Vacation Rental In the OC

2 Replies

Hello BiggerPockets family, my name is Jorge and I am new to biggerpockets. I am looking at a vacation rental investment; however, I am new to real estate investing (only one rental) and definitely new to vacation rentals. Currently it is listed on VRBO, AirBnB and other such sites. Seller "says" they will work with me to carry on the business. Anyone has some tips on researching rental potential? The home is around the $500k price so a mistake here will hurt a bit. All feedback and comments welcomed.

Thanks!

Jorge

SoCal Real Estate Investor

Hi @Jorge Barboza Jr. Welcome to BP. I'll let other experienced investors weigh in on how they analyze deals. But a few initial thoughts of mine. I'm assuming this is a house? When you say "Seller 'says' they will work with me to carry on the business," do you mean that they will help manage the vacation rental after you purchase it? 

With city Airbnb laws in flux, I'd want to run the numbers as if the house were going to be a long-term rental. If it makes sense with those numbers, then maybe you buy it, you rent it on Airbnb, and then if city regulations change, you'd still have the cushion to turn it into a long-term rental and cash flow.

Hey James, thanks for reaching out and providing feedback. I really appreciate that you are willing to take time out of your day to help me out. With regard to your comment, yes it is a home, and yes they will work with me to be the property manager. The home will roughly break even with the mortgage if I put a long term rental. So I do have two exit strategies to keep me somewhat safe.

Thanks again James!

Jorge

SoCal Real Estate Investor

(Who loves Frito Lay chips)

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here