Updated about 10 years ago on . Most recent reply
$1mil vacation rental analysis
I'm considering buying another large vacation rental in the Palm Springs area. I'm curious, would you do this deal? These are the ballpark numbers:
-8 bed 6 bath house on 1 acre, pool, nice grounds, etc. Requires little/no rehab.
-$1mil purchase price. 20% down. $50k furnishing (some included with sale) = ~$270k cash outlay including closing costs.
-PITI+maintenance+capex= ~$9k per month.
-After 6 months building some reputation, the property should gross $200k per year in vacation rents, or ~$16k per month. After property management fees, $13k per month.
-Net operating income $4k per month, or ~$48k per year.
-That equates to 18% cash-on-cash returns.
Thoughts? I feel confident these numbers are +/- 20%.