Vacation/short term rentals

Short-Term & Vacation Rental Discussions
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Vacation/short term rentals

Tommy Kerwick Jr.
Rental Property Investor · Florham Park, NJ · Member since 2019 · 16 posts · 2 votes

Hey BP fam!

Where do you own vacation rentals? Where are you seeing growth/popularity/profits/success with Air BnB or VRBO?

Interested to know where people are purchasing where they feel they're receiving great ROI! I own 2. The Jersey Shore (1 block from the beach) and Stratton Mountain (about 3 streets off the base of the mountain).

Share your story!

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Eric P.
New York City, NY · Member since 2016 · 470 posts · 348 votes
7y




From https://www.airdna.co/blog/best-places-to-buy-a-vacation-rental-home-2018:

The y-axis is profits & the x-axis is property cost. You want to maximize profits & minimize cost so the sweet spot is the upper left of the graph. If you hover over the bubbles in the upper left you’ll see that they’re almost all in Tennessee & Florida.

Which makes sense bc, no matter how great other parts of the US may seem, your ROI drops sharply if there's even a small sliver of the year that's off-season. TN & FL are the sweet spot where weather is nice year-round & properties aren't too expensive (as they are in California & Hawaii). If you don't like TN & FL, your next best options are the neighboring states.

If you wanna invest elsewhere bc you want to use your vacation home personally, that’s one thing. But for pure ROI, you can’t refute the data.

There really is no magical formula here: inexpensive properties + year-round bookings = highest profits

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  • Tommy Kerwick Jr.
    OP
    Rental Property Investor · Florham Park, NJ · Member since 2019 · 16 posts · 2 votes
    7y

    Hey @Ryan Swan,thanks for the info and input. I sent you a direct message. Would like to dig a bit deeper into the Scottsdale market and discuss future plans. Thanks. 

    0Reply
  • Tommy Kerwick Jr.
    OP
    Rental Property Investor · Florham Park, NJ · Member since 2019 · 16 posts · 2 votes
    7y

    Thanks @Eric P. for the graph and for your input. It all makes sense. Buying in more affordable areas that will give you the most year round. Naturally I am looking to expand my STR portfolio while simultaneously creating one with multi-family, out of state. Would be interested in talking with you since your goals seem to be similar.

    0Reply
  • Account Closed
    Member since 2019 · 5 posts · 0 votes
    7y

    Hi everyone

    I am starting out as well..

    What do you all think about the Ohio area? I was looking into Akron or Cleveland.

    What about the more popular areas in Tennesse like Sevierville or Gatlinburg. You think it is too late to enter that market??

    Thank you!! Appreciate the assistance.

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    7y

    @Account Closed You should check out Columbus, OH. My buddy has various STRs in the area and is killing it.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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  • George MevawalaBusiness Member
    Real Estate Agent · Scottsdale, AZ · Member since 2017 · 116 posts · 102 votes
    7y

    @Tommy Kerwick Jr. I have a diverse fleet of 23+ units in the Phoenix market, mostly in Scottsdale. We do very well out here ( being one of the top STR markets in the nation). I average 25% + annual cash on cash returns and on avg 89% occupancy. Feel free to reach out for any additonal information!

    1Reply
  • John D.
    Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
    7y

    @Bob Smith if you spend $650k on a nicer house with a pool in Scottsdale and gross $100k, you are going to bring very little to the bottom line after property management, mortgage, str insurance, landscaping and pool service, upkeep and maintenance on a nicer home with a pool and grounds, capex, furnishing replacement, etc.  For nicer homes with pools, most of the folks I know are looking for a minimum of 20% of property value, in gross annual rents (so on a $650k purchase they would need a minimum of $130k gross annual rents/revenues to even consider the property).

    0Reply
  • John Walder
    Member since 2018 · 4 posts · 2 votes
    7y

    @Tommy Kerwick Jr. we own a home in Ocean City, NJ that we purchased three years ago and rent out during the prime season. It's a twin on the north end of the island called the Gardens which is where many of the $1M+ houses are located. It was very outdated, had no heating/cooling and we probably went overboard with upgrades... but it was 5br's which we saw being appealing to multi-family vacationers. So far so good..we actually profit and still have access to the home in the offseason. VRBO gauges us with fees however and the unpredictable NJ shore tax is very concerning. We are debating whether to continue to invest in NJ shore property where we "know" the market or go with LTRs closer to home back in PA. Hope that helps... 

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  • Melissa Romano
    Real Estate Agent · Scottsdale, AZ · Member since 2017 · 32 posts · 30 votes
    7y

    Fellow Scottsdale owner here. I've gotten 3 one bedroom condos up & running and see about $35-40k in rental income each year per unit. To me, it hasn't made sense to move up to single family homes for Airbnb/VRBO since I haven't paid more than $150k for any condo. Plus, I find it easier to place a mid-term length tenant over the summer in a one-bedroom condo. I've been self-managing for 2 years and have automated many of my messages/processes but just hired an assistant to essentially be on call if guests need anything so that I don't need to stay connected to my phone this vacation season. I'm excited for this upcoming season-- many couples come to Scottsdale every year for vacation and will book my rentals over and over again and can earn $6-9k in Feb/March alone with minimal work as many guests like to come for 2-4+ weeks. Happy to share insights with anyone considering! 

    3Reply
  • George MevawalaBusiness Member
    Real Estate Agent · Scottsdale, AZ · Member since 2017 · 116 posts · 102 votes
    7y

    @Melissa Romano amen! I love the one bedroom play. They perform like champs.

    0Reply
  • Brad Polvorosa
    Developer · Oakland, CA · Member since 2011 · 13 posts · 2 votes
    6y

    Thanks everyone for sharing experiences and insights.

    @Rhonda Blue if I read you post correctly you have exited the St. George market... would you mind sharing your experience.

    Cheers,

    Brad.

    0Reply
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