Spending more on vacation rentals

[Dan Stewart]

I have been reading for months about investing and keeping an eye on the market in the area I wanted to possibly buy. As an investor, it says the best thing you can do is get a place for a deal and don't settle for anything less. I am looking for a vacation rental that could be rented out for 12 months out of the year and not just during the summer months. However, it looks as if the prices are 25,000 to 50,000 more than I was originally willing to spend. Even places that need alot of work. Is this normal for vacation rentals? Or, should I continue to look for a deal?

Thanks for any advice!

[Jason Hsiao]

Hi @Dan Stewart, I would look to see if the returns is worth it. Project out your revenue minus expenses and vacancies for summer only vs year round. Hard to say which is better not knowing more detail where the market is you're looking at, avg nightly rate, and vacancy rates outside of summer.

Something I've done in the past is check out other similar properties on Airbnb and VRBO to see what they're renting out for and how often they're booked to plug into my model. You can also ask realtor or property management companies to get an idea on this data, just beware they are likely to paint a rosier picture than reality.