Investing in vacation rentals from afar

[Brianne H.]

Hello, I am considering investing in a vacation rental and just looking for a little advice. I am a new investor, have done a few flips, and have been a landlord when renting out our basement suite before, but otherwise fairly new to rentals. After the sale of our next flip, we should have enough to be able to purchase a rental, depending on area and amount required as down payment. I am considering several options, but vacation rental is top of my list so far. 

My city is not going to give me the cashflow I'm looking for as purchase price to rent ratios are too high, so I am looking outside my area, which I realize can be more risky and have more challenges. I know of someone who owns 3 units in Cabo, and has done very well with them, so that's where I have started my research, but am open to other areas and suggestions. My primary goal is cashflow, though appreciation would be nice too. I have a few questions that I'm hoping people won't mind answering to give me a clearer picture on vacation rentals. 

Do you invest in vacation rentals? Where are they located? Where are you located?

What challenges have you experienced being an owner from afar?

Have you had issues finding reliable property management, or anyone else? 

How often do you visit your vacation rental? 

How much cash did you put into the property (down payment & any necessary improvements)?

What were your closing costs?

What's the market like in your vacation property area?

If you own a condo and rent it short term, like Airbnb or VRBO, how do you work out getting the keys to and from renters? Same thing with a gated community - how? 

Any pitfalls you can recommend avoiding or being cautious of? 

Have you had any issues renting via Airbnb or VRBO?

What is your vacancy rate like? 

Any other words of wisdom? 

Thanks!

[Jonathan Safa]

Hi Brianne Hall love the post and the q's.
I invest in Lake Arrowhead, California. It's a beautiful little ski town in the mountains above Los Angeles.

I use Airbnb exclusively. I would not recommend any other website for listing. But of course, we do our part and keep current with Craigslist. You'd be surprised the amount of traffic I pull from there. But I always point them to the Airbnb account and make sure each and every single booking goes through Airbnb. They have a fantastic $1,000,000 insurance policy that is a great peace of mind.

Our homes vary in size, but returns are always very lucrative. My flagship home grosses around $40k for the year, of which I net maybe around $10k.

I spend probably a half hour a month working on the four homes on the mountain. I have a tremendous cleaning crew, and I have an old college classmate I have hired for the day to day communication with guests and potential bookings. She coordinates with the cleaning staff about issues, items needed, etc.

Successful Airbnb homes are about great relations with neighbors, working with the right people, and having the right systems in place.

Good luck with any venture! And let me know if you want more information about lake arrowhead!