All Forum Posts by: Maura Paler

Congratulations!

Investment Info:

Single-family residence buy & hold investment.

Vacation Rental

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

Privacy, waterfront, views

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

Local real estate website. VERY interesting story on how we negotiated with the owner - it was unfinished (just exterior done, no floors, walls or kitchen yet). He ended up renovating it for us, at our specs, while we awaited financing approval from the bank. Very stressful as we weren't sure we would be approved and he had to pay for all the renovations, but it worked out very well in the end. Cabin life did a 5 page spread on this cabin and the story.

How did you finance this deal?

Investment loan 30 yr mortgage

How did you add value to the deal?

Generator, landscaping

What was the outcome?

AWESOME - generates $75K plus a year

Lessons learned? Challenges?

This is very remote. Getting housekeeping is very difficult. Winter driveway is woodsy and hilly and extreme weather up here - also very challenging.

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

Local realtor

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $525,000
Cash invested: $120,000

Live in and season vacation rental (during lucrative track season)

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

Close to our other rentals, lucrative seasonal income

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

Trulia app notification on my phone - been watching RE for one year. This is the only property we looked at, made full price offer as we felt it was under priced and it is a VERY competitive market here.

How did you finance this deal?

Traditional 30 yr mortgage.

How did you add value to the deal?

Added a full bath, cosmetic interior work and some landscaping

What was the outcome?

Awesome

Lessons learned? Challenges?

Very happy, local recommended contractors which we were very fortunate to be very happy with. No real challenges.

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

No

?? We are on lakes, don’t need pools

@DeShaun Sellers yes I started by renting my NYC apartment which was my primary residence. Yes I had nice things stolen, although that was a long time ago and haven't had any theft in past 10 years.

To make guests comfortable I would remove your things, put them in a locked owners closet and let them feel as though the place is "theirs", not "yours". It is such a big business now that I beleive even "home sharing" guest expectations are much higher, they expect cleanliness and consideration on the scale of a hotel. Not necessarily decor, that is your own style that you bring to their experience, but definately make them feel that you thought of them. 

I just came back from a $500 night airbnb in Tahoe and we were so dissappointed with the thoughtfulness aspect of our stay. The host had their personal belongings in the closets, cabinets were stuffed with mismatched and chipped dishes and pots and pans, spice jars and inside cabinets were filthy, no tin foil, plastic wrap, washer/dryer soap. Being an owner myself I am not leaving a bad review, but my friends are! 

I started in this business 15 years ago renting out Miami and NYC homes and apartments for others. Made a ton of $ on commissions, and had no problem getting booked (even before Airbnb and HomeAway!). However, both those markets now BAN all short term rentals, with a few exceptions. So I wouldn't invest in an area where that may happen again. 

We now own 7 vacation rental properties in my childhood vacation area of the Adirondack Mts. They do get booked year round as we are within 4 hr drive of NYC. There will never be a ban on VR's as our area needs and encourages the tourism. 

The longer we own them, less $ is spent on renovation/upkeep and more $ is made via good reviews and repeat guests. We also have more equity in the property. So yes, long term is the goal. We also hope to sell them as an established business, not just a vacation home. 

Instructions must be written for everything. We have (very nice) cabins in the mountains. We get lots of city folk who do not know how to manage (or respect) the heat, fireplaces, firepits, cell phones not working, departure times, etc.  

For the most part it's been a GREAT experience, and profitable. We have had a guest burn down a sauna and shed, forget to leave on the day of departure (twice, both resulting in forest ranger searches, ugh). They move furniture around and the housekeeper can't move it back by herself. So we have a really lenghty arrival instruction sheet. 

We did not, sorry don’t know much about the process

We own 5 in the southern ADK's, they do very well. 

Things to keep in mind: 

- good to have a "property mgt" type local to help with the brutal winters (snow removal, leaky roofs, icey steps), summer bugs (ant, mice infestations produce bad reviews), furniture, propane grill tank and linen replacements, and general fixes (guests break stuff)

- need someone to keep lawns mowed and watered, driveways plowed 

- reliable housekeeping is essential

- less guests = less trouble/damage. We rent to no more than 6 and avoid purchasing large houses for that reason 

- stay away from under 25 crowd, drinking produces damage, liability risk and trouble with neighbors. Snowmobilers are generally a drinky crowd, we avoid them (and we are snowmobilers ourselves...we see them first hand...all the more reason to keep them out of our houses)

- rates vary throughout the year, summer is highest. We hire housekeepers to work Mon and Fri (most rentals are Sat-Sat so housekeepers are all taken that day). That way we can offer a F-M 3 night rental and M-F 4 night midweek rental. This produces more income than a weekly rental (ie: weekly is $1850 for two, or $975 for 3 night weekend, $1150 for 4 night midweek). We charge $10 or $15 per night, per guest over 2, that way we encourage couples to rent our 3 bedroom homes which makes us less $ but is pretty much a guarantee of no damage/hassles and the housekeepers love it. 

- have a large storage area so you can store and replace broken dishes, linens, towels, coffee pots, wine glasses, all the things that WILL get ruined at some point. Guests will leave a bad review if they can't have their coffee in the AM :)  

- we have a running list of TO DO's for maintaining the houses in summer, winter, spring and fall. Lots of tasks to keep track of, and easy to forget 

- if you are renovating, think of all you can do to make the house guest friendly, like having the pipes on an INSIDE wall not an outside wall to prevent frozen pipes which can be a nightmare. Slipcovered furniture, cheap (but nice) indoor/outdoor reversible rugs, storage area for skiis, snowshoes, all that stuff.

We own 5 vacation rental homes in one area and have invited friends for years to join us on vacation, giving them one house and we stay in another, which is a great way to vacation with people. Then the inevitable began happening...can they use them or rent them, or when can they join us again. 

We would offer free last minute availability. Sometimes a discounted stay in advance, but of course I hate taking $ from friends. 

What ends up happening is they forget that last minute = same week, so they would ask for free dates a month in advance, and we'd have to say no, which is ackward. 

Or they would rent at a great discount, then cancel last minute and want their money back, or to switch dates, not heading our very clear no refund policy (we do tell all rentors they must sign our lease for insurance purposes, so they've seen the policy). That is a direct loss to us, and a hard thing to address with a friend. 

When some do get a free stay, they would not read the instructions, I guess because they don't think it applies to them since they've been there before. Kayaks left floating in lake, heat left on with windows open, garbage not put out, all food left in fridge. Housekeepers complain WAY more about family and friends than paying strangers. 

So, as much as we would really like to share what we've built...we do not promote the houses to friends and family. Our mortgages need to be paid, and our nerves needs to be intact. 

Would love a way to figure it out so it could work for everyone, but can't seem to.