Vacation Rentals

[Keith Schulz]

Does anyone own any vacation rental properties?

I live in southern wisconsin, and I'd like to buy a small cottage on a lake in norther WI. A lot of people from the Madison, Chicago, and Milwaukee areas use northern wisconsin as their weekend getaways.

In any case, I've been thinking about buying a property that I could use on weekends that I wanted to, and also use as a vaction rental when I'm not there.

So, I'd like to hear from anybody that has done something similar. Has your experience been good, or bad? Do you cashflow at all?

Thanks

[Account Closed]

Three comments.

1. Most people who buy vacation homes and rent them got there thinking like you are doing. They want a place for them and then they hope to make a bit of money renting the place.

Translation, many properties will never cash flow based on the rental income. Too many people who are thinking second home plus a bit of income so the values are too high.

2. I have vacation property but not where you are thinking. In my case the numbers worked better than I am implying in #1. I have looked at Spain and a few other places where the market is mostly 2nd homes so my deal was more an exception than the norm.

3. There is a wildly successful mailing list for vacation rentals (VR). A very large group of people who own and operate their own VRs for a profit. Mostly people who buy a place to rent by the week or weekend as a full time business. They might have a day job or they might not. These are not people who are thinking a 2nd home with the odd weekend rented. The list has something like 3000 members and there are 60 to 100 posts a day. The list is hosted on the groups area of Yahoo.

Go to the groups main page on Yahoo. Then search for vacation rentals.

Be prepared to get a lot of emails. You can read as a daily digest or on the website. There is very active discussions on handling reservations, screening, taking credit card payments, handling foreign reservations, gift baskets, how to manage the locks (high turnover so keys are a problem), cleaning and maintenance ideas, etc.

WARNING: The list is mostly about the operational aspects of a VR business. Most of the people are not RE investors. They are investing in a business that happens to have a physical plant (the property being rented). They generally do not discuss financing and other REI topics. Hence the group is complementary to BP and others. Similar to a site that only talked about property management for rental home owners.

John Corey