Branson, MO · Member since 2014 · 27 posts · 28 votes
Who else has been able to leave their job and have freedom in their life from owning vacation rentals listing on Airbnb and Homeaway? I live in Branson, MO and love my business. Who else is out there?
I'll do $500k gross in vacation rents this year, and $1mil next, averaging more then $150k/door/year. No problem leaving my day job, but in the short term I have definitely created another one!
I love seeing these posts in this thread. Akash Yadav, i see what you are saying of the financing side, and i assume you are working to get the financing through your personal credit and such. Try taking to a commercial lender. I also left my job three years ago and have purchased many homes since then, all with commercial loans. Some bankers won't be as familiar with vacation rentals, but you will find one that is. Use your current bookings and cashflow as a strength and forget about talking to personal banking people. :-)
Dean Hamilton, Here is a suggestion for you...go to airbnb and see how many listing are currently in the area you are thinking of doing a vacation nightly rental. Also, think about this, it isn't just vacationers that use nightly rentals. Business travelers, people visiting family during hospital stays, sporting events, etc. also use airbnb and homeaway.
Paul Faryna, See the thread i just posted replying to Dean. Tourist cities are great places to own VR's, but only if you can buy the properties at a reasonable price. Buying at a lower price will give you excellent cash flow opportunities. It is amazing how many people i talk to that use airbnb for more than just family vacations. I hope this helps!
@Brad Moncado thanks for the post, a lot of good information here. I am currently a buy and hold investor living in Los Angeles and investing in my hometown in Ohio. My husband and I have just decided to turn our focus to a vacation rental for our next investment. We are looking at somewhere within driving distance from Los Angeles, a place that our family can use when not rented. So far our top choices are Big Bear Lake and Lake Arrowhead.
Because this will double as a vacation home for us we would be okay with a break even scenario. However, my goal is to make it profitable and continue building a VR business. For that reason we will be looking for something with the highest rental potential versus something perfect for our family. We are still researching to see if this is a larger more expensive home that is more rare or a smaller home that has been updated and suits more travelers.
Is it realistic that I could self manage from 2 hours away without having to visit the property often? Would this require just a cleaning person and handyman or an additional person to handle the keys and other odds and ends?
If I decide to go with full management what sort of fees am I looking at? @Chad C. mentioned 40%, is that standard? Does this include cleaning?
@Nancy Bachety I see that you are from NY and invest in FL, what does this process look like for you? Are you able to turn a good profit? On average how many days per year are you rented?
@Michael Greenberg I am moving in the Vacation rental direction as well. I have projects on the books for my portfolio over the next 18 months for Hawaii, Vegas and would like to pick onother up in Washington to vacation rental. I am building the structures with my Construction company and would love to get into a group looking at similar builds across the west coast and into the Pacific islands.
@Loren Clive Thanks for sharing that link. Could be helpful for identifying the next one to buy. @Carrie Giordano While it's too new to say, I will tell you this. We bought a big house early April, listed it on airbnb without any photos (just our superhost reputation, I guess) then furnished it. The 3 weekends it rented in April was a few dollars shy of the mortgage payments for the first month. We're playing around with the rates and deciding who will manage it best.
I just split the house into 3 separate listings - one for the whole house, sleeps 8, and two for bedrooms only in my shared house. I want to use it myself in the summer but I don't want to stop the cash flow. Time will tell if that market will accept that rental concept. I have a backup place to sleep and I'm flexible. We do plan on visiting every 6-8 weeks and compensating our effective and responsive house cleaner well.
I happen to like this model. I'd hop from place to place - like NY, FL and Asheville, for example - and rent them at other times, in my perfect world. Key would be buying places at a discount in places that will rent year round and that me and my family would like to spend time in. That, and finding excellent cleaners and managers or building a network. Hence, my formation of a vacation rental meetup.
Anyone invest in tropical climates such as St. Johns or St. Thomas? I know you'd have to have a great team in the community that could help as you wouldn't always be there. It would be fun to do all the research and then stay there a couple times a year.
Here is an interesting note regarding the subject of vacation rentals.
They can be bought as a 2nd home using standard 2nd home rates through Fannie Mae & Freddie Mac with 10% down. You are required to stay there 15 days a year. This is good on 1-4 units. It seems this is the best way to finance your next vacation rental!!!
Here is an interesting note regarding the subject of vacation rentals.
They can be bought as a 2nd home using standard 2nd home rates through Fannie Mae & Freddie Mac with 10% down. You are required to stay there 15 days a year. This is good on 1-4 units. It seems this is the best way to finance your next vacation rental!!!
The catch being you can't deduct some rental expenses and it limits your losses.
@Blair Russell I'm not an accountant, so I don't have the specific info. My thoughts were that it didn't matter what type of loan you used to purchase the home, its all about the date that you placed the property into service. So I did a little research to better understand the tax implications. Below is a link to a good article that addresses the various breakdowns.
Good call Blair, typically one of the most expensive bills on deals of this nature is uncle Sam, so careful attention needs to be paid to how you structure these deals.
@Kevin Romines It was just when you said that the loan required you to stay there 15 days a year that was a red flag, one day more than the IRS allows for investments. So you're going to have to break a rule on one side or the other...they are quite tricky...
Last month, a big financial weight lifted off my shoulders.
I immediately started in VR by renting out extra bedrooms in my house. The money has been good, but not great as some other people on BP have reported. On the other hand, it's only been a month!
I would love to grow into this business, and am willing to put in the work. I'll appreciate any advice / suggestions you can provide!!
@Rachan M. I think the reports you are hearing are from people renting full houses or units vs. rooms. And of course most people share only the most positive experiences, but don't lost hope!
My first question would be how are your reviews? If they are all 5 stars it might be time to raise your prices to be more inline with your competition.
You should also find inexpensive but effective ways to reinvest and make sure you are offering the best accommodation you can. A few options are: nicer linens, eclectic and fun decor and furnishings, quality lighting fixtures, toiletries, faster wifi, full guidebook, bike rentals, discounts to local attractions or restaurants,etc. Could you offer pickups or breakfast?) If you offer more you can in turn raise the price, and generally your reviews improve increasing your listing presence and the demand on your place. Also make sure to get great photos and get someone to review/edit your listing to make it sound excellent.
I suppose the next step is to start saving your money, and thinking of the next step for growing your business. Depending on how fast you want to grow it might be time to keep really good books and then maybe you can use your experience to find a partner for your next venture.
Thanks for the great suggestions @Blair Russell! So far, I've received six 5-star and two 4-star reviews, and I immediately acted on the feedback provided in 4-star reviews. Last week, I realized that I was pricing my rooms significantly below market. I've increased the price since, and have continued to get bookings, which is awesome :-) Decor is being worked on literally as I type this!
I'm new to the investment world and someone recently told me of a few VR condos in Branson, MO they believe are deals. I have no idea on where to start analyzing for vacation rentals. Is there any good rules of thumb to analyze with? How would you go about finding a modest vacancy rate? How much does insurance differ? How much on average does management run? I know everything can differ depending on this or that just trying to get some estimates
Where are the most successful EAST COAST locations for SFH vacation rentals? So far, this thread is mostly from areas other than the east coast. Acquisition costs: rental income taken into account.
Central Florida - in the Disney World area - is a good spot for owning a short term rental. The demand here is year-round for vacation rentals due to Disney, Universal and SeaWorld, and there are over 100 golf courses in the Orlando area. Plus you can get to an east coast beach in an hour.
The supply of vacation homes keeps growing, but so does demand. Universal is adding a huge water park. Disney has just opened an Avatar attraction in their Animal Kingdom, and their new Star Wars attraction is due to open next year, which will be a huge draw.
@Keith Courtney If you were to buy a SFH as an investment property in an area close to all of the parks and international drive would you think it would be more lucrative to rent it out traditionally as an annual rental or Airbnb it or do shorter term rentals? I would think the shorter term would producer higher income overall but also be significantly more to manage and A LOT of tenant screening. Would love to hear your thoughts since I've considered the Orlando market.