Rookie Investor in Nightly Rental Properties: First Experience

[Richard Robbins]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $250,000
Cash invested: $250,000

This is a nightly rental property in St George, Utah that I invested in. It is my first nightly rental project. I blogged about my experience here: https://prosperopedia.com/investing-in-nightly-vacation-rental-real-estate-my-own-rookie-experience/

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

My accountant suggested that we start buying rental properties to have something to use for depreciation for taxes.

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

I liked the area from having stayed there. I sent over an offer on several different properties before I got this one.

How did you finance this deal?

I paid cash for the property.

How did you add value to the deal?

I put in some updated furniture based on the recommendation of the property management company I hired.

What was the outcome?

The outcome is still to be determined. The first property management company I hired did a very poor job of keeping the condo rented out, so I fired them. I recently hired one that is doing much better.

Lessons learned? Challenges?

I learned that you can't trust every property manager, nor the real estate agent who referred you to him. You have to do your homework. It appears that in my situation, the property manager was either disinterested in making sure my property was rented out, or (worse) it seems like they were potentially even siphoning off rentals from my condo to other clients, people to whom they had more loyalty (i.e. more units in their rental pool).

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

No. I have a property manager in the St George Utah area (Red Sands Vacations) that I would absolutely NOT recommend.

[Duane Richards]

@Richard Robbins We are big fans of St. George area and recently went to stay in Las Palmas in August looking for rental opportunities, both short and long-term. We found that PMs down there vary greatly from 25-40% rent for nightly. We talked with Red Sands and a few other PM groups. Is your current PM recommendable and are you willing to share their name? Or is the verdict still out?  

I was also wondering about the income potential - seems nightly prices are dropping in the area but they are still being filled at a pretty high nightly percentage, is that your experience?

Thanks for the summary post!