Southern California Vacation Rental

6 Replies

Hi everyone!

I'm thinking of purchasing a vacation rental in a Southern California city that has several wineries. To me it seems that there is further need for lodging in this area. I'm just wondering if there are any guidelines/formulas for VR's similar to the 2% rule for sfr's. For the quality of the area, and the fact that it's in Southern California, prices are pretty "reasonable". Roughly 350k for a newer 4 bedroom home. What kind of occupancy rate and nightly rate would make this deal make some sense?

Thanks for the help everyone

Trevor

Occupancy and nightly rate depend on the area. At what area are you looking?

@Trevor Lohman , I just asked a similar question I think a day or two ago, some good info on various costs to look out for, here's that thread:

https://www.biggerpockets.com/forums/52/topics/123754-do-you-use-the-same-metrics-to-analyze-a-vacation-rental-as-you-would-a-regular-rental

I actually have a house in Winchester, just north of the wine country there that my parents stay at. Figured I could just do a standard rental on it whenever they decide to leave, but the vacation rental thing is intriguing. Will def like to see what you dig up about the Temecula wine country vacation rental market, good luck!

Hey Y'all,

I crunched the numbers on the 108 airbnb listings in Temecula.

The average listing price per night is $111, and this includes room shares, and single rooms in someone's home, and whole houses.

The vacancy rate across the week is about 60%. This means that the average listing is unoccupied for ~4 days of the week.

You can see the spreadsheet here: Temecula9April2014VacancyRates.xls

Let me know if you have any questions. I can also recreate a spreadsheet that is more similar to what your looking at.

-Evan

Wow thanks for the feedback guys!

@Evan R. Holy cow that's awesome thank you for that. When looking at homes on airbnb that are similar to the homes in my price range, and in the area that I am looking (off of Rancho California road more or less) the typical rate looks to be about 160-220 a night. Pretty big range. So assuming a 40% occupancy rate like you said I would be looking at 1920 to 2640 revenue per month.

Hmm, sounds like on the low end I'd lose some money and best case I would make a slight profit. Can't overlook the value of having a nice home in wine country for ourselves either though I guess. Lot's to think about.

Thanks guys! You've got my brain going now.

Trevor

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here