I am looking at a couple investment properties, in a very busy vacation lake town here in Michigan, to be used as a vacation rental home. I have a good feel for the rents, have the marketing in place myself from what I use on my other properties, the city is a place that I am close to so can have my existing infrastructure reach quite easily, and am comfortable/familiar with the market. The city doesn't have any crazy restrictions either. For those that have delved into this strategy before, are there any other barriers I need to account for before pulling the trigger?
Thanks in advance
The thing you might want to get a better look at are your expenses. Things you will need to consider in addition to your PITI are utilities, cleaning costs, maintenance, supplies such as toiletries/paper goods etc, and any applicable taxes that apply to short term rentals in your area.
Maintenance costs can be somewhat higher with a vacation rental because of the constant turn over and a good cleaning person, while worth their weight in gold, can add to your costs unless you pass the entire expense on to your guests. Short term rental taxes may apply to your vacation rental as well. In Nh they are 9% and RI is considering 13%. Also, we keep our vac rental stocked with paper goods, soaps, detergents, coffee filters, and a few other small things that guests appreciate but it can add another $50-$100 per month in the summer season. All in all we'll worth it.
I also agree with Josh. my vacation rental is in Clearwater Beach Florida and there is a 12% vacation rental tax which is passed on to the guest.I also use VRBO and home away for my advertising and that has worked out well we rent about 39 weeks out of the year
Can I ask how many weeks or even nights per year on average you keep your vaca rentals occupied? I am an experienced flipper but looking/interested in vaca. rentals here in certain parts of Illinois (resorts, lake areas, etc.) Any input/feedback is appreciated.
We looked into doing this on our lake and found that some neighborhoods don't allow vacation rentals. Some neighborhoods don't even allow you to live there full time!
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