This was our first vacation rental investment

[Tom Stone]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $130,000
Cash invested: $59,000

Short-term vacation rental

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

At the time we were managing short-term vacation rentals. We identified a trend which was making another property a success and presented the idea to the owner of this property. They declined to make the improvements, but offered to sell it to us.

We managed this property for 5-6 years before we purchased it.

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

We dealt directly with the owner.

How did you finance this deal?

conventional financing.

How did you add value to the deal?

We added on a covered porch with a fireplace and improved the kitchen and bathrooms

What was the outcome?

This unit went from averaging $1,000 per month in 2016, to averaging $5,000 per month in 2020.

Lessons learned? Challenges?

This being our 1st investment property, we purchased it as a second home through a bank. There were a lot of hurtles to overcome and really struggled with getting the bank to understand what potential there was in short-term rentals.

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

Worked through a mortgage broker to secure financing. Loan was secured as a personal mortgage, not an investment property.