All Forum Posts by: David Hays

@Gabe K. already commented in your other thread, but let me welcome you again to BP. I like your "mini-retirement" plan - you've picked up on my biggest hobby! Spent a few months in 2014 between Korea and SE Asia (though didn't make it to Australia in that trip), so I know you're going to have a good time - don't take too big of a backpack, though! You'll want to keep it on you more often than not.

 Good luck on your search Jason! It's very possible to manage your vacation rental at a distance, just by setting up the right systems and finding the right team. You'll want to have some way for your guests to check themselves in (how do they get into the property?) and some prepared information for them about the house. It shouldn't be very hard to find a maid to turn over the place, but when doing so, I encourage you to solicit those with hotel experience over home-cleaning experience - there's a big difference between the two - and make sure you negotiate a set rate. I'd also recommend that you find a local handyman that you trust - get references, have him do a few jobs for you when you're in the area to oversee the work - so that when things break down, you have somebody you can call and potentially rescue a guest's vacation. As for amenities, that will vary widely depending upon your chosen market, so take a look at competing properties and see what they're offering - take into consideration what is realistic for you at your target price point, and be sure that whatever you choose to offer, it's something you can maintain consistently with every guest.

Welcome to BiggerPockets Jonathan - Roseville is an interesting market, and one I'm not too sure I'd have gotten into buying into, but each person has their own goals. Your HVAC experience will unquestionably come in handy while you develop your experience in real estate, and with that, I would caution you not to price yourself too low if you start looking at remodeling - what I mean by this is that, when one has applicable experience, it can be easy to say "Well I could get this done for $500" when the next guy's charging $2500. Not to devalue your experience - and DIY work will definitely pay off in that sweat equity - but you can't DIY forever, so make sure to price out your work as though someone else is doing it....that's when you'll know your numbers are solid.

Maricela,

Good for you on making the strong moves towards buying - is this your first property? What draws you to the idea of doing Airbnb/VRBO rentals - personal interest, or a need for the additional cash flow to qualify the numbers you're seeing? Finding someone to "take care of the cleaning and all that jazz" is generally possible, but expect to pay anywhere from 30-50% of your overall revenues for professional management, just so you know. Also, you should be aware that condominiums will generally be exceptionally harder to offer on Airbnb, since you'll be dealing with neighbors in close proximity and an HOA that will most likely prohibit short-term rentals - at the least, make sure you review the HOA bylaws before you purchase anything if this is your intention, just to be sure it'll actually fit your goals.

I'm increasingly realizing the disconnect here, at least from where I'm coming from versus the perspective of many here...

I am a professional hospitality consultant, with a background in hotels and restaurants, and my work focuses on helping independent hotels, resorts, restaurants, and vacation rental companies around the world improve their operations. I built a very successful business of vacation/tourist rentals in Spain, and sold that business at the end of last year. I was able to do that because I recognized that vacation rentals are part of the hospitality industry, more than they are a part of the real estate industry, and that I needed to operate that business as a professional hospitality enterprise. What does this mean? It means active work, active management, not passive investment, and I fully realize that a lot of people on here are not meaning to start their own business, and are more interested in passive investments. This...this is the disconnect that I'm referring to.

The reason I make this point...well, if you think about it, I think you'll understand: hotels advertise on LOTS of websites, like Expedia, Booking.com, Travelocity, etc. These are referred to as "booking engines." These websites we're discussing here - HomeAway, Airbnb, VRBO - are exactly the same thing, with the minor exception that they have introduced a limited, consumer-level hospitality PMS (property management system). These websites are truly only a marketing tool, and they don't stop you from managing your own independent website and booking engine (or your own advertising), but what will make the difference is having your own PMS.

@Dexter Crawford this is what you're referring to with LiveRez, which yes, I do have some limited familiarity with. Have you actually requested a quote from them to get those numbers, though? That seems pretty excessive (especially a $5k setup cost!) for a small enterprise, but perhaps you have 50+ units you're managing? In any case, they are only one of many companies out there, so if you really want to go that route, I'd encourage you to shop around (feel free to PM me if you want some ideas).

 While you are certainly entitled to your opinion - and I won't take that away from you - Airbnb is indisputably the industry leader at this point. I grossed comparable revenues from our rentals last year, and from the five sites that I kept listings on, 90% of our traffic came through Airbnb. With that said, I agree with you that very few landlords are running their operation as a business, and this has been a focal point of many of my posts on the matter here on BP - managing a vacation rental, whether on Airbnb, VRBO, Homeaway, or any number of other sites, is a labor-intensive business on its own, not a passive investment. 

As for the fees imposed by these various sites, Airbnb wins out again in my book - by charging only the credit card transaction fee to the host, you put the real power of advertising and marketing on the host. In other words, you can market your property as much or as little as you want, and pay the same fee overall to Airbnb.

Hi Patrick,

You might have some big hurdles trying to convince a lender to put out on vacation rental property if you have no experience with vacation rentals. Considering that running a vacation rental is much more like running an active business than the comparatively-passive business of long-term rentals, what you'll need to present to the lender is going to look a lot more like a business plan. I would encourage you to develop a bit more comprehensive long-term strategy and forecasting, so that the lender can see you have a realistic idea of what your revenues can look like throughout the year. I'm attaching a couple screenshots (snippets) of a simplified 36-month revenue forecast I did for a client recently to give you an idea of what I mean. Please feel free to reach out for any questions.

Hi @Dennis Cobos, and welcome to the BiggerPockets community. There is quite a lot of activity on here from the Bay Area, and I know that an event we recently had in Sacramento had a majority attendance from the Bay - in other words, I'm sure if you use the Community tab at the top to Find Members, and spend some more time here on the forums, you'll have no problems at all finding local professionals to connect and network with.

As for your idea to purchase property in your hometown or home-country for tourist use, it's hard to say exactly whether that's a "good idea" right off the bat. I can tell you that, in simple, it's totally possible, as I have tourist property in Spain that I have managed living literally around the world. The solution is to have comprehensive planning and solutions, so that you can manage your business from wherever. What is your main motivation for buying in Guatemala, though - price? I'd imagine the property prices there are quite a bit friendlier than Bay Area prices, especially on a Bay Area salary, but then what are your potential revenues? Have you checked into tourist rentals in Guatemala City or Antigua? What does their tourism industry look like, in terms of domestic or international travel? Are you thinking to buy there so that you can visit, as well? These are some of the questions you would need to answer in the process of evaluating the viability of this option.

These are the questions I answer on a daily basis, so please feel free to reach out to me if I can be of any assistance - I'm happy to point you in the right direction.

Originally posted by : @Patrick Soukup

Funny that you mention that, as I built quite a business having that exact same conversation - I agree wholeheartedly that this is what she should have done in the first place, and I know that I did not make that particular distinction clear in my first post.

Originally posted by @Joe Splitrock:

If you have difficulty with her leaving, tell her you will report her to Airbnb. I doubt they would be ok with her subletting properties on Airbnb without landlords permission and they would probably drop all her listings.

They won't. The person calling could just as easily be someone maliciously trying to harm a competitor, and they will generally refuse to get in the middle. I do not work for Airbnb, but I have worked with them extensively for several years, and have worked with clients dealing with this particular issue before.

Well, what exactly are you looking for in terms of advice, then? The simple answer would be that, if you want to be successful, you should eliminate the thought of this vs that. The reason is that successful short-term-rentals are a very different animal than long-term rentals, and even in the ways they look the same, they're different in enough to make their management entirely separate issues.