Short Term Rental Property

[Kayla Utley]

Please advise on this deal:

Off Market single family home: $399,000 

Where: Northern Michigan (2 miles from Boyne Mountain Ski Resort, 5 miles to beaches and tourist town)

Loan Type: conventional, fixed rate, 20% down, 30 year loan

Interest Rate: 8%

Monthly Payment: $2812.18

expenses:

Gas: $1200 ANNUAL

Electric: $1850 ANNUAL

Internet: $768 ANNUAL

Closing Costs: $7784.60

*This is an off market deal with no other offers currently. At $399,000 the numbers do not work. We are estimating we average $4,000/month on rentals. In our area we have around 50% occupancy. Highly sought after area (Boyne City, MI). This is a 3 bed/2bath cabin. It has a detached garage we could make into a game room. It also has another outbuilding we could add bunkbeds and a home gym. Am I severely downplaying what we make per month? 

Any advice on what my top offer should be on these terms would be very helpful. My confidence crashes when having to estimate that monthly income level. 

If you have any advice on how to confidently determine your monthly rental income please share. Thanks 

[Chance House]

Hi Kayla, have you looked at DSCR financing options for this? An 8% rate seems high. Beyond that, 50% occupancy isn't inspiring- are you saying that you expect this property to rent for $4,000/month? Where are you sourcing that estimate?