All Forum Posts by: Ryan Detzel

Wells ME, we're going for ocean seasonal vacation spot. Biddeford huh, that's a long way form home. :-) Maine does have some good prices though

This thread is great. I'm trying to analysis a seasonal property now which we basically get three months to make money because it's in Maine on the coast. I feel like there is a lot of risk, if we don't rent it for those 8 weeks we won't be cash flow positive. Are you cash flow positive still or do you need a certain occupancy to break even?

Sorry, I wasn't clear enough. I'm not going into this expecting to lose money, the analysis I have shows it will cash flow but there is a large variable of vacancy and no matter what research I do it's hard to nail down or say I'll be able to reach what my goal are and this is why my estimates shows the "worst case" is -$4k if we can't rent it like we're expected to.

With that though, since we're new if it doesn't cash flow then we'll adjust, learn, and try to make it cash flow but who knows...

Here is my original post asking about the numbers: https://www.biggerpockets.com/forums/530/topics/714890-how-to-calculate-vacancy-for-a-seasonal-place?highlight_post=4218607&page=1#p4218607

The deal would never lose per say as the mortgage and tax benefits are still there, I'm referring to mostly cash flowing negative if we don't meat our occupancy goals. We're also looking at getting in $20k (10%) under market because there is one unit that is a short sale so we already have built in equity.

I've been researching buying something for years (about 4 now) and have yet to pull the trigger. There is always a reason and in my area (Massachusetts) prices have stayed very high so that makes it worse. My wife also isn't full onboard as she's very risk averse and she's worried that if the property needs work or is far away my time will be stretched even further which isn't great for the family. 

Anyway, because we know nothing besides what we've read, because we're always talking about the "What ifs", I'm ready (and I think I convinced her) to just go for something that we feel safe owning, that's easy to start (low maintenance) and by my calculations at most we'd be on the hook for maybe $4k/year if renting didn't go so well. This is by far my ideal purchase but I feel that since she's interested in it, that might be a good way to get our feet wet and help us understand everything before jumping too far in. 

As long as we can limit our risk is there any problem diving in like this knowing that there is a chance we'll lose money?

There is this really rundown vacant house that is in a great location and it's surrounded by some really nice houses that have all rebuilt them over the years and I would love to flip it if I could get a good deal on the land but I can't seem to get in touch with the owners. By the looks of the tax record, it's owned by three people (probably an inheritance), the taxes are paid every year so they didn't forget about it but the only address listed is a po box. Should I just write a letter, what would I say? Is there another approach to this maybe to get more info about why it's just vacant?

I'm saying there is a separate line item for the cleaning on the website, so I could add that to the income and then as an expense but it's a wash either way.

All similar places I found (on homeaway and one on Airbnb) charge the renter the cleaning fee so I zero'd this out.

So the place makes sense (for us) if I can book ~50% of the days in the six months it's open, but it feels high based on my opinion people don't want to go to a nice cottage on the beach with pools in May/October in Maine. Here is my optimistic occupancy, basically I have to book July/Aug and half of June to make it even worth it with the rates similar to what the complex charges if you book directly through them. If we fail to fill jul/aug we could be negative $3k for the year, which isn't scary but then the whole next year (if property filled) would be a wash.

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Interesting idea. We have another place that we stay during the summer season, we do like this place but our other house is much nicer. ;-) I like the idea of parties but since this is a community they are very strict on what can and can't be done, they do usually throw their own events every weekend though so that would give the renters something to do. We plan on offering up a "basket" that would give them gift cards and ideas on things to do around the area though.

Yeah, we actually want to self manage, it would be kind of exciting (says the people who have never done it). :-)

I'm trying to think of the worst case, that being we can only rent a few weeks a year and we're stuck footing the bill. I think at that rate we would give it a try for two years and see what happens and then just sell it. We might lose $10-$15k but we'd learn a lot (worse case). Best case is we make a few grand cash flow and build equity.