I'm looking at a couple of properties I think may be good candidate as vacation rentals. Does anyone have a good model they follow for vacation rental investing that they recommend?
I'd probably stay away from that model, unless it is a property that you will enjoy as well.
You are from my state. The majority of midwestern vacation properties are seasonal.
If you go to Wisconsin, I have a good agent. PM for his name.
Another area I like is west coast of Michigan. You have Galena as well.
My parents have a vacation rental in Palm Springs California. There is an established industry there for short term rentals and management. Lots of areas don't have this.
Keep in mind, the renting out of these places has been revolutionized by AIRBNB. Great site.
You'll need someone to turn over the property every time it gets rented. Feels like running a hotel.
One last thing, the pricing of these homes weaken with an economic downturn. They are luxury purchases for many, not primary residences.
@Jeff Simpson I’ll follow the thread but I’ve never been able to make it work. I’ve found deals where it would cash-flow with 25% down but not as well as a comparative investment in apartments. Most of the time you get killed on property management (25% instead of 10% —
@Andrew Johnson Do you find that the increased management is local to your area or general throughout the country for vacation rentals?
I am here in Orlando and deal a lot with short term rentals. There are property managers here that do not require that they market your property for short term rentals when they manage your home. Depending on the size and type of your home, they charge anywhere from $150 to $350+/month. Cleanings are an additional charge. I advocate to vacation home owners that they use this type of property manager and do their own short term rental marketing - it's not difficult or time consuming. Then they save the 20-25% that the other property managers charge, which enables them to make a profit.
@Jeff Simpson It varies by market. I looked at beach markets that were around 25% and some ski towns were up to 40%. The challenge is that it’s regional and there isn’t a ton of variation in local rates. So it’s a little irrelevant if you think it’s *too high* unless you want to start a competing PM company. At least that’s been my experience looking at a few areas.