Are vacation rentals still worth it?

[Collin Hays]

As we return to the post-pandemic pace of supply and demand, investors are beginning to count the cost of operating a vacation rental, and if it is all really worth it.  Well written article here.  One huge factor not mentioned is rising interest rates:   If I finance $500,000 and have to pay 10 percent interest, I have to generate $50,000 per year just to cover the interest payment.  Two years ago, I might only need to generate $20K to pay the interest.   For all but the most exceptional deals, this is no time to be investing in anything that requires debt service.  

After an unpredictable summer, Airbnb and Vrbo operators are deciding if the headaches of hosting are worth it (msn.com)

[Zach Edelman]

There are plenty of lending options for short-term rentals both conventional and non-conventional that are lending well under 10% interest. For example, I know for DSCR rates for short-term rentals currently, rates are typically anywhere from mid-7's to low 9's on a 30 yr note.