Mckinney, TX · Member since 2015 · 86 posts · 11 votes
Hello everyone on bp
I Need everyone's opinion on owning vacation rentals and collecting daily rents . Is it profitable , worth it , and a good investment please explain thanks a lot
@Damion Byros I agree with both Lucian and Russell. There are numerous factors involved that can make a vacation property a good or poor investment.
The main three are probably location, supply, and occupancy. Finding an equilibrium between those is the key. For instance, Kissimmee, FL is in a great location and has a consistent occupancy rate (constantly traveled to year round), but is saturated in terms of supply. There's a virtually limitless amount of single family vacation homes there which drives rates way down.
In contrast, a property on a ski resort generally has a good location and relatively low supply but the occupancy isn't consistent throughout the year. Properties there are usually able to rent out extremely well during the 100 ski-season nights but are typically hit or miss the remaining 265 days of the year.
I have a Rental Grader tool that projects the revenue a property can make based on its location and size. Feel free to PM me if you'd like a link to it.
This vastly depends on where you are located, for example you may never have an empty night if you have a nice apartment in SoHo vs owning a house in Missouri.
I would recommend looking for people near you on BP by searching by location and reaching out to some people to ask their advice. Most are more than happy to help and this will give you specific info related to your location as well as help build rapport with your community.
Lucian is spot on in regards to this. A lot of it will depend on the location and desire. Many vacation rentals are very season dependent, so you have to plan to make all the money in a certain time period(s). Others you will be able to rent out all year long, just depends on your approach and area. Good luck with your research.
@Damion Byros I agree with both Lucian and Russell. There are numerous factors involved that can make a vacation property a good or poor investment.
The main three are probably location, supply, and occupancy. Finding an equilibrium between those is the key. For instance, Kissimmee, FL is in a great location and has a consistent occupancy rate (constantly traveled to year round), but is saturated in terms of supply. There's a virtually limitless amount of single family vacation homes there which drives rates way down.
In contrast, a property on a ski resort generally has a good location and relatively low supply but the occupancy isn't consistent throughout the year. Properties there are usually able to rent out extremely well during the 100 ski-season nights but are typically hit or miss the remaining 265 days of the year.
I have a Rental Grader tool that projects the revenue a property can make based on its location and size. Feel free to PM me if you'd like a link to it.
@Damion Byros I agree with both Lucian and Russell. There are numerous factors involved that can make a vacation property a good or poor investment.
The main three are probably location, supply, and occupancy. Finding an equilibrium between those is the key. For instance, Kissimmee, FL is in a great location and has a consistent occupancy rate (constantly traveled to year round), but is saturated in terms of supply. There's a virtually limitless amount of single family vacation homes there which drives rates way down.
In contrast, a property on a ski resort generally has a good location and relatively low supply but the occupancy isn't consistent throughout the year. Properties there are usually able to rent out extremely well during the 100 ski-season nights but are typically hit or miss the remaining 265 days of the year.
I have a Rental Grader tool that projects the revenue a property can make based on its location and size. Feel free to PM me if you'd like a link to it.
Thanks for the reply can you please send me He link thanks
@Damion Byros I'm actually experimenting with a short-term rental in St Louis, MO right now. So far it's going well - though I live in the building so I can manage the unit fairly easily. There are many factors here - some already discussed but also some like local laws (Portland, OR reacted to Airbnb by getting them a special permit, whereas in San Francisco there have been crackdowns) and other regulations you need to consider e.g. sales tax, occupancy requirements. Depending on your location in a city you can do quite well - though a lot of it may be seasonal.
Feel free to PM if you want to discuss what I've done, and what you were considering.
I have a mix of LTR and STR units. I'm actually getting ready to convert 2 of my LTR units into STR. I have 4 units that are traditional vacation rentals that I rent nightly, weekly, or monthly. My other STR units are more for people renting less than 6 months that need furnished units with utilities paid. Mostly people relocating or on temporary work assignments. I have found the short term furnished rental market to be more lucrative in my area than long term rentals. I also manage my own properties and handle all my own bookings and advertising. It's more time intensive than LTR, but I don't mind that part of it and it makes sense for me.