Vacation Rental Realization!

[Erica Osborn]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $175,000
Cash invested: $26,875
Sale price: $220,000

This was a vacation rental in the Crystal Beach area of Destin. We bought it. It needed just a few minor improvements and some updated decor. Our cash invested was 50% of the down payment (we had a 50% partner) and 5k for some improvements.

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

It was a sexy deal leaving us with a vacation rental in a highly sought after area and we got it for a good deal! The plan was to be able to use it ourselves and rent it out during peak times.

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

I found it online, through my mls portal from my agent.

How did you finance this deal?

Conventional financing.

How did you add value to the deal?

Improved decor, modernized the unit.

What was the outcome?

I kept my ear to the ground about appreciation in the area and values of real estate around us, in 2 years our property appreciated quite a bit and I decided to sell and take the profit and get out of the vacation rental business. We gladly took our profits from quick appreciation!

Lessons learned? Challenges?

Big lesson learned: Vacation rentals are a business, I love real estate, I don't love the business of vacation rentals. I thought it would be more passive (because I was using a management company).....but I learned quickly it was a business (I was always thinking how to increase income, decrease expenses, reposition, etc.). I couldn't turn it Additional bonus nugget: In my opinion, buy vacation rentals at the beginning of the low season, sell just before the high season (probably a no brainer).

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

I worked with a FL agent, I financed using a conventional lender.