Updated over 9 years ago on . Most recent reply
Vacation Rentals
Hey all looking for any advice. I am 25 and looking at buying vacation rentals, especially in the Pensacola area. Because of my generation I cannot rely on 401K for my retirement. Unfortunately most VR require 20% and it is hard to come up with. I do not own a house currently so what I am asking is how do I get started in this business and what is the logical decision for me for long-term and acquiring multiple condos possibly. Any advice or guidance would be appreciated.
Most Popular Reply
@Cory Capps I applaud your desire to take more control over your financial future.
VRs are an interesting niche. The income is pretty easy to forecast based on the comps on VRBO/AirBNB. Check the rates and watch your competition's calendar to get an idea for the gross income. Expenses are a little different, but still forecastable. I did a lengthy post about VR expenses about a year ago that could give you some insight.
One of your biggest expenses are HOA fees. They will eat you alive in the condo arena. I would personally shift your strategy from multiple condos to a smaller number of well-located single family's. Another condo detraction is that repeat guests will feel loyalty to the condo community - but not your unit.
You've also got to watch your management fees. 100% management (20% of gross), 80/20 loan, and high HOA fees will be a break even cash-flow environment at best.
PM or call me if you want more info