Lake House Vacation Rental in Northern Michigan

[Jacob Bremer]

Investment Info:

Single-family residence other investment.

Purchase price: $702,500
Cash invested: $7,500

Vacation rental in northern Michigan.

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

I have always been interested in owning lakefront property in northern Michigan. I spent my summers as a child and teenager going up there, and it's always been my dream to be an owner and investor in the area.

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

I had been looking and monitoring the market very closely for months.

[Jacob Bremer]

Originally posted by @Daniel Suarez:

Pretty cool! do you have any income estimates?  Also, how much are planning to pay for property management. 

The previous owners gross income was 68K last year through STR. From my understanding, they were fairly lazy about it as they had it paid off and used it for personal use fairly often. I am marketing hard and also making improvements to it, so I'm hoping for a larger profit, but will most likely be red this year with improvements and remodeling. I planned for that and is one of the reasons I put 10% instead of 20%. Based off the first 3 months of ownership, I'm expecting about 70k. However, after remodel and possible 4th bedroom addition, I would estimate my gross to be 100k. I've found that step up from 3BR to 4BR is the most significant difference in price when adding additional bedrooms.

Most property management companies take 35%. I was nervous about that putting me too far into the red, so I am managing the bookings through Evolve and they only take 10% per booking. I then have local hired help for cleaning, maintenance. I would say it's probably around 20% of my gross income this way, but hard to tell so far with only 3 months and the peak and off seasons differing so much.