Three firsts for me this week
Been doing this for several years, but I signed contracts on two new houses this week that represent three firsts for me.
House 1 - tenant-occupied 4/2/2. My first purchase from a wholesaler, and my first purchase of a tenant-occupied house. I've been approached by a lot of wholesalers with dubious deals. I've watched this particular one for several months now, and his ARVs seem realistic (even low, in some cases) and repair costs seem in the right ballpark. He was doing a group tour and on-site auction of a house in a school district I regularly buy in. Went just intending to observe, but ended up pulling the trigger. I'll be figuring out the process of absorbing an existing tenant over the next week or two.
House 2 - My first vacation rental! It's 1.5 blocks from Cowboys Stadium. I've been looking for years to get something in this area. Saturday, as I was walking 10 blocks to the stadium for a concert from the discounted $40 parking spots, I pulled up Realtor.com, saw that one had popped up, and bought it the next day. It was priced a little high for a basic 900 sf 2/1/1 in that are, but as a vacation rental, the cash flow should be excellent. I'm very excited about this one.
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as a vacation rental do think people would rent that for the cowboy games... in what context would a home in that location be a vacation rental.. I am in Oregon does not sound like a place to go vacation LOL... insider knowledge right ?
@Michael Hayworth and @Jay Hinrichs
Its nice to have a vacation rental. I would imagine you would have The Cowboys Stadium, 6 Flags and Hurricane Harbor in the Summer? Will the place rent in the winter too?
Micheal : I am just not getting the sense of that being a GOOD deal . I guess I would have to ask during a Cowboys Home Game How many per year ? along with how many other week-ends per year is the stadium utilized ?
D uring these type events in the Dallas / Ft Worth Metro area what is the Hotel / Motel capacity . Almost impossible to get a room etc ? Most of the Coporate companies will have already rented out a Penthouse . The need as I see it is maybe for 6-8 hours per event .
If I was a Cowboys fan and just HAD to be at the home games my first inclination would be to call a hotel . How are you going to Market the Rental ?
Guys, don't sweat the vacation rental deal for me. :) My total expenses with mortgage, insurance, property tax, repair reserve, and the 10% reserve I put in for management, even though my staff manages my properties, will be around $800/mo.
The Cowboys draw from a multi-state area. People come in from all over and need a place to stay. The whole appeal of a vacation rental is having a house, with a patio, backyard for grilling, parties, etc. And there's no other vacation rental on AirBnB or VRBO that is a 5-minute walk from the stadium.
Plus, Jerryworld pulls in top college games, which draw fans from all those schools, and the biggest concerts in the region, which draw people from hours away (at the Kenny Chesney concert last week, we were hanging out with a group of 18 people who had driven 8 hours to be there) . I'm hoping to get the place renovated before the Taylor Swift concert in a couple of months. Then there's the Texas Rangers (I can't imaging driving hours to watch bad baseball, but some people do) and Six Flags over Texas, both within a mile.
There are 15-20 events a year that will generate in 2-3 nights what a normal month's rent would be for this place as a single family rental. plus lower rents over the summers just for families coming to Six Flags when there's no other events. If there's any event where it's NOT rented for some reason, I'll send a couple employees over there to park cars in the yard at $50 a pop.
(Not to mention, the the next time we get the Superbowl, it'll rent for ridiculous rates for a single week.)
I'm very hardnosed about not accepting unrealistic income assumptions on a business, but I'm thoroughly happy with all the numbers on this house.
I'm surprised nobody's saying how they really feel about the Cowboys. I'll take my cue and end here.
@Michael Hayworth Congratulations on the three firsts! I think the Cowboys rental house is an awesome purchase. Someday they will be good again...
Since it is your first vacation rental, I will give you some unsolicited advice. The name of the game for vacation rentals is repeat customers. Make your place the best on the market by offering small, inexpensive extras, like instant oatmeal packets for breakfast, granola bars and bottled water for side trips. You can pick this up at Costco for almost nothing, but it means a lot to the people who are renting your place, and they will come back to you when they need another place to stay. Just make sure everything is individually wrapped.
Furnish the kitchen with dishwasher-safe everything. Have a set of children-sized dishes and utensils. Provide spices and basic meal-prep items, like vegetable oil so people don't have to go out and buy things to make pancakes in the morning.
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Originally posted by @Jay Hinrichs:
as a vacation rental do think people would rent that for the cowboy games... in what context would a home in that location be a vacation rental.. I am in Oregon does not sound like a place to go vacation LOL... insider knowledge right ?
Only when they get a new QB and the Cowboys actually win a Super Bowl:)
@Max T., I'll rent to fans of other teams, too.
There is, however, a $200/night surcharge for Eagles fans.
you da man @Michael Hayworth! I think your purchase will be a good deal for you. Best of luck.
Congratulations on the firsts! I think the vacation rental is a great idea. You've got an immediate attraction close to the property that could bring in lots of visitors. It's even nicer that this falls over football season because normally those are not peak hotel occupancy times anyway. Just pray that occupancy isn't tied to the Cowboy's performance...
What's parking like on game days? Could you reserve some spots at the property and charge for them? Sell a season pass for parking or something.
Awesome week Michael! You'll have to share a little more with us during next month's Fort Worth meetup! I'm curious to hear how the Cowboy stadium rental goes long term...keep us up to date!
Please post up about your experience with the short term rental, would be quite interested to hear how this strategy works out for you.
It looks like vacation rentals in the area run approx 40% occupancy rates - but that still works out to 50-60% more gross income compared to a traditional long-term rental. I guess, have to weight against the extra investment in furniture and time, but should be well worth it.
-Dmitri
+1 for the Surcharge for rentals to Eagle Fans!
What kind of neighborhood is the vacation rental in? I know there are some lower end houses close. I have 2 off of 360 & Abrams area.