Long-term rental conversion to vacation rental

[Lisa Kinman]

Investment Info:

Single-family residence other investment.

Cash invested: $350,000

Husband's childhood home was long term rental and trashed. Renters moved out and I completely renovated it. Now it's a vacation rental and doing very well!

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

Creating something beautiful from something disgusting; maximizing profit with asset.

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

N/A

How did you finance this deal?

Took out a HELOC on my residence, then drained my husband's retirement account. :\

How did you add value to the deal?

I updated the bathrooms, added a game room, an indoor griddle/breakfast station, decorated with beach theme (it's by the ocean), replaced the roof, added an HVAC, added all new flooring, resurfaced the pool, poured new concrete in the backyard, created an area for a fire table, bought furniture for outdoor dining, and much more.

What was the outcome?

It's only been on the market for about 3 months, but we're nearly booked solid! Finally making money on that house!

Lessons learned? Challenges?

Don't waste time and money with "handy" or unlicensed people. Get bids for big jobs and pay for the one that feels right. Get signed contracts and receipts - you'll need them for your taxes. Also, "repairs" will be deducted on current taxes, while "renovations" will be taken over multiple years.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I didn't have to, I'm a realtor :)