Author Topic: Investing in a vacation rental  (Read 4387 times)

rkbabang

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Re: Investing in a vacation rental
« Reply #10 on: August 14, 2019, 05:56:57 AM »
There was a guy on that "Millionaires Unveiled" podcast a few weeks ago who had some rentals that were exclusively Airbnb's targeted at mountain bikers in a region of Arkansas.  They didn't get into a ton of detail, but you might find it interesting.

Thanks.  I will definitely check that out.


Castanza

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Re: Investing in a vacation rental
« Reply #11 on: August 14, 2019, 05:58:20 AM »
A family member of mine bought land up in Sauble Beach Ontario about two years ago. Built a cottage on it. Mortgage is$1k a month (all expenses) and they rent it out Spring -> Fall for about $2200/week. They have had almost every week booked the past year. They live in the states and pay some local company $50ish a week to clean it.

There are definitely some niche locations you can find as CorpRaider pointed out.
wow that's great. Must be a really nice cabin at $315 per night vs all the other cabins on Air BNB at less than half of that.

Hey that's what my family member told me. I never verified it lol perhaps they embellished. Looking now it actually looks like peak season is more around $230 a night  :P So not quite half, but certainly not as high as I mentioned before. My apologies.


oddballstocks

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Re: Investing in a vacation rental
« Reply #12 on: August 14, 2019, 06:00:18 AM »
One of my hobbies is skiing and as most know ski areas are flooded with real estate.  There are usually threads that pop up on buying vacation property at a resort.

If I had to classify the responses I'd say 90% are in the "it's a waste of money, we never went, it cost too much, I regret it."  and the other 10% "We didn't overpay, weekend rentals covered our cost, and we enjoyed the space."

The common thread on #2 is they had an investor mentality when they went in.  They waited for a deal to make the numbers work, and had correct expectations.  One a ski site I'm on there's a local guy who has been accumulating condos at a local resort.  At this place 99% of home owners are in group one, but he's silently picking these things up dirt cheap and said he has a 20% NOI on the units.  He's also an accountant, so figure conservative, patient, exhibiting a lot of value investing tenants.

I love the idea of investing in places like this.  Rkbabang, this is a beautiful cabin, looks really relaxing.  I wonder if you'll be booked solid in the fall with the leaf peepers.  Also might be close enough to ski resorts that you get a few winter dates too.  Now that I'm thinking about it you really have a year round place.

As a side note have some good friends who moved from PA up to Bedford, NH.  They love it up there.
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rkbabang

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Re: Investing in a vacation rental
« Reply #13 on: August 14, 2019, 06:52:12 AM »
rkbabang,

Looks fantastic, comfy for a family.  Other than what you mentioned, success also depends on the reviews, as you probably know. If there is something materially wrong with the house it should be fixed promptly. Disappointed it doesn't come with a goat.

Thanks,  I don't know how a goat would effect reviews to be honest.   I'm thinking it would cause as many negative reviews as positive.
One of my hobbies is skiing and as most know ski areas are flooded with real estate.  There are usually threads that pop up on buying vacation property at a resort.

If I had to classify the responses I'd say 90% are in the "it's a waste of money, we never went, it cost too much, I regret it."  and the other 10% "We didn't overpay, weekend rentals covered our cost, and we enjoyed the space."

The common thread on #2 is they had an investor mentality when they went in.  They waited for a deal to make the numbers work, and had correct expectations.  One a ski site I'm on there's a local guy who has been accumulating condos at a local resort.  At this place 99% of home owners are in group one, but he's silently picking these things up dirt cheap and said he has a 20% NOI on the units.  He's also an accountant, so figure conservative, patient, exhibiting a lot of value investing tenants.

I love the idea of investing in places like this.  Rkbabang, this is a beautiful cabin, looks really relaxing.  I wonder if you'll be booked solid in the fall with the leaf peepers.  Also might be close enough to ski resorts that you get a few winter dates too.  Now that I'm thinking about it you really have a year round place.

As a side note have some good friends who moved from PA up to Bedford, NH.  They love it up there.

It isn't quite year round.  The last owners had 0 rentals in May both years they owned it.  They showed me there books and they made a solid profit, the mistake they made was trying to do everything themselves.  They lived 1.5 hours away and drove up themselves to clean it every time, did the lawn themselves, etc.  The only thing they hired someone for was snow removal.   The wife was doing all of this and was just seriously burnt out.   We have already found an excellent house cleaner, who is also taking care of the lawn for us.  Her prices are reasonable (below the $125 cleaning fee we charge each guest). 

Bedford is a great town.  We've been here 8 years and love it.  A great place to live, peaceful suburban setting, yet close to everything.  Manchester is minutes away, the tech areas of Mass (North of Boston) are well within commuting distance, I even know some people who commute into Boston everyday.  Although I wouldn't want to do that, I was just in Boston yesterday and it makes for a long day.   Luckily I only have to do it 4-5 times per year.

rkbabang

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Re: Investing in a vacation rental
« Reply #14 on: August 14, 2019, 07:12:13 AM »
rkbabang,

Looks fantastic, comfy for a family.  ... Disappointed it doesn't come with a goat.

LOL! - But I agree with meiroy, rkbabang,

It really looks fantastic. What a wonderful spot... - I suppose it would be impossible to maintain usual stress levels while taking a break from the hamster wheel at such a place. I especially try to visualize how the place would look in the autumn [the colours of the leaves on the trees in NH in the autumn]... Do you plan to use it yourselves if it's not occupied by tenants? - Good luck with it to your wife and you.

Thanks.  Yes, that area is beautiful in the fall and draws in lots of tourists.  We already have a few people booked the end of September.  We will go up there whenever we get a chance both to do work/maintenance and to enjoy it.  Having the renters pay it off so that we eventually don't need to rent it as often is part of the attraction.  About 4 weeks of rentals will pay the taxes and insurance for the year.

DooDiligence

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Re: Investing in a vacation rental
« Reply #15 on: August 14, 2019, 07:22:31 AM »
You guys did a great job!

I'd take a pontoon boat over a goat.

---

Vacation rentals are starting to look more attractive to me than equities.

1. More thorough knowledge of what you own.
2. More direct control over what you own.
3. Don't have to stare at whipsawed market values every day.
4. Ability to personally enjoy your property.
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Orchard

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Re: Investing in a vacation rental
« Reply #16 on: August 14, 2019, 08:38:00 AM »
Vacation rentals are starting to look more attractive to me than equities.

1. More thorough knowledge of what you own.
2. More direct control over what you own.
3. Don't have to stare at whipsawed market values every day.
4. Ability to personally enjoy your property.
Just take a look at hotel numbers during a downturn and you'll be cured very quickly. I'd rather own stocks that might go down than have to work an entire year to make no money.

rkbabang

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Re: Investing in a vacation rental
« Reply #17 on: August 14, 2019, 08:50:07 AM »
Vacation rentals are starting to look more attractive to me than equities.

1. More thorough knowledge of what you own.
2. More direct control over what you own.
3. Don't have to stare at whipsawed market values every day.
4. Ability to personally enjoy your property.
Just take a look at hotel numbers during a downturn and you'll be cured very quickly. I'd rather own stocks that might go down than have to work an entire year to make no money.

Then again, in a down year you might have more time to enjoy your property yourself.  You can't really enjoy your plummeting stocks.

BTW, I'm not planning to get out of stocks and completely into rental properties, but I think there is a place for this in a portfolio.

FFHWatcher

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Re: Investing in a vacation rental
« Reply #18 on: August 14, 2019, 09:40:54 AM »
I own a cleaning company.  We clean many vacation rentals in SW Florida.  It is very seasonal here.  One thing that an owner of a vacation rental needs to consider more today than 5 years ago, is regulatory risk.  Many communities or towns are passing by-laws that restrict or control short term rentals.  Who wants to buy their dream home next-door to a rental that has new guests every 3 days, 5 days, 7 days, etc.?  Those tenants tend to really 'enjoy' their vacation and it also puts a lot of stress on the house.
Some by-laws will create short term rental 'zones' that may not permit short term rentals, or none less than 7 days or none less than 30 days, etc.  Just something to consider before you buy and something that could affect the value of your investment after you purchase it.  Local permanent residents will put pressure on the local gov't to implement and enforce short term rental by-laws.  Not many people want their next-door neighbor's house to that will basically become a hotel.  For my business, the short term rental market is amazing and the owner always has a spread between what they collect for a cleaning fee and what they payout to the cleaning company/person.

rkbabang

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Re: Investing in a vacation rental
« Reply #19 on: August 14, 2019, 10:06:17 AM »
rkbabang,
success also depends on the reviews, as you probably know.

We just got our first review.  5 - stars in every category.  And she wrote publicly:

"Cutely decorated, comfy, clean, with fully stocked kitchen, bathroom and laundry. Perfect for our family of five to enjoy. The lake is just steps away and house is close to most everything. Great visit! We will be back!"

And then wrote to us privately:

"Private feedback
 This is just for you. It won’t appear on your listing or profile.
Thanks so much for a fabulous stay! We enjoyed our time at the house very much. Every need was thought of. It was clean, stylish, comfy and just perfect for our family. The set up in the entire place was super accommodating. Probably the best Airbnb we’ve ever stayed in. Thanks again! We will be back!
"


Good reviews and repeat customers can't hurt.