Vacation Rental Advice

[David Lowe]

I have owned student rentals, game-day rentals, condos and single family houses, but have never looked at vacation rentals. I am in Charleston, SC and it seems like a good area for vacation rentals. Does anyone have advice on how to analyze a property to use as a vacation rental? What vacancy factor do you use? Do I include a cleaning fee with the rental agreement? What rate do property managers typically charge? Is there any special insurance I need? Do you allow pets in your vacation rentals? Condo vs SFR for a vacation rental? Any advice is much appreciated!

[Robert Whitelaw]

Originally posted by @David Lowe:

@Jake Knight I had not head the 30 day thing, but that is what I have been finding on AirBnB. I’m going to keep my eye on a few specific rentals to see how they perform in the coming months to get an idea of demand in different areas. It seems stressful to not have an idea of your expected income more than a month in advance, but I guess that will help me shift my mindset from employee to entrepreneur (I have a few other coals in the fire as well) J

@James Carlson Thanks for the great advice and for the heads up about the ongoing litigation. I will certainly look into zoning while determining where to invest. For vacancy rate, I have been assuming the properties are rented an average of 14 days per month to run numbers. I will refine that number as I continue to research and I anticipate that the summer months in Charleston will see higher percentages than that. I had planned on hiring a property manager, but several people on this post have suggested managing it myself. I like @Robert Whitelaw ‘s suggestion to “Manage it yourself – sort of” That sounds like a good business model, and I’m sure I can find an hour each week to manage it. I do love real estate after all!

@Andrew McConnell Thanks for sending along the website. While the graphics and pop-ups were distracting, there is a lot of excellent information compiled in one place. I recommend other folks check it out as well.

@Robert Whitelaw You make a lot of good points for managing it myself. I take very good care of my properties and I expect a property manager to do the same. I have a manager that I trust for my SFR in Charleston. I plan to talk numbers with her to see if she does vacation rentals. If she doesn't or if she is asking too much, I think I will try following the model you outlined.

Thank you all for the great advice! You have helped me come up with about 10 different areas I am actively researching and I am still weighing SFR vs condo vs townhome for the first vacation rental. I can get a better location with a condo, but have more exit options with SFR.

 What you will find is that it comes really down to a few minutes a day. You will get an email that someone wants to rent your unit. You will go to the site, verify it is not taken on the calendar (The system already defaults to a "The property is not available" response template for you) or that you were thinking doing something else with it during that time. Maybe the potential renter asks a question or two. You answer and include a link to book the time and you are pretty much done. Then you can go days without having to deal with it at all. It really is ridiculously easy, given the pay off.  Just make sure you are able to reply as quickly as possible and take advantage of VRBO facilitating the renter paying by credit card. There is a fee, but the added convenience of booking and paying online is what I believe gets my unit rented before other peoples.

R