Vacation Rental Investment

[Krista Goodrich]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $225,000
Cash invested: $25,000

Dilapidated 1928 home on A1A, purchased, renovated, made adorable and now use as a vacation rental home that generates $60-$75k/annual revenue.

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

The house was located in an area zoned for vacation rental and we saw the writing on the wall that the city was about to start coming down on short-term rentals in residential zones so we snatched it up.

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

Found on the MLS.

How did you finance this deal?

1st year was hard money loan at 10%, after that we got a commercial loan at 5%. Put 20% down and made $25k in improvements (mostly kitchen) and since then haven't had to pay a dollar for it.

How did you add value to the deal?

I decorated it like crazy to make it a super fun beach getaway. We did some extra fun stuff with garage (added lots of games like ping-pong, foosball, etc). Used vibrant colors to make it stand out and turned kitchen/living room combo into a really neat space.

What was the outcome?

Amazing. We have rented the house out for as low as $48k a year (COVID shut us down for 3 months) to $72k a year. We are able to let friends and family use it at times. It's increased in value over $100k since we purchased it.

Lessons learned? Challenges?

Do the renovation on the front end...we did that here and it made all the difference.

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

Yes, invested in this with another agent that I have two other investments with, we share responsibilities and make it work.