Is there no positive feed back for Vacation Rental?

Question

I have combed through a lot of articles concerning vacation rentals and the majority feedback I see Is it isn't profitable, PM eats up most of your income, Your lucky to break even. If I understand correctly it seems as if Vacation Rentals aren't for people wanting to make money but more so for people wanting another home and are looking to offset the cost of owning it. So then the perk is paying minimal every month to own an entire home instead of the entire mortgage.

I really hope there are more success story's out there of people being as profitable or more profitable with VR than the negative reviews I'm reading about that seam more common place

I really hope there are more success story's out there of people being as profitable or more profitable with VR than the negative reviews I'm reading about that seam more common place

Sean Walton · Answer

Podcast 57 also talks about vacation rentals.

One potential issue is you may be competing with people who use their second home as vacation rental income part of the year and for personal vacation the rest of the year so they may be willing to price their space less than you would need to for cash flow. Combine that with  Airbnb, Homeaway, etc. which have expanded the market for potential tenants but also lowered the barriers to entry for your competition. Make sure it is still profitable as a standard rental and make sure you plan for vacancy and lower rates in the off season.

Monika Haebich · Answer

Love the blog post Logan A.. Definitely sharing. There's a lot of value in automation and professionalization.

Logan Allec · Answer

I stayed at an Airbnb recently, and the owner, Daryl, must be making a killing.  It was an old 19th-century boarding house that had 9 rooms in it with a guest house in the back with a couple more rooms.  With its prime location 5 minutes from Downtown L.A, there is no vacancy most nights, at least none that I saw on Airbnb.  On top of that, he has systems in place to automate everything without needing a property manager: automated check-in + a cleaning service that comes every morning like clockwork.I'm sure there's more complication to it than that, but clearly this guy is making far more money off using this property as a vacation rental (primarily, it seems, to professionals who need a place to crash near Downtown) than he would off of renting this crusty old mansion out to God knows who.  He's taken this asset and, as far as I can tell, put it to its highest and best use.  I wrote about it here if you're interested.  Bottom line: if you're in the right location to keep occupancy at a maximum and you have systems in place to keep headaches at a minimum, you can do very well.

Monika Haebich · Answer

@Sean Walton, while yes there are lower barriers, the popularity of sites like Airbnb and HomeAway are also changing people's preferences completely and growing the pie: In 2013, traditional rental sectors and the sharing economy combined were worth $225 billion. By 2025, PwC estimates that they'll be worth a combined $670 billion, with the sharing economy growing from $15 billion to $335 billion.

Combine that with the need and demand for professionalization within the industry, and there's plenty of room for a seasoned investor to do well in the space.

Also, if you can do an outright rental where you pass off all of the risk to a property manager (and not pay commission), it becomes a lot easier to justify.

Keith Courtney · Answer

Jacob -

There are a lot of discussions on BP where there are many positive comments about vacation rentals.  I am in Central Florida where there are 1000's of vacation rentals around Disney World. Some make money, and a good many of them don't. The profitable ones are in good locations, offer the right amenities, have good property managers and have a good marketing plan to secure rentals. Vacation rentals are like all other types of real estate investments - there are good ones and bad ones.  You just have to do your due diligence to give yourself the best chance in investing in the right one for you.

Good luck,

Keith

Jesse Lynch · Answer

On episode 114 of the Bigger Pockets podcast they talk with a guy named Scott Sutherland, who focuses primarily on vacation rentals and seems to do very well.

Here's a link to it:

https://www.biggerpockets.com/renewsblog/2015/03/1...

Jacob Beard · Answer

thanks for your response

Is there no positive feed back for Vacation Rental?

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