Any Vacation Rental Owners (with Multiple Units) Out There?
Brandon TurnerPro Member
Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votesI'm looking to potentially write an article on vacation rentals and would love to talk with some folks about their experiences with vacation rentals. If this is you, jump in this thread and let us know a brief version of your story, or send me a PM!
Hi Brandon-
We turned our primary residence in Columbus, OH into a vacation rental about a year ago kind of by accident. At the beginning of 2014, we started to focus on reducing our student loan debt, and in because of that, wanted to increase our income to speed up the process. We decided to list our house on Airbnb and Homeaway/VRBO, thinking that if we could make a little bit each month, it would be an easy way to make extra cash with a small time commitment. Well, our gross earnings ended up averaging 4x our monthly mortgage payment (including PMI, property taxes, and insurance). We were shocked that there was such a steady stream of visitors in Columbus! After hearing guests' feedback, we know we can attribute most of our beginners' success to the location of the house (walking distance to shops, restaurants, Ohio State, convention center, etc.) coupled with our décor choices.
In terms of expenses above and beyond a normal rental, the highest are utilities (gas, water, electric) and cable, which run us roughly $200-450/month depending on the time of year. Smaller costs are things like buying new towels/sheets every 4-6 months, and getting small welcome gifts for our guests. In terms of cleaning, we have tried to do the majority of it ourselves, although we did hire someone to help us in the summer when we got really busy.
For the first 6-8 months of doing this, we would stay in hotels or with family when guests came. We don't have children yet so we had that flexibility, and the bookings were not frequent enough to justify buying another place. By spring/summer when things really picked up, staying in hotels started to get difficult, so we bought a duplex in an up and coming neighborhood that we're fixing up. We'll live on one side and rent out the other (standard rental, as the area most likely wouldn't be attracting vacationers) until our next opportunity presents itself.
A lot of people told us that we were crazy for using our home as a vacation rental. But to us, it was such a [relatively] easy way to make extra cash compared to getting a second job. And what's interesting is that we've found 99% of our guests to be super respectful of the house. We're very clear from the get-go about our house rules, so we tend to attract guests who are on the same page as us.
We hope to increase our earnings in 2015, now that we have a solid set of reviews and have had some experience with it.
@Matt A. - One key factor that I forgot to mention. You must actively participate in managing the vacation rental, to take advantage of this.
I'm loving this thread as I am looking at getting into vacation rentals right now. Does anyone have any experience in the Poconos?
Hey all, I was wondering if anyone had any experience renting their VR to military members on temporary duty at or below the government rate. I am very interested in VR since our area is hard to cash flow. We live near the beach and also a military installation that gets quite a bit of military into it on temporary duty assignments for about 2 weeks or so. I have looked up the government hotel rate in this area and it is $138 per person per night. I'm thinking that if two military members doubled up they could stay at a VR for possibly cheaper than a hotel room. Peak season here is around $350 per night for houses near the beach that we are looking at. I was thinking of offering a military rate of $250 per night for off season nights. This would be advantageous to the government and could have some benefits to the member as well. It might not be worth it in peak season but potentially in the off season. What do you guys think?
I own several vacation rental properties in the heart of South Beach and have made very good returns on my investments by short-terming them on the major listing rental websites. I also manage properties for my family and friends and have their units occupied with high premium rents. The costs of units in South Beach is so high, you need to be able to find areas in South Beach legally zoned for short-terming...While more work intensive, there are definitely higher returns to be made!!
Hi @Jolie Winkler,
I'd be happy to try to answer any questions you might have about Palm Springs. I'm a native and have seen the Valley grow like crazy in the last few years! My real estate group are Palm Springs locals and involved in real estate from sales to flips and design and construction of new properties. Palm Springs is getting back to its glory days as a cool destination and modern design is hot right now.
Hi Brandon,
Big fan of your podcasts, and often you ask, "why not more women investors?" Well, I am a woman, have a tri-plex rental, and it's in Mexico and I operate it from the US. (like the wizard, behind the curtain)
It's in the most famous city that no one's ever heard of, San Miguel de Allende. It was Reader's Choice for Top Destination in the Word in 2013 yet the average person doesn't know it exists. It's a stunning city, but not near water and the locals try not to publicize it so it won't change. It's famous for the Arts and Culture and is a UNESCO World Heritage Site.
In Mexico, there are many things that differ from US vacation rentals. First and foremost, it's an all cash deal, and now you have to account in detail, where the cash came from (due to money laundering). Mexico just barely started doing mortgages during the bubble as US folks were using their refi money to buy places, then the crash hit and the banks there were left holding the bag. You MIGHT be able to get a Mortgage there today but I understand the interest rate is up around 16%, ouch. I bought with partners, then have bought them out with decent interest (6.5%) and short terms.
Many people think that you can't "own" property in Mexico, this is true with oceanfront property, but not once you get slightly inland. It's all handled by Notarios or Notaries, not lawyers.
The problem in SMA is there are so many vacation homes on the market it tends to drive prices down and everyone begins undercutting each other. Most of the rentals are single family dwellings that rent during the high season, Jan-Feb-March the town is taken over by Canadians and Northerners escaping the cold. The money raised during the high season pays the owners bills for the balance of the year. My place is different, there are 3 casitas and I rent long and short term, all year long. I have a Management team down there that handles paying the bills, paying the employees and all maintenance issues. I employ a full time housekeeper who keeps it all together down there, and a gardener twice a week. I have a local baker that provides the handmade pastries I have waiting for my guests to have with their coffee in the morning.
The previous owners had very little success in renting the casitas for various and obvious reasons to me. So I began to brand them on the web and market them aggressively, which I continue to do in order to keep them rented. Because of the incredible competition, I "sell the sizzle, not the steak" by providing and emphasizing the amenities that US tourists need to feel comfortable and doing everything I can by way of service. US tourist want the feel of a foreign country with the comforts of home.
When naysayers say you can't be an absentee landlord, I'm living proof you can, and from a foreign country no less. I also have six local long term rentals in my hometown and a 9 ac. farm in Costa Rica I'm developing (that's a whole other story).
I don't aspire to own tons of properties, I feel what I currently have is enough to tide me over. It is a labor of love and will provide easy income in my retirement.
We women are out there, and I know several others in my hometown, but I'm the only one I know with foreign investments, for the time being....
I really enjoy your podcasts and your site, it's so wonderful having all this knowledge being shared so freely among members. Thanks from Louisiana.
Bebe
I have two vacation units in south florida, I rent them out seasonally weekly daily monthly. Its been good so far, just one story of a renter from Latin America that trashed my placed. other than that a typical 1 bedroom brings 1000-1500 per month off season and double that in busy season,net
Hey!
I own an oceanfront residence in Pompano beach, Florida. I invested couple of years ago in a vacation condo from Sabbia Beach Condos, cause i heard from friends its really paying off and it did :-) Since then i bought real estate also in Palm Beach, Fort Lauderdale, and Boca Raton.
So yeah, I'd like to take part of your research.
Marc
I'm considering purchasing a property that could be used for events and corporate retreats so it may be a little off the beaten bath but could also be used as a nightly rental or a monthly rental. This probably means it won't be in Southern CA. I'm considering some areas in CO, WA, and OR. Does anyone have experience renting to high end mastermind or corporate groups?
My wife and I purchased our first rental property earlier this year and it happened to be an out of state vacation rental property. We selected that particular property because we love to ski and saw an opportunity to purchase a home near a ski resort that was also on a lake. This allowed us to capture vacation rentals year around. So far things have worked out very well. We have had a few hiccups along the way but are settled enough at this point that we are looking to purchase our second vacation rental in the next few months. I'm a newbie investor and I know that an out of state vacation rental is not the preferred method of getting your feet wet, but I feel like we made a wonderful decision. I'd be happy to help out in any way I can. Thanks!
Aqeel
I was renting out on Airbnb, but things for Barcelona have changed - the government is overprotective towards the hotel business of the city and they desperately want to have your income. I had to relocate the property on another portal, who just take the initial commission and don't hold your money back on a website. The rest is all yours. Soon, they say, the short-term rental policy will change harshly - I'll be able to rent out for only 90 days a year or pay more taxes. Two years ago renting an apartment in Barcelona was much cheaper and today the prices are higher that those of a hotel room. It's a risky market, still - you don't lose the apartment - the money is invested. That's what I like about renting out.