Starting up a Business plan for Vacation rentals

[J. Johnson]

Hello all, Just curious as in the first couple of steps to start focusing on when it comes to developing a business plan for vacation rentals? I know that the RE attorney is a must but other than a attorney what are some others to focus on?

[Ann Watkins]

J. Johnson Hi there. Not sure how involved you want to be in getting it ready for market but here is my story. I bought a pre-forclosure ocean front property in 2011. The owners were losing this property and a couple of other ones.

I ran the comps and realized the other ocean front condos were still selling for at top price but this one the owner was willing to let go for his balance owed, almost .50 on the dollar. I know right...an urban legend. I bought it the same day it hit the MLS and he was just happy to get it under contract.

I went to the bank that held the remaining loan because I figured that would be the easiest way to get the financing pushed through. It worked, they fast tracked it.

While I waited for the property to close I interviewed folks to get my team together. By the time we closed I had my carpenter, plumber, electrical, flooring folks all in place and ready to go.

Then I drove the island to determine what I could purchase from there vs. what I needed to get from Houston. Some things like mattresses I ordered online, some items I got from the Habitat store and some from the local stores there.

I semi-lived in the property during a lot of the renovation. My mom had just passed and the remodel and waking up every morning looking at the ocean was quite healing for me.

I initially hired a management company to handle my bookings but wound up firing them after 6 months. You really have to do your work here. Try to stay away from companies who manage competition or actually own the competition.

Because my property was remodeled in a way that made it "high end" I found that the company was using pictures of my property for advertising then placing the guests in other properties. I also found out the owners of the company had not paid the hotel tax.

I had the property on Flipkey and was getting up to 10 inquiries a day. I would simply forward these inquiries to the management company and those were the only bookings I was getting. However, the owner's property stayed full.

That said, I didn't use accountants or attorney's and haven't really needed to. The company I have it with now keeps it booked and my revenues will have this property paid off next year.

Good luck and Brightest Blessings!