AirB&B vacation rental using USDA loan. Advice or experiences?

Question

I would like to purchase a vacation rental using USDA loan. Any advice or experiences?

Lauren Havens · Answer

I'm not very well versed on USDA loans, so I thought I'd throw out this idea. @Dawn Brenengen could you purchase a multi-family property, live in a unit and vacation rental the other(s) on a USDA loan? Just trying to throw out some creative ideas for you @Eldon Hongo . Might not work depending on where you want to live and such.

Eldon Hongo · Answer

@Dawn Brenengen

Greetings Dawn! Hope all is well. It took a few days to obtain info from the usda office because of government shutdown. I talked to them today and you are completely correct that I can’t get a loan for purchasing a rental property through them. In Brandon Turner’s book “Investing in RE w/no or low money down” he indicates that the usda offers a loan w/10% down for non owner occupied property.

Oh well. I just have to go another way. Thanks for your correspondence and Aloha, Eldon HONGO

Dawn Brenengen · Answer

@Eldon Hongo

USDA loans are for primary residences only, so it will not work for a vacation rental

Dawn Brenengen · Answer

@Lauren Havens  I'm not an expert, but I'm pretty sure the house can not involve an investment component at all and qualify for USDA.

Eldon Hongo · Answer

Greetings Dawn! Thanks for your professional response. I need to keep trying with everyone’s help. Aloha, Eldon

Eldon Hongo · Answer

Thanks for your advice! I’ll check that area’s market potential through AirB&B and other local contacts and sources

Kris Bolzniak · Answer

We had setup a very high quality Airbnb unit in a popular vacation destination in Samoa. Two months went by, with not a single possible. Someone finally responded, asked some questions, the fell through. Check to see on Airbnb in your chosen area to see if there's a high level of demand, and if there are already too many other units in the area. It can be easy to overestimate your future earnings.

AirB&B vacation rental using USDA loan. Advice or experiences?

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