Three years ago I was a newbie real estate broker working on commercial leases. Now I have my own growing brokerage and a fresh perspective where I see my broker job as my "day job" which I eventually want to quit so I can be a full time real estate investor.
I bought my first condo (primary residence) last Feb, and next week I close on condo #2 (new primary residence). My first condo is now a short term furnished rental. Why do that, you ask? It's a small studio in an ugly building in the great Cap Hill neighborhood in Denver. But it is unique, the only unit on the 4th floor - I call it the "penthouse" with a giant deck, mountain views, and a parking spot. They couldn't give this place away last year due to financing restrictions on the building. I can get $900/mo with a regular lease, but I'm getting $1450/mo by Airbnb'ing it to travel nurses. I haven't even closed on my new place and it's booked for the next five months. That's going to pay both my mortgages and cash flow $250/mo. It's like I'm getting the new condo for free!
Next stop, a true vacation rental someplace warm!
That's awesome! Are you using a property manager for the short term rental? We have a vacation rental in Kihei, Maui so if you ever have any questions about having a rental "someplace warm" feel free to ask.
Congrats Micki! AirBnB is awesome, I use the site for my vacation rental in Las Vegas. It is a little more work but I make a ton of money compared to renting it out on an annual basis.
I think vacation rentals are at a start of a boom and there will be more competition in the near future. Get in now, get a ton of positive reviews and your vacation rental will be a cash cow for a long time!
If you want to look for an investment/vacation home in sunny, warm central Florida, I'll be happy to help you in any way I can. A few quick facts about our vacation home market - Because of Disney World, Universal Studios and SeaWorld, millions of tourists from all over the world come to central Florida each year. Currently, there are about 27,000 short term rentals here. Many are bad investments, and there are some that are very good investments.
The keys for finding good vacation home investments here are acquiring a good understanding of the market and performing thorough financial analysis of each property you are contemplating purchasing. These keys hold true for anywhere. Too many people purchase on emotion without learning a market and performing a thorough analysis.
@Micki M. congrats on your rental. I've looked into several short-term rental options myself, but often run into 30-day minimums.
I just got back from the HomeAway Summit last weekend in Austin. Can you share any insight into reasons for using airbnb vs homeaway or others? Is it clientele, fees or something else? I'd be interested in your feedback.
I have a colleague looking in Orlando. Can you elaborate on the "bad investment" aspect? Does it relate to the numbers, or more to market issues? I keep reading that Orlando is still a good buyers market, with room to grow in value, but realize multiple variables make the deal.
Hi Susan -
When I speak of bad investments, I am speaking about vacation rental homes that don't produce a good return on investment. Many in fact actually lose money - the rental income falls short of covering all expenses.
The vacation homes here in central Florida that are good investments are usually found in gated communities and, in most cases, are a minimum of 6 bedrooms. There is lots of competition for rental bookings that are 3-5 bedrooms - not as much for 6 bedrooms and up. The rental rate is so much better for 6 bedrooms and up, yet the costs of operating a larger home are not proportionately higher as compared to the smaller homes.
As far as the Orlando vacation home area being a buyers' market, it depends on the vacation home community. Some communities are a buyers market. Others are not. The good deals in the good communities are getting harder to find.
Thanks for all the love everyone!
@Jeremy Baker I am not using a property manager since I only have one unit, and with multi-month stays as my strategy turnover is manageable. I do pay a service to clean. Any properties out of state I will want to be fully managed. Hawaii is top of the list. I'm hoping to come shop in Jan/Feb.
@Keith Courtney Thanks for speaking up. Florida is on my list, I will connect on BP and keep in touch. Local market knowledge is definitely key!
@Susan Gillespie I use Airbnb because originally I was renting my primary place out while I was out of town (which helps pay for travel!), and actually my HOA has a 60 day minimum. But because I want to rent to travel nurses or similar tenants and have less turnover I only do multi-month stays. It's not as much income as daily rental rates but a lot less work and so far a better vacancy rate. I will be investigating other services/marketing, I'm currently reading through Matt Landeau's VR Marketing info and applying things little by little.
Congrat @Micki M. , I'm interested in vacation rental as well. wouldn't anybody want a vacation house that can pay for itself and available to use when you need it! glad to see it worked out for you.
Hi @Micki M. ,
Congrats on the second property!
I have a similar model for a condo, renting mostly to people relocating. By providing a furnished apartment, with a shorter term, flexible lease, I'm able to keep it rented for top dollar.
I'm curious, are you specifically targeting traveling nurses? If so, how are you doing that? Is it just the population that is looking for the longer term leases on AirBnB?
@Lynn Currie My idea was to specifically target travel nurses and academics. Simply by increasing my minimum stay to 30 days I started getting those tenants on Airbnb, and was hoping some word of mouth would grow from there (I really like the social media aspect of Airbnb for marketing). But I'm also looking into getting listed with some agencies who help travel nurses with relocation.
Thanks for sharing, @Micki M. . That's an interesting strategy.
On a personal note, it's just more fun. I've been out watching the World Cup with my current tenant - she's Italian, has a PhD in Conservation Biology, and is just a really interesting person.
You can also market short term furnished properties to visiting med students who are doing externships and internships. I rented out rooms that way in Seattle and posted my ad on the University of Washington Medical School bulletin board. Always had responsible renters. Many great experiences and memories from those years. One of the gals became a long term friend of mine.
Thanks for sharing the story. I am looking around for a vacation rental house in Galveston Texas as well. If you could have a vacation home and it pay for itself, thing couldn't get better! I love that you mentioned AirBnB I heard lots of good thing about the site and you you just confirmed it
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