Newbie looking to buy a vacation rental in WA

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Newbie looking to buy a vacation rental in WA

Michael Molnar
Bellevue, WA · Member since 2014 · 6 posts · 2 votes

Hi there! I just found this site while researching how to get started in real estate investing. I'm not a total newbie, I guess, since I do own a rental house (I moved two years ago and since the market made it a great time to buy, but terrible to sell, I became a landlord).

So my wife and I are in the early stages of looking for a vacation property. We are also in talks with my BIL and SIL to go in on it with them (they also own a rental). We want something for personal use, but also intend to rent it out when we are not using it.

Being in the Seattle area, we have a huge array of options within a 4 hour drive. We could get something on the ocean beach or in a coastal town, along the Puget Sound or San Juan Islands, on a secluded lake, in a resort lake town, in the mountains, out in the woods, something in wine country, somewhere in sunny Eastern Washington. . . we could buy an existing home or a large piece of land and build a cabin (or three); the possibilities seem endless right now, which is causing my head to spin.

I am very much looking forward to starting on this journey and learning from, and contributing to this site.

-Michael

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Tiffany Plovie
Bellevue, WA · Member since 2014 · 183 posts · 86 votes
12y

@Michael Molnar Welcome to BP! I am also located in Bellevue. It is always good to see a neighbor on the board!

Wow! You have a wonderful array of choices at your fingertips! In order to help you, I would need to know a little bit more about your current situation. What are your numbers? Just give me a ball-park range and I will see what I can come up with.

As an agent focused on investment, I have sold homes in many different areas, for many different purposes. Ideally, you would want to buy a home in an area that will appreciate well over time. Look for properties that have differentiating features and a location that is hard to replicate.

As an example, Suncadia is a wonderful resort. I love to visit there as they allow my (very large) dog, have a good restaurant, easy access to hiking trails and a golf course. However, I would caution anyone from buying there, as so many similar properties are springing up nearby. Eventually, one development will end up being the newer version of Suncadia- leaving the original buyers holding a property that will not be able to maintain high rental rates.

In comparison, Lake Chelan is different, because the topography of the area limits development.

Also, a warning about the San Jaun's... They have an additional 1% tax that is added to all real estate purchases. It goes into the San Jaun Preservation Trust to preserve the natural lands of the islands.

What areas appeal to you the most?

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  • Tiffany Plovie
    Bellevue, WA · Member since 2014 · 183 posts · 86 votes
    12y

    @Michael Molnar Welcome to BP! I am also located in Bellevue. It is always good to see a neighbor on the board!

    Wow! You have a wonderful array of choices at your fingertips! In order to help you, I would need to know a little bit more about your current situation. What are your numbers? Just give me a ball-park range and I will see what I can come up with.

    As an agent focused on investment, I have sold homes in many different areas, for many different purposes. Ideally, you would want to buy a home in an area that will appreciate well over time. Look for properties that have differentiating features and a location that is hard to replicate.

    As an example, Suncadia is a wonderful resort. I love to visit there as they allow my (very large) dog, have a good restaurant, easy access to hiking trails and a golf course. However, I would caution anyone from buying there, as so many similar properties are springing up nearby. Eventually, one development will end up being the newer version of Suncadia- leaving the original buyers holding a property that will not be able to maintain high rental rates.

    In comparison, Lake Chelan is different, because the topography of the area limits development.

    Also, a warning about the San Jaun's... They have an additional 1% tax that is added to all real estate purchases. It goes into the San Jaun Preservation Trust to preserve the natural lands of the islands.

    What areas appeal to you the most?

    1Reply
  • Account Closed
    Rental Property Investor · Everett, WA · Member since 2013 · 389 posts · 222 votes
    12y

    @Michael Molnar Have you listened to the Biggerpockets podcasts? There was agreat one around show 50 that was exclusively about vacation rentals. I highly recommend you check it out!

    1Reply
  • Joe Fairless
    Investor · Cincinnati, OH · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    @Michael Molnar welcome to BP and I'm a huge fan of Bellevue. I used to go there once a month to meet with the MSN and Bing people. Good luck with the vacation rental!

    0Reply
  • Andrew Kniffin
    Investor · Seattle, WA · Member since 2013 · 123 posts · 48 votes
    12y

    Consider places that are in demand year-round. Some areas are seasonal: high demand in winter, and low demand in summer. Others are desirable year-round, though.

    To verify whether a home is in one of these types, head over to VRBO and look at rentals in that area, and what the availability of each place is. VRBO can also provide you an idea of what rates you can get on a X-sized property in Y-location.

    0Reply
  • Michael Molnar
    OP
    Bellevue, WA · Member since 2014 · 6 posts · 2 votes
    12y

    @Account Closed

    0Reply
  • Michael Molnar
    OP
    Bellevue, WA · Member since 2014 · 6 posts · 2 votes
    12y

    @Tiffany Plovie

    We are still in the very early stages of due diligence right now. I am working with my wife and BIL/SIL to figure out what it is we all want to focus on, whether it be coast, lakefront, mountains, wine country, etc. We're going to sit down over dinner on Saturday to discuss. We most likely would not buy in an established resort like Suncadia.

    In any case, I don't see us actually making a purchase for at least a year, but probably more like 2-3 years.

    As for numbers, that really depends on whether we buy an existing home, or land on which to build.

    0Reply
  • Michele FischerPro Member
    Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    Sounds to me that several scouting trips staying in vacation rentals to find an area and get a sense for the competition would be fun research.

    Podcast Guest on Show #79
    0Reply
  • Angelique TinneyPro Member
    Rental Property Investor · Bellevue, WA · Member since 2014 · 611 posts · 70 votes
    12y

    Lake Chelan!

    1Reply
  • J. MartinPro Member
    Rental Property Investor · Oakland, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y

    Welcome Michael. There are a lot of super helpful people and great advice on this site! I'm a 'fix and hold' investor from the Bay Area in CA, and loving it! A lot of others doing flips, wholesaling, notes, everything. A few tips.


    You can tag people by typing @ before you type their name, then clicking their name when it pops up at the bottom of the message box. You can click on the 'vote' button if you like someone's post or is helpful, and there are 'awards' to earn on your profile. The "Learn" link across the top navigation bar has lots of great info, and most importantly, the BP members! Welcome to BP, and good luck on your investments!

    0Reply
  • Gerald K.
    Real Estate Investor · Kirkland, WA · Member since 2012 · 480 posts · 116 votes
    12y

    @Michael Molnar 

    Welcome to BP. We're up in Kirkland. Sounds like you have a neat idea in partnering with others on a vacation rental - use it when you want, rent it out the rest of the time.

    You could probably find a lot of info on that topic by searching (upper right hand corner along the blue bar in the [Search the site] field ) .  Also, check out the "Learn" section up top along the blue bar. Tons of great info for investing.

    See you around the forums.

    0Reply
  • Brandon TurnerPro Member
    Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes
    12y

    Hey @Michael Molnar welcome! Definitely start jumping into the community here! Be sure to read through The Ultimate Beginner's Guide to Real Estate Investing to help you get started.

    Finally -be sure to setup some keyword alerts - especially for "Bellevue" so you can jump into local conversations.

    See you around the forums!

    Podcast Guest on Show #92
    0Reply
  • Scott Demots
    Milwaukee, WI · Member since 2013 · 192 posts · 13 votes
    12y

    Hi welcome to BP! The help community here can definitely you navigate the REI waters. Search around and ask questions as needed. The information I've got from fellow members has been invaluable.

    See you around the sight!

    0Reply
  • Johnson H.Pro Member
    Investor · San Francisco, CA · Member since 2010 · 910 posts · 889 votes
    12y

    Hi Michael, welcome to BP! I own a vacation rental in Las Vegas and list it on AirBnB. For a long time I have been looking into Lake Tahoe as well. The best advice I can give you is to try to narrow the area you want to buy a vacation home in and get on VBRO and AirBnB and see how much others are listing their homes for. That will give you a good indication on where you should be pricing your future vacation home rental. Also, take a look at the calendars of these homes listed so that you can get a rough sense on what the demand is for the area. Depending on the area, some people like large party homes with 6+ bedrooms and other areas all you may need is a 3/2 home. Some people like the cabin feel, some want a party home with a pool and BBQ grill, it all just depends on the vacation location and what your future renters will want. Good luck in your search! 

    1Reply
  • Steve Dove
    Investor · Clarkston, MI · Member since 2009 · 72 posts · 48 votes
    12y

    @Michael Molnar , just curious? Why go in with relatives? For the capital?

    I just closed on my 3rd vacation rental, this past Monday, and have been diligently working to get things ready for this summer. I should be wrapping things up by Sunday. My other two places are booked solid, and I'm hoping that this one will follow suit. I actually bought my second vacation home in 2009, which was a foreclosure. It was a lakefront home, in terrible shape. I ended up basically knocking it down and rebuilding it. It is now my showcase property, and I have had many return guests since then. What I was quickly reminded of, this week, is how much it actually costs to get things "vacation rental" ready. Aside from the downpayment for the property, make sure that you have budgeted for all of the furnishings that will be needed before you can book your first guests, i.e. beds, sheets, pillows, furniture, TV(s), kitchen utensils, vacuum, BBQ grill, picnic table, appliances, etc. It's amazing how many things are needed for a vacation rental property.

    Make sure that you also follow the rules with owning a vacation rental. The common misconception, is that you can just use the property and rent it while you are not there. Theoretically, that is true, but the IRS would disagree. Your stay at your own homes, is essentially income, and "should" be reported as your property is operating as a business. Your state may also require you to register for, collect and pay Use Tax.

    I look forward to hearing about your adventure. It can be a lot of work, but it is also rewarding and has many benefits.

    0Reply
  • Ryland Taniguchi
    San Francisco, CA · Member since 2015 · 786 posts · 717 votes
    11y
    Originally posted by @Michael Molnar:

    Hi there! I just found this site while researching how to get started in real estate investing. I'm not a total newbie, I guess, since I do own a rental house (I moved two years ago and since the market made it a great time to buy, but terrible to sell, I became a landlord).

    So my wife and I are in the early stages of looking for a vacation property. We are also in talks with my BIL and SIL to go in on it with them (they also own a rental). We want something for personal use, but also intend to rent it out when we are not using it.

    Being in the Seattle area, we have a huge array of options within a 4 hour drive. We could get something on the ocean beach or in a coastal town, along the Puget Sound or San Juan Islands, on a secluded lake, in a resort lake town, in the mountains, out in the woods, something in wine country, somewhere in sunny Eastern Washington. . . we could buy an existing home or a large piece of land and build a cabin (or three); the possibilities seem endless right now, which is causing my head to spin.

    I am very much looking forward to starting on this journey and learning from, and contributing to this site.

    -Michael

     Message me and I can connect you with a great resource that manages and finds vacation rentals locally here in Seattle.

    0Reply
  • Yinan Q.
    Engineering Consultant, Investor · Seattle, WA · Member since 2013 · 213 posts · 61 votes
    11y

    @Michael Molnar, welcome to BP! It's great to see another local investor on the BP community. You've got quite some insightful suggestions. Keep asking questions you will be surprised how quickly you can get them answered here!

    0Reply
  • Mark Nolan
    Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
    11y

    @Michael Molnar

    Welcome to Bigger Pockets

    0Reply
  • Zach Schwarzmiller
    Investor · Snohomish, WA · Member since 2013 · 629 posts · 84 votes
    11y

    I do vacation rentals in Snohomish County and have made a ton of money. They are management intensive though - I do most all of it myself as I am a control freak and really care about my perfect review but it comes with a cost to my time. I would just suggest you can pencil a regular rental if your buying something as a contingency plan.

    0Reply
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