Vacation Rentals seem very lucrative!!

[Kristi Bass]

VRBO's are they a good way to maximize a properties returns? I have 2 very nice properties under contract. One has a main home, 3k sq ft with a 1 bedroom cottage, a 2 bedroom cottage & an efficiency apt. The other property was a renovated barn that was just featured on the fixer-upper tv show! Both properties are extremely unique but both seem perfect for short term vacation rentals thru Airbnb or VRBO website booking services. Have local friends who are doing this with their home & stay at about 90% occupancy & they are quadrupling what their mortgage expenses are every month. In fact they are looking to move out of the home permanently to keep from living with family pretty much all the time. So in trying to decide if this is a good direction for me to take on these 2 places it if there may be pitfalls I'm unaware of. I have forecasted the numbers & at 25% occupancy (at local comp rates) I cover my NOE. Would love any advise or theories about going this direction.

[Russell Gronsky]

Make sure you have an alternate strategy for these properties if and when laws in your area change on VRBOs. If doing VRBO is your only strategy to cash flow off these properties, it is too risky to take on.