Real estate investing in vacation rentals

[Damion Byros]

Hello everyone on bp I Need everyone's opinion on owning vacation rentals and collecting daily rents . Is it profitable , worth it , and a good investment please explain thanks a lot

[Tanner Bruce]

@Damion Byros I agree with both Lucian and Russell. There are numerous factors involved that can make a vacation property a good or poor investment.

The main three are probably location, supply, and occupancy. Finding an equilibrium between those is the key. For instance, Kissimmee, FL is in a great location and has a consistent occupancy rate (constantly traveled to year round), but is saturated in terms of supply. There's a virtually limitless amount of single family vacation homes there which drives rates way down.

In contrast, a property on a ski resort generally has a good location and relatively low supply but the occupancy isn't consistent throughout the year. Properties there are usually able to rent out extremely well during the 100 ski-season nights but are typically hit or miss the remaining 265 days of the year.

I have a Rental Grader tool that projects the revenue a property can make based on its location and size. Feel free to PM me if you'd like a link to it.