Anyone have an option on Vacation Rentals? My guess is that they are not as profitable as a more standard buy and hold areas.
Anyone here specialize in this kind of market?
I can't say that I specialize in it but I have a few friends that say that in the right market it can be extremely profitable. Look for vacation areas that bring longer-term renters. For example, in Northern Michigan, many older ones leave the frozen north and winter in Florida or Arizona. During this time, they rent their houses out to Southern Michigan vacationers that come up to ski and participate in other winter sports.
Just 1 or 2 months of renting out their home can cover their mortgage payments for almost a whole year.
Our group is in the Myrtle Beach area and deal with Vacation rentals for all of the Grand Strand for our clients.
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We focus on Mission Beach, San Diego. I have a property that does $125,000 a year in rental income as a vacation rental and as a long term 1 year lease rental would do about $60,000. A property like that sells for around $950,000.
I specialize in helping investors purchase vacation homes!
I don't think you will find a bigger market, or economy, for short term rental homes than Central Florida around Disney World. There are literally thousands of homes for sale, and the market is very strong. New vacation rental communities are being built, and ROI is very strong. 8% is average around here, but it's easy to get north of 10% if your savvy. Let me know if I can help you.
We have 3 vacation rental properties in the Adirondack Mountains, all are profitable, make 15-35% yearly return on investment. I also manage a bunch that I don't own in NYC and Florida.
We are looking to purchase vacation rental property in a warmer climate - just came back from Eleuthera, really like the idea of doing the same thing in a place like that.
HOWEVER, there is a LOT of work involved in renting weekly, it is not passive income.
Your initial investment and yearly expenses will include things that long term rentals don't - such as furnishings, utilities, maintenance (houses must be in tip top shape at all times!), supplies (sheets, towels, cleaning supplies, bulbs, propane for grills, dishes), yard maintenance, advertising, insurance (it's higher!), housekeeping, snow maintenance to name just a few.
We use our 3 homes frequently so there is an enjoyment factor as well - but the responsibility is much greater for vacation rentals than for long term rentals, be sure you have the time. Hiring someone to take on the responsibility can eat away at profit, and as the old saying goes - noone will do the job as well as you (or something like that). A great job is essential to keep the rentals coming, bad reviews will greatly effect your income.
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