All Forum Posts by: Steve Dove

I've since purchased a third vacation rental. This too, with the same type of marketing and effort, has been booked solid for this current summer and the one prior. For me, with my system, it's now easy to obtain a home and absorb it into the overall process. It's essentially the same for each. I'm changing things up a bit this year with marketing, as I've had a professional site and logo created, and am in the process of improving my rankings with extensive SEO. Not to mention, my credibility is improving as we continue to have more repeat business and referrals. I'm also getting ready to launch a 30 second radio commercial to hopefully capitalize on the fall season. It's a roll of the dice, and not cheap. But.... no risk, no reward. I'll post about my experience once we have some actual conversions.

Good luck on your first rental. Read a few books on the subject. If not for anything else, for the free document templates and some "outside of the box" thinking.

Steve

My wife and I went through this exact situation last year. We exchanged a property in my name, for a vacation rental in both of our names. Because of Dower rights, I couldn't sell the property without her. This raised no flags for my accountant or the company that handled the exchange. I don't think that you'll have issues, but a simple call to a firm that handles these transactions would clear things up for you.

@Danielle Hammond - I am an investor from down state, and own three vacation rentals in northern Michigan (Lower Peninsula), as part of my portfolio. Do your homework and have a solid plan devised. The rental business is not as lucrative as it sounds, for beginners, unless you're able to eliminate debt service altogether. However, It has several other advantages in my opinion, which are tax related. My advice to you, is to pay off your existing debt first. While I can appreciate your enthusiasm for wanting to be a real estate investor, you're not doing yourself any good by taking on a new set of financial risks. Once you've committed to eliminating the outstanding bills that you have, you'll have more credibility with investors.

@Matt A.  - One key factor that I forgot to mention. You must actively participate in managing the vacation rental, to take advantage of this.

@Matt A. This was briefly mentioned by @Anthony V. Vacation Rentals are considered as "active" investments and treated as a business, as opposed to a typical rental property. Therefore, losses (improvements, depreciation, etc) reported on annual tax flings are treated differently. Each investor/situation varies, so please discuss this with your accountant. Here is the official IRS publication on the subject discussing passive losses. http://www.irs.gov/publications/p527/ch03.html

@Brandon Turner - My first investment was actually a vacation rental. I now have three lake houses in Northern Michigan that I run as rentals. I've owned single-family rental properties, condos, flipped houses, etc. However, I prefer vacation rentals overall. I have a great set of repeat customers, offer great deals, and love the tax advantages (not subject to passive loss limitations) of a vacation rental, as opposed to a long-term rental. 

My vacation homes are professionally cleaned and maintained on frequent basis, allowing me to address any necessary repairs at the time that they occur. My experience with long term tenants has not always been favorable, whether it is because of late or no rent payments, the way they take care of the properties, etc. With vacation rentals, my guests pay in advance, never establish tenancy, and are usually in and out in a week or less.

The only drawback to a vacation rental is usually the initial costs associated with acquiring one. These homes need to be fully furnished, to include linens, cookware, toiletries, etc. These things add up. In addition, there are marketing costs and usually a great deal of administrative work associated with answering emails, taking phone calls, handling rental agreements, etc.

However, the best part, is that I can use them when they are vacant. I'd be happy to discuss any aspect of the business. My site is: www.upnorthlakehouses.com

-Steve

@Kris Taylor These are some of my same thoughts. I think that my best bet is to just work closely with the others that are renting properties in the area, and keep a private blacklist. This is by no means a usual occurrence, and my screening process is bound to fail some of the time. There's probably no need to change what I'm doing because of one bad egg. It's just a shame that grown adults will spend a considerable amount of money to rent a well kept home, and then revert to adolescent behavior while staying.

Hi all,

    Is anyone with a vacation rental, currently using, or have you used www.guestchecker.com for verifying a potential guest in your rental? In 8 years, I've been extremely fortunate to have great guests stay with us. Unfortunately, this past week, we had a group of so-called professionals stay and trash one of our homes. I'm thinking about using the site, but they do require that you link back to them, with a disclaimer indicating that guest information can or will be reported to them. My only reservation with this, is that it may be a deterrent to future "good" guests.

Thoughts?

Steve

Good luck @Denise Dresbach . Let me know if you have any questions about vacation rentals at all, i.e. screenings, deposits, processes, taxes, etc. Your sweet spot is going to be with properties, sub-$200k, as it will allow for affordable weekly rates, if you're carrying a mortgage. 

@Denise Dresbach  - Great advice here so far. However, you need to do something with that money quickly, as it is expensive for you to keep holding on to. Next time, find the deal, and then pull the necessary equity to finance the down payment. I own multiple vacation rentals, however, not in Hawaii. I manage them all from about 4 hours away, and have been successfully doing so for about 8 years. What's the market like for vacation properties in your area? Maybe you consider something local.