Vacation rental program

20 Replies

My partner and I have have been discussing multiple strategies to break into the industry. We are interested in purchasing a vacation rental and immediately participating in a rental program. We have enough capital for 20% down on $200k-$250k property but would need a loan for the remainder. Any insight on the type of loan and how we could put the property in a LLC would be great. Also any specific areas or companies that are professionally managed and well kept would be great. We would love to be near a beach and not necessarily looking to make money just generate enough to cover all expenses.

Thanks to all

Buy bank foreclosures and rent them to travelling workers with a per diem.  It's what I do.  If you have that amount of capital that you say you do, that's more than enough to buy 2-3 houses in the right market.

The banks will generally not allow you to put a financed property in an LLC at closing. You can generally move the note to an LLC afterwards.

Generally if you have one property and have proper insurance it isn't likely you will need an LLC.

If you are set on having it "professionally" managed, you might break even. It's not hard to self manage from a distance, but it's not for everyone either.

St. Augustine is a top tourist destination, near the beach, and options for managers. I do it easily from 1000 miles away.

Of course, there's the Great Smokey Mountains, a long time STR area with many managers but so many self-managers here too.

It's just a matter of time before @Lucas Carl replies to you:)

@Adriane Boggs lots to unpack here the LLC question is a whole hour conversation by itself which is best spent with an attorney.

@Nancy Bachety is correct, if you don’t want to answer a few questions and handle things yourself you’ll likely lose money. Self management is very easy I can teach you in about an hour. Just not today I’m currently suffering from oyster food poisoning while on the beach. No fun! 

We are self managing our Idaho home from about 370 miles away. So far so good. We have a good cleaning team and handyman if needed.

It isn't that hard really, but remember, your usage must be 14 days per year or less if you want to take advantage of all the deduction of expenses for running a vacation rental home.

As far as loans go, we just applied for a 2nd home loan and that was that. No LLC as we only have the one property.

I highly recommend Proper Insurance (Lloyds of London) for vacation home insurance. It is expensive, but it covers it all.

As you read here, the LLC is not easy, or possible, to use when getting a mortgage. You can do a quit claim deed once you close and season your mortgage for a year which means changing the deed from your name to the LLC. The bank can always call you to pay up in full if you do that though but as long as you pay, or the rates don't skyrocket, they'll allow you to keep paying. Also, some states charge you to file a change (cheap) but some charge a title tax too.

I wish @Paul Sandhu would just wholesale and then manage-for-a-fee one of his properites already....(Sign me up, Paul).

@Lucas Carl Where are you now? So sorry to hear about those oysters. Or was it the adult juice???

@Lucas Carl   Oyster shooters are my favorite.  For those of you not in the know, it's a fresh shucked oyster in a shooter glass with a few drops of hot sauce and a few ounces of beer.  I get a few dozen oysters, and have them for dinner.

The next morning I have them again for breakfast, but substitute orange juice for the beer.

@Nancy Bachety

I’ve been on an oyster craw in Destin and I got bit bad. Fever. Can’t get out of bed. I’ll spare you the rest. 

Someday uncle @Paul Sandhu and I will get tanked together. 

@Lucas Carl Oyster crawl?  Sounds interesting. Lots of Airbnb's in Destin. Hope you are in good hands. When you and @Paul Sandhu do that tanking,  @Julie McCoy and I will probably get a good kick out of it!

Feel better.

Originally posted by @Nancy Bachety :

@Lucas Carl Oyster crawl?  Sounds interesting. Lots of Airbnb's in Destin. Hope you are in good hands. When you and @Paul Sandhu do that tanking,  @Julie McCoy and I will probably get a good kick out of it!

Feel better.

 Sign me up!  That's something I definitely want to be present for, LOL  

The oyster food poisoning, hard pass, thanks.  Feel better soon!!!  

I second Nancy's desire to get on Paul's bandwagon!  If you ever want to get into management-for-others, Paul, let us know... don't worry, I won't hold my breath.  ;-)  

I didn't put my properties into an LLC, I put the management of them into an LLC. Guests have an agreement only with LLC and of course strong hold harmless verbiage and waiving any claims against properties or owners. Insurance names both owners and LLC

Also, I never recommend new people start out with VRs remotely. 

Banks aren't big fans of vacation rentals yet and would rather see a lease signed for $1000 a month than have $30,000 in pre-paid bookings (but what if they cancel?!?!) Typical bank think. SMH. And don't even get me started on their lending to people with the "security" of a W-2 vs business owners that know how to make money. But I digress. If you can't find a traditional bank that will lend to you, there are vacation rental loan companies. I just met a guy this past week at a REIA meeting that finances short term rentals.

There's a lot to vacation rentals and if you don't know what you're doing, you can lose your shirt. Self management is definitely a possibility as long as you set yourself up to succeed. Money saved by DIY can actually cost you if you don't do your research. Google what's happening with Airbnb's in Miami at the moment. If you'd like to chat, send me a message! 

And don't forget to include me in the party @Lucas Carl, @Paul Sandhu, @Julie McCoy, @Nancy Bachety

Originally posted by @Ken Latchers :

I didn't put my properties into an LLC, I put the management of them into an LLC. Guests have an agreement only with LLC and of course strong hold harmless verbiage and waiving any claims against properties or owners. Insurance names both owners and LLC

Also, I never recommend new people start out with VRs remotely. 

I disagree with both of these statements and highly disagree with the latter. In fact the biggest perk of a vacatiin rental is that it can be managed quite easily from anywhere in the world with a smart phone. 


We will have to agree to disagree. Remote mgmt of VRs is NOT "easily managed from anywhere in the world." First, it forces you to rely on others with no ability to go there on your own if something goes wrong. Cleaners don't show up. Property Management Company often tend to be less than stellar. 1 of 100 little things goes wrong that you don't anticipate and you can't take care of it yourself. I have three long term rental properties 700 miles away and they constantly throw up some kind of unexpected problem. I am have gone through 6 property managers. This is absolutely not something that a new to Vacation Rental owner should be doing. It is simple enough to find decent areas that you can drive to without needing to depend on people you don't even know.


I disagree with both of these statements and highly disagree with the latter. In fact the biggest perk of a vacatiin rental is that it can be managed quite easily from anywhere in the world with a smart phone. 

I easily received investment property mortgages on two properties from two diff local banks. Although already were partly occupied, they full knew I intended to make them VRs and they didn't blink. 

Originally posted by @Wendy Schultz :

Banks aren't big fans of vacation rentals yet and would rather see a lease signed for $1000 a month than have $30,000 in pre-paid bookings (but what if they cancel?!?!) Typical bank think. SMH. And don't even get me started on their lending to people with the "security" of a W-2 vs business owners that know how to make money. But I digress. If you can't find a traditional bank that will lend to you, there are vacation rental loan companies. I just met a guy this past week at a REIA meeting that finances short term rentals.

There's a lot to vacation rentals and if you don't know what you're doing, you can lose your shirt. Self management is definitely a possibility as long as you set yourself up to succeed. Money saved by DIY can actually cost you if you don't do your research. Google what's happening with Airbnb's in Miami at the moment. If you'd like to chat, send me a message! 

And don't forget to include me in the party @Lucas Carl , @Paul Sandhu, @Julie McCoy , @Nancy Bachety

Originally posted by @Ken Latchers :

We will have to agree to disagree. Remote mgmt of VRs is NOT "easily managed from anywhere in the world." First, it forces you to rely on others with no ability to go there on your own if something goes wrong. Cleaners don't show up. Property Management Company often tend to be less than stellar. 1 of 100 little things goes wrong that you don't anticipate and you can't take care of it yourself. I have three long term rental properties 700 miles away and they constantly throw up some kind of unexpected problem. I am have gone through 6 property managers. This is absolutely not something that a new to Vacation Rental owner should be doing. It is simple enough to find decent areas that you can drive to without needing to depend on people you don't even know.


I disagree with both of these statements and highly disagree with the latter. In fact the biggest perk of a vacatiin rental is that it can be managed quite easily from anywhere in the world with a smart phone. 

 Sounds like you need to fire your cleaner. Give me a call sometime I’d be happy to help you revamp your business and make it easier on you. 

Originally posted by @Ken Latchers :
I easily received investment property mortgages on two properties from two diff local banks. Although already were partly occupied, they full knew I intended to make them VRs and they didn't blink. 

Originally posted by @Wendy Schultz:

Banks aren't big fans of vacation rentals yet and would rather see a lease signed for $1000 a month than have $30,000 in pre-paid bookings (but what if they cancel?!?!) Typical bank think. SMH. And don't even get me started on their lending to people with the "security" of a W-2 vs business owners that know how to make money. But I digress. If you can't find a traditional bank that will lend to you, there are vacation rental loan companies. I just met a guy this past week at a REIA meeting that finances short term rentals.

There's a lot to vacation rentals and if you don't know what you're doing, you can lose your shirt. Self management is definitely a possibility as long as you set yourself up to succeed. Money saved by DIY can actually cost you if you don't do your research. Google what's happening with Airbnb's in Miami at the moment. If you'd like to chat, send me a message! 

And don't forget to include me in the party @Lucas Carl , @Paul Sandhu, @Julie McCoy , @Nancy Bachety

Did they have a signed lease on them already? Even if you intended to turn them into VR, if you had a signed lease, financing them would be easier. If you have a long track record with the banks as an investor, that would also help. Otherwise, it's not the norm. 

Signed leases on part, but they were not particularly worried. Both banks knew my plans and were quite supportive.

Originally posted by @Wendy Schultz :
Originally posted by @Ken Latchers:
I easily received investment property mortgages on two properties from two diff local banks. Although already were partly occupied, they full knew I intended to make them VRs and they didn't blink. 

Originally posted by @Wendy Schultz:

Banks aren't big fans of vacation rentals yet and would rather see a lease signed for $1000 a month than have $30,000 in pre-paid bookings (but what if they cancel?!?!) Typical bank think. SMH. And don't even get me started on their lending to people with the "security" of a W-2 vs business owners that know how to make money. But I digress. If you can't find a traditional bank that will lend to you, there are vacation rental loan companies. I just met a guy this past week at a REIA meeting that finances short term rentals.

There's a lot to vacation rentals and if you don't know what you're doing, you can lose your shirt. Self management is definitely a possibility as long as you set yourself up to succeed. Money saved by DIY can actually cost you if you don't do your research. Google what's happening with Airbnb's in Miami at the moment. If you'd like to chat, send me a message! 

And don't forget to include me in the party @Lucas Carl , @Paul Sandhu, @Julie McCoy , @Nancy Bachety

Did they have a signed lease on them already? Even if you intended to turn them into VR, if you had a signed lease, financing them would be easier. If you have a long track record with the banks as an investor, that would also help. Otherwise, it's not the norm. 

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