All Forum Posts by: Hannah Hammond

That property rents for 5k per month in high season. I actually just had a tenant in that property at 2800 per month from May-mid July - we recovered a bit, though, in utilities as during the summer months we generally place a utility cap since the landlord isn't receiving as much in rent and the electric bill in our area is through the roof.

One other note: Typically the properties I represent are rented over a year in advance and often by repeat tenants. I don't represent tenants on the 'buy side' because it is far more work than I am able to handle - at least in my area there is a huge disparity between people looking to rent and properties available. But if you are up for it - list one or two properties on VRBO and when the tenant inquiries come pouring in, fill the properties you have listed and then offer to aid the remaining rental-seekers in finding something for them. Assuming you are an agent and have excellent organizational skills, this is absolutely a great way to make reasonable commissions and also to become an invaluable asset to the landlords and tenants who could just as easily become sellers and buyers in the future :)

Hi Hannah,

I manage several vacation rentals in North Scottsdale. I have found that small single-family homes and condos typically rent the best. Most of my tenants are older couples who wish to retreat to AZ for the Jan-March timeframe so they don't need much space, however they do want enough room that they will not be on top of one another and also to have a spare room in case the kids are able to make it to visit for a week. 

Occupancy is generally very limited to Jan-March, however I have been able to, on occasion, rent properties during other months of the year (although typically it's less 'vacation' and more circumstantial in those cases).

Generally agents refer to the year in 'seasons' - high season, mid season, and low season. For a 2bed, 2bath condo in North Scottsdale I would typically ask 2250 per month during 'low season' (summer), 2750 per month during 'mid season' (November/December and April/May) and the Jan-Mar period would be priced around 3300 per month. I have a 3 bed, 2 bath single family property with a private pool that I am able to rent for 5k per month.

The expectation for those paying the type of prices I've mentioned above is that the properties are expertly furnished (not just furnished as rentals, rather, high-quality upscale permanent furnishings) and they will expect amenities (pools, clubhouses, golf/mountain views, sometimes even maid service, etc). Another factor to consider is that these types of tenants do tend to be a little more high-maintenance (you will be on the receiving end of a call if the coffee pot breaks), but they do take very good care of the properties and you don't ever have to chase them around for rent.

I hope my post is helpful! Let me know if you have any questions for which I might be able to afford some insight!

Hi Hannah, 

I have one studio vacation rental that I've run for five years or so. The maintenance costs are much higher for a vacation rental than a regular rental, since the owner, not tenant, pays all the utilities, internet, yard maintenance and general maintenance. That said, it should net you a bit more net income and a lot less passivity.

Your expenses will affect your returns. Air Bnb and VRBO is popular enough that you should be able to find rental comps for your area. A condo may pose more risks of neighbor complaints than a single family home and CCRs would need to be read to ensure short-term rentals aren't prohibited.

The more you charge, the pickier the guests and the more to budget for regular re-painting, new towels and sheets, etc. Remodeled properties rent for more, but there's certainly a market for budget properties as well. 

Occupancy rent, rates, etc will vary by area. I charge more for short-term than for multi-month, but a 50% vacancy would be safe to budget in my scenario.

Pets will be a frequent request, so you'll need a policy. Our studio has no yard, so we don't do pets, or incur that exterior maintenance cost. We tend to make an exception for long term rentals (one to three months, which we accept during the off-season). 

In summary, this is by no means a passive endeavor - it nets a little more money and a lot more effort. There also are management companies that will handle it as well for a 25% - 35% fee. 

I recommend being clear about what you include and what you exclude, and having multiple cleaners you can call to help with turnovers, and putting all mattresses in moisture and bug-proof mattress bags.

Good luck!

Stacy

Hannah -

I am in Orlando, home of Disney World and a very large vacation rental market.  I am going to attempt to answer your questions based on what I witness here.

1) As a general statement, single family homes yield better than condos due to they offer more amenities and can garner a higher nightly rate.

2) This is a tough one to answer because there are so many variables.  Regarding the number of bedrooms that have the highest occupancy rate, I don't think that can be answered.  The homes that offer the best amenities in the best locations achieve the highest occupancy rates regardless of the number of bedrooms.  Regarding the highest returns, generally speaking the larger homes with a greater number of bedrooms yield the best returns because they bring higher rental rates and their costs are not significantly higher than smaller homes with less bedrooms.

3) Peak seasons here are the holidays - Thanksgiving, Christmas, and Easter - and the summer months of June, July and August.  Occupancy rates during those times are 80-90% and even higher.

4) There are thousands of vacation rentals here, and I have not seen an average occupancy for all of them.  I know there are a number of homes that don't do better than 50%.  There are also homes that do 67% up to 90%.  As stated above, location and the homes themselves are the two most important factors that will determine the occupancy rate.

5) This is the easiest question to answer. Definitely remodeled vacation rentals have higher occupancy rates, higher nightly rates and thus greater ROI. Most vacationers go to HomeAway/VRBO, FlipKey and the other rental listing websites to find vacation homes to rent. They base a lot of their decisions on the photos they see of each home. I have seen over and over people will pay more per night for a vacation home that is new or newly remodeled than they will for an outdated vacation home. When I guide an investor in purchasing a resale vacation rental here, I make sure that the investor has enough cash to pay for all needed renovations.

I hope this helps you.  Feel free to contact me directly if I you have any other questions.  

Good luck,

Keith

Hi everyone! My name is Nehemias and I am writing from Tempe, AZ where it was a scorching 115 degrees today! I am new to the BP forums and new to real estate investing as well. I have had a bit of semi-accidental real estate success. By that I mean that I have always been interested in real estate as means of enhancing income. So over the last 18 years I made a little (a very little) study of it. Six years ago, with enough information to be dangerous, we rented out a home that we could not sell in order to upgrade our primary residence. Our first and only tenant has been trouble free and we have been able to build some equity and cash flow a little as well! 

I am here now to take the next step down the path of real estate investing. I am interested in buy and hold single and multifamily investing. My hope is that I can build a portfolio that will allow me to retire from my day job much sooner than expected. I am also very much interested in modeling for my children how to use real estate as a means to building financial security. Thank you everyone for all the great posts and articles. I am excited to join this community and begin a more purposeful career of real estate investing! 

-NehemiasP

@Hannah Hammond I did short term renting in San Diego (airbnb) and it was great. There was great demand almost year round (November and December were the slowest months) and the rates are very favorable for the owners. HOWEVER, nearly every condo association in San Diego restricts short term renting, especially if its less than 30 days. In downtown, the HOAs will actively search for airbnb listings in their buildings and fine the owners that violate the rules. 

The SFR is a better way to go but, like others mentioned, you have to look out for some communities that are relentlessly trying to restrict short term renting or already have restricted it. Good luck

@Hannah Hammond Congrats on your decision! I recommend the San Diego area for the following reasons: 

The beach cities (Oceanside, Carlsbad, Encinitas, all the way down to Mission Bay area) are great if you want a single family. If you're looking for a condo, then Oceanside and the complex North Coast Village would be a good place to start. This particular oceanfront complex is in demand with renters because it's within 1 hr to LA (Disneyland/Anaheim) and 35 min to downtown San Diego attractions (Seaworld, Zoo etc). Families seek out the complex for well appointed rentals that are affordable. The complex is also very family friendly (pools, spas, gym, putting green, rec room, gated security and parking...). These are all currently approved for short term renting. 

I'm in Orlando but I have a great property management/Real estate (vacation rental specialist) in that area that I would be happy to connect you with. Just DM if you'd like more details and of course, best of luck in this new endeavor!! 

.@Hannah Hammond some areas are starting to restrict short term rentals via legislation.  Before you purchase try to determine that this is not going to occur in your area.  It has mostly been a north county San Diego coastal legislative action so far.  

The family has 2 units of short term rentals in Mission Beach.  Our property management has been sold a couple of times in the last few years.  I would have recommended the initial property management company but jury is still out on the current. 

I personally think that the desired short term rental areas in San Diego have high entry points and that they need to have solid appreciation to be competitive with other investment options.  Therefore I suggest purchasing in the area you like and would enjoy staying at yourself.  I thought the family's units qualified but no one in family uses them anymore (long story). 

Good luck