Investing in a vacation rental out of state?

Question

Hi there BPers!

I've been tinkering with the idea of purchasing a duplex and using both sides as a vacation rental. I do have some logistical concerns and would love to hear from anyone else who has purchased a vacation rental out of state.

1. If you're investing out of state but still need to furnish the properties, how do you go about doing that? Do you hire a interior designer then have them purchase everything? Who will receive the items and put everything in place? Would I need to fly out or hire someone?

2. On going maintenance, since there won't be a "PM" but rather a Airbnb manager, how do you make sure the property is maintained on a consistent basis? Do you schedule annual inspections and fix it then?

Those are the main questions, I'm probably missing something but if anyone else here has experience and is willing to chat, I'll offer you a gift card to your vendor of choice.

Thank you!

Richard Ibeh · Answer

@Angus Yang Hi Angus. 1. Look into the city regulations to verify if STR is allowed and what you may need to operate legally.2. Try Wayfair for furnishing purposes. They are cost effective and interior design is free of charge depending on the scope of work. They provide everything from A-Z if you are out of state and don't have the time to project manage.3. Research a housekeeper and if you have no luck research a vacation rental cleaning company. Normally they know all the handymen in the area or have one on staff so they can be your boots on the ground.

4. Look into getting a digital door lock(optional). That way you can disable/enable lock codes so you don't have multiple keys being cut and more security for your home. You will also know when someone is accessing the rental so they are not using your home free of charge :) You'll be surprised how many housekeepers have friends stay inside the rental when they know there are no upcoming reservations.5. If all seems too much and you can't be bothered then hire a full-service management company to do all the above for percentage of your revenue.

Jon Crosby · Answer

Hey @Angus Yang!  Great name by the way, I'm a big AC/DC fan so love the name Angus. ;)

If you have never been involved in a VR/STR, I wouldn't worry too much about your 2 items listed quite yet.  There are plenty of hurdles before those 2 with regards to acquisition out of state.  Yes, you will want a full time PM and you can use a full turnkey provider to take care of most of the on-site maintenance and inspections, they will even handle setting up the furniture in most cases. That's because they are going to take anywhere from 18-30% of your booking revenues.   The real trick is going to be find a duplex (not as easy to come by as you might think) and then the actual shopping, making an offer, inspection, escrow process that will come thru after you have an offer accepted.  But before you do that, you are going to have to analyze the property's return potential to make sure it's even a good investment. And make sure there are no hidden STR permitting restrictions to overcome as well.

Check out my BP blog for a little more context as while my property is not out of state, it's 2 hours away. (CLICK HERE)  Which like my friend @Michael Greenberg usually advises, at least make sure you are only a few hours flight away.  He lives in Colorado and has STR's in Arizona and can shoot down in just a few hours when any major issues come up.

Best of luck to you on your STR search.  Feel free to reach out with any specific questions and I will be happy to answer what I can!

Cheers!

Angus Yang · Answer

Account Closed, thanks for the response.

That's great, would love to connect and see what areas you would recommend. Currently doing some research on Airdata but it's good to know companies like yours handle the step by step :)

Dorene Mangels-Bacalhau · Answer

Hi @Angus Yang I'm an interior designer looking to expand my portfolio and interested in similar investments. Trying to find the right projects & partnerships to get involved. Where are you looking to buy your vacation rental maybe we can work something out? I'd love the opportunity to get it furnished & styled within your budget.

Michael Greenberg · Answer

Hi Angus,

As @Jon Crosby indicated I do have properties in Arizona, residing in Colorado.  It is a "learn by fire hose" business but it can be done.  My requirements are to be within a 2 hour flight of where my properties are located.  I have a great cleaning crew, an emergency handyman, and have sourced the usual other resources necessary over the past 3 years.  One of the first things I do before even considering furnishings, is update the utilities that are bound to fail, especially if they are old.  Water heaters, A/C, Laundry, Appliances, etc...  If they are old, get them out.  It will save you money and aggravation in the long run.  I am also looking to rip out all of my carpet from all of them.  Guests drag their dirty suitcases and walk with dirty shoes without regard (no matter how much you ask them to not do so).  You'll spend more maintaining your carpet than just replacing it.  As soon as low season hits this summer, it's out and I'm going with laminate or tile in all of them.  As for furnishings, I am lucky enough to have a huge furniture store here in CO and can have it delivered in AZ.  I measure each room carefully, then pick out the items I need.  Don't skimp on beds, guests rave about comfortable beds in their reviews.  I am also fortunate enough to have a designer friend who will help me put a nice touch on my places just for having them join us for a long weekend.  We spend a day running around buying the items, then they leave, I stay and arrange them all as she instructed.  I currently have 5 properties (one not ready yet), and travel about 4-5 times per year to check on things and inspect.  Hope that helps.

Mike

Paul Sandhu · Answer

2. Doing an annual inspection to fix things is a bit too long.  You would want to do an inspection after every renter.

Others have said it on here, and I will just repeat it...find a good housekeeper to keep the place clean and make her your PM.  Of course you're going to pay her more than housekeeper wages when she is the PM.

She will be the one with "Boots on the Ground" that will see what is wrong or needs fixing.  If you are lucky, her husband/brother/inlaw/neighbor/uncle is a handyman and now you have 2 problems solved.

1. I have furnished about 19 STRs with furniture and appliances I bought from estate auctions.  The rest I have furnished when a LTR moved out and into a nursing home (and didn't need the furniture).

Tyler Work · Answer

Hey @Angus Yang, sounds like this could be a great investment!

I can share my thoughts on point #1.  Do you have some design sense and willing to spend some time shopping around Craigslist?  The cheapest option is to buy big items used and find everything online but you have to be semi-good at that type of thing.  I would highly encourage you to fly out there and make sure everything is set up properly if you plan on managing remotely.  Some other options:

Depending on where the property is you could look into using Feather to do a rent-to-own on furnishing the properties.  They deliver and set everything up in SF and NYC areas, you'd have to call and see what they can do in other cities.  Totally turn key option and spreads out your initial start up costs.

Havenly is an online interior decorating service that will do all your ordering for you.  I can't imaging hiring an interior designer to go shop for you in person would be cost effective at all, but might be depending on your area.

Try to keep your furnishing budget to 1.5 times your mortgage or rent cost as a rule of thumb that I use.

Hope that helps!

Investing in a vacation rental out of state?

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