Short Term Rental

[Willie Barrington]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $391,000
Cash invested: $70,000

My wife and I recently purchased a short-term-rental in the Phoenix metro area. We are excited to start this new venture and look forward to the potential it holds. We are confident that this investment will be a great addition to our portfolio and help us achieve our long-term financial goals.

What made you interested in investing in this type of deal?

We were searching for an investment that would not only provide financial benefits for our family, but also provide us with an enjoyable experience. We wanted something that would help to offset our expenses, while also providing us with a fun and rewarding experience. After much research, we decided that investing in a vacation property was the best option for us.

How did you find this deal and how did you negotiate it?

We had been searching for a new house online for weeks, and the market was highly competitive. This was the fourth house we made an offer on, but unfortunately, our offers had been outbid on the other three. The house was listed at $365,000, but after a lot of negotiating, we were able to close at $391,000.

How did you finance this deal?

We decided to finance this deal using traditional Fannie Mae/Freddie Mac financing for a second home, which required a 10% down payment. Along with this, there were additional expenses associated with setting up the house as a short term rental.

How did you add value to the deal?

We added value to the property by painting the interior, adding pool heat, and setting up the property as a short term rental. These improvements not only increased the value of the property, but also made it more desirable to potential renters. The fresh paint and pool heat provided a more inviting atmosphere and the short term rental setup allowed for more flexibility for renters. We are confident that these improvements will make the property more attractive to potential renters.

What was the outcome?

We are extremely satisfied with this investment. Our original goal was to break even, but it has surpassed our expectations and yielded a considerable return. We are delighted with the outcome and look forward to continuing to make smart investments in the future.

Lessons learned? Challenges?

Our biggest lesson was related to the importance of durable furniture. We have had a lot of damage to furniture from heavy use, which we realized was due to purchasing furniture from big box stores that weren't built to last. To avoid this in the future, we recommend investing the time to research quality, durable furniture sources. Doing so will ensure that the furniture in your vacation rental house can withstand the rigors of heavy use.