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!
Thanks @Diego Perez! I will make sure to listen to podcast #217. I have been reading "4-hour Workweek" by Tim Ferriss. Also a good read with great tips for making life easier!
I'm considering buying a vacation rental on the north shore of LI,NY. It's a decent size house 4 bed/2.5 bath with a finished basement that could potential be a totally separate space to rent out. It's also on an Acre of land which gets me thinking I could split the property and build another spec house or another rental at some point. The property overlooks the ocean and has private beach access. The area is popular doesn't have the draw that the nearby Hamptons have.
I'm just concerned with the amount of days I'll be able to rent it considering it's a large property, and I would have to pay around $330,000 - $350,000 and guessing that it would have to rent out for about $500 per night. I'm thinking that will limit the number of renters and keep my occupancy low... versus a small 2/2 property that rents for $250/night or less....
I'm also trying to figure out how to put together the financing. I'm planning on selling another property that's a duplex/mother daughter that was a bad investment / provides $0 cash flow but has enough equity to provide at least part of my down payment. I'm wondering how the bank would consider the property? A second home? In which case I assume my debt to to income ratio would have to work. Or can it be considered a rental property and will the rents count as income?
@Jim Hiler you're asking the right questions. It's not likely going to have 50% occupancy but don't let that scare you. Run your numbers. You'll pay all the utilities too. The north shore overlooks the sound, the south shore is on the ocean, btw. As far as banks, less is more. Less information, that is. If it's more than a few hundred miles from your primary, they'll assume it's a second home. You can have several second homes. Rental frequency might be better for a 1 or 2 bar house vs 4 bar on Long Island, unless it's a hamptons house, in which case you have many regulations to consider. Check our Airdna for data you might like to see. PM me if you want me info from my experience. And listen to the recent podcast on this very topic, zeona mcintyre.
Thanks @Nancy Bachety... The occupancy is my biggest concern because my assumption of the amount of nights it will be occupied drives the numbers. To me it seems like the occupancy is a big guess. From the quick research that I've done other similar houses in this area are not even booked up for this summer. The demand doesn't seem to be there.. Meanwhile I know that other vacation rentals on LI (Fire Island or the Hamptons for example) are booked 3-6 months in advance.
As for the financing yes this is far from from primary and if the bank considers it a second home and does not take into account the rental income I'm not sure I would be approved. My question is will take vacation rental income into account? Or can I call it a long term rental? If so what type of documentation do I need to provide for them to take the rental income into account?
Thanks for the tip on AIRDNA I'm doing further research there as we speak....
P.S. of course the north shore overlooks the LI sound but that's the still the ocean!
Super excited about this thread. I plan to jump into the VR game this year. I have not purchased my first property yet and I'm still working my full time job (s) but I will get there. In the planning stages so I will definitely continue to follow this thread.. you guys are my inspiration!!!
Our VR was originally bought in 1988 as a family getaway at Lake Tahoe. It served as such until 2004, when we converted it to a VR. In 2007 it became mine. Bookings were a little slow for the first couple of years, but picked up considerably as people liked the place and we learned how to accommodate guests better. Watch 'Hotel Impossible' for tips and subscribe to the hotel magazines for ideas. You ARE in that business!
Some have mentioned that you must occupy the property a number of nights for financing reasons, which exceeds the number of nights you may use it PRIMARIALLY FOR PERSONAL PLEASURE. The thing here is to never use it for personal pleasure. I keep a logbook and write down every little chore I do while on property, proving that it was a maintenance visit, not a pleasure one. Doesn't mean you can't have a little fun while you're there, but you will find plenty of chores that need doing during regular visits, which I highly recommend. My Tax attorney highly recommends this, as 99% of VR owners don't do it.
This year, the place is on track to generate about $80 K in gross revenue, with about 50% of that going for full management, maintenance and utilities. This spring was an expensive upgrade season, with a new hot tub, furniture and replacement flooring, totaling about $20 K. When you factor in property taxes, the net is only about $ 8 K. This wouldn't support a lot of financing debt. Absent that, I find it to be a good deal and I really enjoy our maintenance visits!
The 4th of July is our "Hot Test" maintenance visit. That may sound like BS to many, but loading up the house with family and friends really DOES reveal any weakness in a fully guest occupied condition. Every year I find weaknesses, either addressed on the spot, or requiring ordering repair parts.
It may not be terribly profitable some years, but it's a legacy property on the shore of Lake Tahoe. We could live there if we wanted to. That's not a bad option to have.
Wow! only 3 years in VR? VeryNice...I just started....I purchased a condo last year in Myrtle.......did well over the summer......lowseason will be my concern....but I am really enjoying it! I am a teacher and can retire in a few years and really would appreciate any Advice..Im thinking of purchasing another Condo in Myrtle...Are any of your properties out of state?
Wow! only 3 years in VR? VeryNice...I just started....I purchased a condo last year in Myrtle.......did well over the summer......lowseason will be my concern....but I am really enjoying it! I am a teacher and can retire in a few years and really would appreciate any Advice..Im thinking of purchasing another Condo in Myrtle...Are any of your properties out of state?
From what I have seen, most people with short term rentals in the Myrtle Beach area either stay in their units in the off season or try to find a longer short term renter. We have a lot of snow birds that come down in the offseason/ winter from Canada. I've been looking hard at rentals near Coastal Carolina University. Our school is growing every year. I'm new to real estate and investing but I would love to talk to anyone that is looking in our area.
I've been doing the VR thing since 2015 with a small twist: I rent out tiny 105 square foot cabins on my rural property (I live outside the Toronto Area). I mainly target people wanting to "escape" the city for a weekend, and it's very profitable. I've since sold all my long-term rentals so I could relax and stop being stressed out by tenants. Never looking back :) VR all the way!
@John D. Said it best VRs are a job. But its a job you can do from a boat, couch, bar, beach.
We will gross well over 100k in VRs this year.
If you want to get in to something that's fairly easy and has big returns talk to @Avery Carl she's a pro. She can find you something that will gross 2% of pp per month very easily and 3% is not out of the question. It depends on how good you are at it.
I put it like this... Anyone can sponsor a race car but that doesn't mean you should be behind the wheel. And in our market if you're not self managing you're not making money. Local PMs charge 40% of gross and they're lousy
I too look for properties that will do 2-3% of purchase price in gross monthly rents, and have no trouble finding them. I will also only purchase properties that will do a minimum of $150k/year gross rents ($150k annually per door).
I also try to stick to properties where we are less likely to bother the neighbors, since we cater to large groups that are in the pool a lot, distance from neighbors is one of the keys to my sleeping well at night. I also have a no-HOA policy (even if the HOA allows short-term now that can always change).
Renting these larger, higher-end homes is definitely more time intensive then a small condo, but at least it is worth our time. With $1mil+ in gross annual rents, I can afford to have people on payroll without it killing the numbers. And with only a handful of homes in our portfolio that are not far from each other, my staff is not stretched too thin. For me that $1mil in gross rents seems to be the magic number where I can step out of the equation personally, appropriately staff their management, and still see excellent returns.
We're trying to change one of our properties from long term to short-term (VR). Does anyone have any recommendations for home insurance that covers this type of activity?
Robert Nason I spend my summers in mid coast Maine and have Air BnB's there that are doing extremely well. How did your summer turn out in your property in Kennebunkport? Thanks!
Great thread! We just purchased our first VR on the shores of Lake Coeur d' Alene in north Idaho. I grew up in north Idaho and have always wanted to move back there so this seemed like a good way to get a foothold.
I have spent the entire summer furnishing and fixing up the place and it will be ready to go come spring 2018. I am hoping to at least break even. I know that isn't the BP mantra but we have to start somewhere!
i have 9 condos in torrance and inglewood next o lax im planning to STR starting with one first but just alittle worried if HOA caused any problem .i hope these areas are good for tourist rental
Who wouldn't want to take a vacation next to Los Angeles International Airport? It sure beats dealing with the crowds around the sunny beaches and other touristy areas to visit and stay.
We are been working with a realtor to find a VR condo in Florida. We are also interested in doing some flips there as well. I plan to be the PM and do PM for others as well.
Would like to find some private investors to help with the flipping.
Hey Brad/All,
My husband and I are just getting into the VRBO and long term rental market. I’d love any tips you can give for self managing effectively.
Thanks!