an average nightly rate of about $239 including the cleaning fee guests pay. Strip the cleaning out and you're maybe $175 to $190 a night on a two bed condo with a seven night minimum. Does that match what you can actually see booked in that complex right now for July and for February? Pull up the calendar on four units and count blocked nights. Blocked isn't the same as booked, owners block for themselves, so it's a ceiling not a floor.

Then the stack under it: HOA $5,040, payment $21,000, cleaning at maybe 30 turns times $140 is $4,200, supplies and consumables $1,800, utilities and internet $3,600, platform fee at 3% of gross $1,440, lodging tax you collect and remit which is not yours, furniture replacement at say $1,500 a year, permit and licensing, insurance already inside your payment number I hope. Call it $38,600 before a single repair, before software, before the drive.

On $48k gross that's under $10k, and you drove two hours a lot of times. Your long-term number, $1,900 against $2,170 of payment and HOA, doesn't cover. So the deal is short-term or nothing. That's the sentence I'd want to be comfortable with before writing an offer.

Naive question from someone about to do the long-term version. I've spent two months reading about tenant screening, income multiples, eviction history, all of it. Does any of that transfer? Or do you just take whoever the platform sends and hope?

@ledger already named the thing I'd have taken three posts to get to. If the fallback use doesn't carry the payment, you don't have a property with two possible business models, you have one business model and a permit you don't control.

Compass, I'd ask a slower question. What do you want this to be in eight years? If the answer is income you don't manage, a two hour drive and a nightly calendar is the wrong shape regardless of what the planning commission does next month.

Agreeing with @anchor and going further. If it only works nightly, and nightly depends on a permit the town is actively discussing capping, then the interesting version of this deal is the one where you skip it and look at something where $1,900 a month covers the payment. That's boring and it also doesn't have a meeting on a calendar that can end it.

Two administrative things people miss. There's usually a state or county lodging tax on top of any city permit, and whether the platform collects and remits it for you varies by state and sometimes by city. Ask the town clerk directly what you're responsible for filing and get the answer in writing, because you're the one who owes it if the platform isn't remitting.

Second, the town permit and the HOA restriction are separate gates. Passing one tells you nothing about the other.

Nobody's said the word saturation yet. Before the meeting, count active listings in that town and how they've moved. If listings are up a lot year over year and the bottom half of them are sitting at 35% occupancy while the top few professional operators hold 70%, you're buying into a market where your revenue depends on being better than the average host on day one. You won't be, first year.

I'd underwrite to the 40th percentile of that market, not the average, and see if the deal still interests you. @ledger's stack at $38.6k is honest. At 40th percentile gross you're probably negative.

$9,000 for a two bed two bath. Sure, if you have discipline nobody has. It goes: mattresses that don't feel cheap, a sleeper sofa because the listing says sleeps 6, blackout curtains in both bedrooms because a guest complains about light in week two, dishes for eight, a coffee setup people won't yell about, patio furniture because it's a lake, then $600 of art and lamps so the photos don't look like a rental. Mine went from $11k planned to $16,400, and $2,100 of that was replacing things guests broke inside five months.

Budget the number you think, add 40%, and don't put the money in until you know the permit.

Two hours away is the part that'll teach you the most. One unit that far out is survivable, you can drive on a Saturday when the water heater goes. What breaks is the cleaner. You'll find one good person, she'll be your entire operation for eight months, and then she gets a full time job and you have Friday check-ins with nobody to turn the unit.

So before you decide anything, call three cleaners in that town and ask if they take Sunday turns in July. If the answer from all three is a version of no, that's your answer about self-managing at distance.

I'll ask the small thing here. A seven night minimum means a guest can't book fewer than seven nights, so you only get people staying a full week? Doesn't that mean the whole calendar is basically summer weeks and nothing else nine months of the year?

@juniper yes, and that's the useful way to see it. Two gates, whichever is stricter controls you. Zoning can allow nightly rentals and the condo declaration can forbid them, and the declaration wins for you. Town caps permits, the declaration's seven nights still applies on top.

Compass, ask the town clerk whether existing permits are grandfathered if a cap passes, and whether a permit transfers when the unit sells. In a lot of places it doesn't transfer, which means the seller's permit isn't an asset you're buying. That varies by ordinance, so read the actual text rather than what the agent says.

On the cleaning line. $140 a turn for a two bed in a tourist town is roughly right, and it goes up in peak because everyone needs the same Saturday. What @thicket said about Sundays is the real constraint. My crew won't take single-unit clients more than 20 minutes off our route anymore, the drive kills the margin, and I suspect that's why your three calls may not go well.

If you get a yes, ask what happens when your guest checks out at 11 and the next one arrives at 3 and the guest leaves the place wrecked. The answer to that question is what you're actually buying.

Who answers the phone at 2am when the door code doesn't work and you're two hours away?

@rigging that's exactly why I've been reading this thread instead of posting one of my own. Compass, if you hand it to a full-service manager they'll want 20 to 25% of gross plus they may keep the cleaning fee. On @ledger's $48k that's $10-12k off the top, which puts you under water before repairs. So the deal as written requires you to do the labor. That's fine if you want the job. I don't want the job, which is why I'm not looking at this asset class.

Coming from zero myself, the thing I'd test first is whether you like doing it at all. Co-hosting somebody else's unit in that town for a season costs you nothing but time and tells you whether guest messaging at 10pm bothers you. Then you'd also know the market's actual occupancy from the inside instead of from a tool.

@verity, I'd push back a little. Nothing wrong with an asset whose value depends on tourism, plenty of good land does. What's wrong here is that the dependency runs through a permit somebody else votes on annually. Own the dirt in a tourism town and the town can regulate what you build on it, and it can't make your acre disappear.

Compass, the meeting is next month. Nobody has ever regretted waiting one month.

Put it on the list, don't put it in an offer. Go to the meeting, and go to the two before it if there are recordings. Get the HOA minutes @arbor asked for, get the permit transfer answer @parcel raised, make the three cleaner calls @thicket described. If it survives all four, the condo will still be there or another one will, because that complex has turnover.

You asked which lines beginners miss. Consumables and the drive, mostly. And the year when you're not on the calendar in shoulder season and the HOA still bills $420.