All Forum Posts by: Douglas Fox

Ernes, I think you know the answer.  You just need someone to push you into the deep end.   You can plan on earning 2x to 3x your current rent per month as a Vacation Rental. Do you like Money Machines? 20 minutes to the Dallas Cowboys!  Come on Ernes that is not too (note the proper spelling) far!  Forget about AirDNA, you remember how fearful it was when you first started renting out houses, now get out there and start raking in the dough!   I learned from an expert named Brad Moncado that this Short-Term strategy "Works Everywhere."  I tried it in the middle of a very remote part of Eastern Connecticut and it worked like a charm.  If you list it on the platforms, they will come!  And If it will make you feel better, and strengthen your nerve you should attend a training session on Vacation Rentals, there is one coming up soon in Branson, MO with Brad Moncado.  You could probably drive there and meet lots of like minded people who will give you lots of great tips on getting started.  It might save you a few learning curves.  Best of Luck!

Hi Lane Chomko,   I attended a Massive/Passive Training event where I heard an expert in Vacation Rentals suggest that "this concept [i.e. Vacation Rentals] works anywhere!"  I had a long-term rental property in a very rural area of northeastern Connecticut and I decided to put this claim to the test.   This property was so remote, that when we put it on the market for sale in 1998, for a very attractive price, nobody even came to look at it!  When I told my wife and grown children about the idea to make it a vacation rental, they laughed out loud and said, "Who would ever want to come to that town for a vacation?"  Well, I think we know where this story is going.   We published it to the platforms (Airbnb, VRBO, etc.) in mid-February of 2021 and 57 bookings later, we haven't had a weekend vacancy yet!   So I am suggesting that you might not need to look in a famous vacation market, where competition is fierce, to try out this idea.  We have found our income has been 2.5x to 3x what it was previously as a long-term rental and the demand for vacation rentals is very, very strong, way beyond our wildest expectations.

Yeah, as Michael has said, you want to be as open and honest with the town officials as possible.   First find out if vacation rentals are permitted, then ask about your plan to divide the space.   But once you learn that short-term rentals are permitted you might want to try it for a while as a single unit first.   See what the level of interest there is in your area, get a feel for the market.  Then if you really think investing a large amount of money in dividing the space makes sense, you could move in that direction using some of the proceeds from your first foray into the market.  But you might decide, hey, what am I doing?  This is working great just as is.  Why would I disturb such a good thing?

Hi Corey,  This looks interesting.   I asked a few more questions about the event on LinkedIn.  Thanks for posting this.

Similar to finding money for a deposit on your first investment, getting on the same page with your spouse is absolutely critical to your success.   Nothing is more expensive and fraught with unforeseen costs and generational havoc than divorce.   This is to be avoided even more than foreclosure.  Real Estate Training events, where they give a discount for a spouse or allow them to come at no charge, is definitely a way to begin to get on the same page.  The idea that you can do this on your own, secretively without your spouse ever finding out is absolutely foolhardy.  So find a training event in a location where your spouse has always wanted to visit, like Orlando or Phoenix or something similar.   Make a deal that you will only attend part of the training and spend the rest of the time in the Magic Kingdom or something.   This is an investment that will pay great dividends.   Discover your spouse's gifts and see if you can get them fully deployed in your real estate business.  Maybe it is interior design, maybe it is developing rapport with tenants, maybe it is shopping for replacement items in your rentals for expensive repairs, but you have to get on the same page.  If you do, you will become an unstoppable team.  It also sounds like you need to prove to your spouse that there is such a thing as "good debt."  Distinguish between good debt which earns you more than it costs each month and bad debt, such as credit card debt that sucks your life away.  When you think about it, rental property is really a forced savings plan, each month you are paying off principal, actually, your tenant is paying off principle, and they are also paying the debt service, and then there should also even some positive cash flow left over for your family to go out to dinner on occasion.   You are looking for the win, win, win!

@Jessica Wainscott

We were in a similar place last November of 2020 with a tenant at our long-term rental in a remote rural town in Connecticut when our tenant was unexpectantly transferred by his employer.   Having been a landlord for many years, my instinct was to "kick it into gear" and start searching for the replacement tenant, because we want to minimize downtime and science tells us that "nature abhors a vacancy."  But I had heard intriguing reports about the short-term vacation rental market, and I knew of an upcoming 3-day Vacation Rental training seminar, so we fought back on all of our basic instincts and left the house vacant for a short period that ended up being about three months, and attended that training class.   In the training session, we heard the importance of checking with our town officials regarding changing the use from long-term rental to short-term.  So we reached out to the planning and zoning committee and received their blessing in writing.  Now with the training under our belts and the blessing of the town authorities, I authorized my wife to "cut loose" and furnish the home with a theme appropriate to its rural location.  Soon Amazon and Wayfair drones were circling our home like flies.  We got to know the UPS and FedEx drivers on a first-name basis as the beds and the dressers and sofas and dining room sets started filling our garage.  My wife was having a ball, she almost pulled a muscle in her index finger, clicking that mouse, but with no rent coming in from this property and the credit cards approaching their limits, sweat began to appear unexpectantly on different parts of my shirt.  I now have a full set of all of the 64 different sizes of Allen wrenches used to assemble all of the items that she purchased.  The floor refinisher needed a week to do his work, and another week to plan his arrival.  The kitchen and bathroom contractor seemed to have had other jobs that were more lucrative, as we had to beg him to return to finish the project, but at last, the renovations were complete.  The place looked awesome!  We were still unsure that anyone would want to stay in this remote location so we hired a vacation property management company to take professional pictures, manage the pricing and the incoming calls, and take 10% of the income.  We went live in mid-February and got our first booking that same week.  We were thinking maybe we would get a few bookings in the summer after people learned of the existence of our new Vacation Rental which we call The Quiet Corner Cottage.  But they kept coming every weekend, week after week, month after month, some started to stay for the full week, some started to leave nice reviews, some started to leave great reviews and we had guests each and every weekend since we started.   Yeah, but did it bring in more income?   It sure did!  Not only this month but each and every month since we first opened!  This month the income is 3.46 times what we used to get!   So the question becomes, Could you use an extra $4,438 this month, and next month, and the month after that?  At this point, all the credit cards are paid back down to zero and our little "money machine" is pumping out cash like there is no tomorrow.  So yeah, there is some risk involved here, but you also have a good opportunity to hit the jackpot.  And what is the worst that could happen?  You end up with a gorgeous home, fully furnished and ready to offer to the traveling nurses or others looking for a medium-term, furnished place to live.  I have a feeling that the demand for medium and long-term furnished places to live are in extremely high demand because they are so rare.   So I think you should bite the bullet and go for it! 

Hi Tanner, My wife and I recently entered "the STR market/game." Yes, I think it is pretty typical to be able to clear more than $400/month on your STR after all expenses. Maybe you can even clear $4,000 per month! Our situation was that we had a Long term rental that we converted into a Short Term Rental and we had heard that you might be able to earn 2x or 3x the income by making the change over to a Short Term Rental. Based on that, we bit the bullet and invested a tidy sum to purchase furnishings and to make some serious renovations to the rental house. Things like renovating the kitchen and bathroom and having the chimney flu repaired, refinishing the hardwood floors, painting everything, etc. Maybe this is somewhat pandemic related, but the response has been way, way, way beyond all our expectations -- like zero vacancies on each and every weekend since we went live about 6 months ago. We have been easily able to achieve those 2x and 3x increases in monthly income. We can now see why SRT's can be compared to money machines. I think everybody could use a few extra money machines in their life. I don't think you will regret this strategy that you have laid out.

I watched an episode of "Stay Here" on Netflix where a couple seemed to successfully turn around their House Boat into a Romantic Getaway.  You might want to check it out:   

Release year: 2018

Designer Genevieve Gorder and real estate expert Peter Lorimer show property owners how to turn their short-term rentals into moneymaking showstoppers.

Seattle Houseboat

32m

A married couple's floating vacation rental goes from a claustrophobic money pit to a romantic waterfront retreat with a rooftop deck.

Hi Carl,  I think your idea is a good one.  It sounds like you might be offering them what they really wanted in the first place.  The thing to do with the two weeks might be to just plan on not selling this productive assest for 5 years.  If you end up living there then just plan on staying somewhere else for the two weeks, maybe take a vaction, stay with family and friends, etc.   So you would not have to write it into the purchase and sales contract, you could create a separate agreement that descibes the two week provision for 5 years for the seller and include it when you present the purchase offer.

@Yuriy Lobanov It is good to know the condition of the existing septic tank and drainage field as Kim suggested prior to becoming the owner of the property and the septic system.   I had to replace one recently at a long-term rental and the final bill was over $17,000 to install the new tank and drainage field.   If you are not prepared for this, news of the need to replace a system like this could leave you gasping for air!   Additionally, I learned from the guy who replaced my septic system that excessive laundry that drains into a septic field can cause an older system to fail. He said he sees it all the time in a rental property where there are lots of people, sometimes unauthorized ones, using the laundry.  If you are planning to do laundry from the vacation rental property on-site there is sure to be additional laundry from the guests, who don't mind piling it up for you to take care of upon their departure.   Since you are trying to maximize heads and beds at a short-term rental, lots of dirty laundry is definitely part of the program and is likely to shorten the life of the existing septic system.  Forewarned is forearmed.