Vacation rentals in a recession

[Randy Dulac]

I found a 2nd home/ vacation str in my state that I am interested in.  I ran the numbers it will make a decent profit.  The area has year round vacation activities.  My market is smoking hot right now.  I know no one can see the future, but how does a vacation home market do in a recession?  My gut tells me that these areas will be hit harder than other areas.  I want to pull the trigger, but I want to have realistic expectations.  I don't think the house will cashflow with LTR.

[Dustin Allen]

@Randy Dulac

I live in a vacation market. Everyone was worried that business would fall off during the economic downturn of 2008. Surprisingly, business continued to grow through that time period.

In the best of times, our market is served by travelers from across the globe. In a downturn, we have less people traveling from farther away and more people coming from drivable markets.  When people have to cancel their flights and one week vacation to Hawaii, they will still get in the car and drive 2-5 hours to enjoy a day or two somewhere else.