Looking to buy my first Vacation Rental property.

20 Replies

Hello BP family. I am currently overseas working with the US Military. I am very much interested in buying my 1st Rental property in the Orlando/Disney World area. I contacted a Veterans Affairs loan officer to get the ball rolling and everything turned out to be good for a loan approval. The VA rep asked if I would be the Primary permanent resident and I said no, I'd be using it as an income property. He then told me he couldn't approve my loan because I would need to be in the States and I would need to occupy the home. I'm new to all of this and didn't really know how to argue the point....but I find this a bit confusing. Any advice will be Greatly Appreciated!

You can't use government mortgage loans to finance a short term rental. If you're using such a lian to buy a place, you're supposed to occupy it. There can be severe consequences if you ignore these.

you're going to need either an investment or a commercial loan.

So as already stated this is a very different kind of loan. You are likely going to need 20% to put down on an investment property.

@Ellis Brown

You can use your VA to purchase up to 4 units, while living in one of the units. There is still potential in the future for you to use your VA to also get income on a property while lining in it.

A single family rental property you can purchase with 15% - 20% down and a multi-family for 25% on an investment property. 

@Brenda Whittaker , this has got to be a troll. Right? I am not sure you know what you are taking about.

Vacation rentals make up a tiny portion of the investment market. Regular long term rentals are by far the bigger part. By a huge margin.

Most vacation homes are where people go to vacation. For example in your area, Scottsdale seems to be popular. Are there lots of low cost rentals in Scottsdale?

Where my home is, there is no shortage of housing for both low and middle class incomes.

You need to spend some time educating yourself before spouting off your socialist rhetoric.



Updated about 1 year ago

The majority of homeless are there due to drug addiction and mental illness with a small portion who just don’t want to live like the rest of society. I live near Seattle and it is a real problem.

@Brenda Whittaker   @Michael Baum is correct.  If your friends can't afford housing because it's too expensive, send them to live in my town.  Coffeyville Kansas, $9500 will buy a person a 3BR with CH/A in a decent neighborhood.

If they can do a trade like welding, pipefitting or electrical work; there are plenty of job opportunities at the local refinery.

For long term rental...

Originally posted by @Jerry Padilla :

@Ellis Brown

You can use your VA to purchase up to 4 units, while living in one of the units. There is still potential in the future for you to use your VA to also get income on a property while lining in it.

A single family rental property you can purchase with 15% - 20% down and a multi-family for 25% on an investment property. 

 

Are you kidding me? Seattle! $600K for a single family home!! That is not a drug problem, that is a greed problem. The people I have taken in who cannot buy or rent are not on drugs, they are handy tradesmen who go to work every day, one is a store manager, one is a tile setter, one is an electrician, etc. How does no one see this as a problem? How does no one realize that 600,000 people EACH YEAR are mass exiting CA now because of the China takeover? How is this ok? Real estate is only one of the victims of this. I dont know what Baum meant by "socialist" but when a roof over someones head is out of reach for working people, you are way out of line by insulting the person trying to help. How many have you got on your couch? How dare you pin a political title on me, Im nothing political, I am compassionate and serving the public more than you ever will. All I want is to see low and moderate income human beings under a stinking roof. And if that deserves your insults, you are selfish and cold. It doesn't take more education to open your eyes and look around and see that people are suffering. But it's ok as long as you got your Mercedes and your Jacuzzi, right? Who cares about anyone else.

Listen @Brenda Whittaker , I am not trying to attack you. What I am saying is that vacation rentals do not impact the overall availability of long term rentals in MOST areas. There have been some studies done in high vacation traveled areas such as Sonoma and Napa. There, STR's do impact the availability for rentals, but the average monthly rate is quite high there so I doubt we are talking about the same folks.

As far as trying to help, you offered no help in your first comment. All you did was come in, say how terrible we all are and that we should be ashamed of ourselves and that the government should get involved and make all short term rentals illegal. Pretty much the same comments you just said. Personally attacking us for investing the way we do.

I am sure you have lots of working homeless folks at your home all the time living rent free. That is great that you do that.

Your ideas are in the socialist arena. When something is going on in the free market that you don't like, you want the government to restrict it or eliminate it all together. That is how socialists and communists do things. Put the government in charge and get rid of free market ideas and work. You might not feel political, but your comments are.

Everyone has the right to live anywhere they want, but they don't have the right to set the price they want to pay. A thing is worth what people are willing to pay for it. If a real estate market is hot, then the price goes up. It will knock some folks out of that market and they will have to seek accommodations elsewhere. What you want is the government to set the prices and that is wrong. Period.

The average home price in Seattle is currently around $750k. It is finally leveling out and dropping slightly. I can't afford to live there. I live 70 miles away. The median home price here in Olympia is $322k. Electricians and other skilled people make $40-$60 per hour here. They can easily afford a home in many areas, if not in the trendy areas of Seattle. You are off base as far as I can tell.

I don't own a Mercedes or a Jacuzzi. I have a decent home in a nice neighborhood. I am not rich by any standard. I see the issues and the people living on the street, but when the city goes and cleans up a drug infested, child sex traffic, danger to society camp with 100 people living there, the social workers are there offering all the things people need to get off the street. Do you know how many took the offer? 9. That's right, 9 out of 100. That happened earlier this year in Seattle. They set fire to a bunch of trash damaging a major freeway overpass. It has to be done. You can offer all the services in the world, but if they can't won't take them, you can't force them. I suppose that you would force people to take the services. Forget personal freedom of choice.

The bottom line is that the  more desirable the place is to live, the more expensive it will be. If you are a lower income person, you will have to find places to live that are less expensive. That is the way it works. If you need a shirt, you buy a 5 dollar shirt. You don't whine about the inequities of life and expect someone to hand you a 100 dollar shirt. You want a better life, make better decisions. Knuckle down and make positive changes. It can be done, people do it all the time.

How is trying to help working people have a roof over their head "obnoxious"?  How is being upset over high prices and homelessness "obnoxious"?  How are the compassionate abused while the heartless thrive?  How is this possible?  This is not a world I am interested in.  This is pure evil. 

@Micheal Baum  I am not low income and I do own my own home, I am fine. I am not whining for myself, I am not that selfish. I am upset that so may working people in my area are living in tents.  I do not want government to take over anything, I have actually considered sovereignty and expat status because I am anti-government.  I do not believe in control.  I believe in all people having shelter, that's all. But I would like to see vacation rentals be banned in residential areas like any other business, they are operating businesses in residential areas and my local city counsel told me state legislators were paid by air b n b to keep silent and tie their hands.  City told me this directly and they said they hate it too.  In my area people are homeless because there are not enough places to rent due to all the vacation rentals. I bring them in to have a shower or a night on my couch if they need it because I care.  How am I the bad guy here?  Its amazing how in this world compassion is attacked.  No one sees the human suffering and damages caused by what they are doing, they all hide their heads in sand and figure those who are living outside must deserve to.  I cant be that heartless, so I am the one everyone is against?   They even call me obnoxious because human suffering bothers me.  Unbelievable. 

@Brenda Whittaker  
You say you're an investor in Seattle, but your sig says Cottonwood AZ. If you are so concerned, why aren't you investing in houses and renting out rooms to the workers so they can afford to live there?

This is a forum for investors.  You are a troll, trying to start trouble and criticizing anyone who invests in STRs, the exact opposite of what this forum is for.  You do not belong here. 

I never said I was an investor in Seattle. I said Seattle's prices are insane. i DO rent out my extra bedroom where I live so they can afford to live where I do.  I am a former investor still interested in what's going on with markets, I don't know what a "troll" is.  I am just someone who cant understand why when someone like me has compassion, we get called names.  You all have called me everything from ignorant to nuts to "troll", just because I don't like how vacation rentals put working people on the streets.  You are the nutty ones.  And you Kormylo, have no right to tell me where I do and do not belong.  Has someone made you a God?  Mind your own business. 

What part of get lost do you not understand?

Originally posted by @Brenda Whittaker :

@Lauren Kormylo Hard to believe you think you can tell me where I belong, that behavior should have left you way way back in high school.  I don't know what a troll is but I do recognize an inflated ego. Vacation rentals hurt local workers where I live, that does not make me a troll.  But calling me names does make you something.  I hope you are very unhappy with who you are. 

 

What part of get lost do you not understand?

reported her to the Forum as an idiot to be banned.

Originally posted by @Brenda Whittaker :

@Lauren Kormylo Hard to believe you think you can tell me where I belong, that behavior should have left you way way back in high school.  I don't know what a troll is but I do recognize an inflated ego. Vacation rentals hurt local workers where I live, that does not make me a troll.  But calling me names does make you something.  I hope you are very unhappy with who you are.