Author Topic: Buying vacation homes in the US  (Read 7449 times)

rkbabang

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Re: Buying vacation homes in the US
« Reply #80 on: August 13, 2020, 06:46:23 AM »
Do you guys know if buying a vacation home in San Diego may work out better than FL? I am concerned with FL's hurricane problems.
Does anyone own a vacation home that you use airbnb to rent it out during times that you don't live there?

I own a vacation home that I rent out most of the time.  I've owned it almost exactly a year.  I used it about 4 weeks in the last year and rented it out 194 days of the last 12 months. It has paid for the mortgage, taxes, insurance and all bills + about $15K extra.

The bad news is that I put $100k down on it and spent about $40k on one time improvements.  But the house is pretty much the way we want it now and almost everything has been fixed, redone, or replaced, so unless something breaks the one time costs should be very little per year going forward.  Also we have started to increase our prices and have not had a hard time getting bookings, so we should be able to push that $15K extra up to $20k or more.

Some thoughts about doing this is that you need a good local person you can trust.  We found someone before we even bought the house.  She owns a cleaning business and lives 5min from the house.  She cleans in-between guests, does the linens, takes care of the lawn/landscaping, takes the trash to the transfer station, fills propane tanks when they need it, shovels snow in the winter, and will go to check on the house or help guests with anything that comes up.   I don't know how we would manage it without her or someone like her.  I would be constantly driving there to take care of things.  Also, make sure the house is in good condition or you realistically assess what it will cost you to put it in good condition.  I said above that we put $40k in improvements and that was with us doing 90% of the work ourselves.  If we couldn't have stayed there and worked on it ourselves that would have been twice the costs.

Our plan is to pay off the mortgage in under 8-10 years by putting excess money from airbnb rentals into the principle.  Then when we are older it will produce income or maybe someday when I retire we will sell our main house and live there.  We love the area, it has a great beach and it is on the prettiest part of Lake Winnipesaukee.

Good luck with your search.  And BTW if you are ever looking to stay on Lake Winnipesaukee:  http://airbnb.com/h/TheBungalowAtSmithPoint

Thank you! This is really interesting story! Would you say this investment is essential the equivalent of buying a residential REIT at book value? If you can make the choice again, would you buy this property or would you buy some residential REIT stocks?
I see some residential REITs trading way above book and some trading way below book. But I understand that the book value can go down as depreciation though the actual property value goes up.

I don't have trusted persons outside of Seattle. I wonder if buying beach condos make more sense in my case? The HOA will take care of most issues and I just need to find a cleaner who can do interior work.

Do you have actual experience owning a condo where "the HOA will take care of most issues"?

I've owned a significant number of condos and I've found that while that may be true for big stuff (roof leaks or similar) often if I want my space repaired quite a bit of my involvement is required. And many of the issues involved with owning a condo (appliances, etc) aren't HOA issues.

I think renting by the night is likely to add more issues (what will you do when someone calls that the wi-fi isn't working?). Likely that's just user error, but still needs to be dealt with.

I agree with the poster above that having a trustworthy on-the-ground person is the number one factor to succeeding in that market.

The way we found our property cleaning person/care taker was to just start interviewing people when we were still just considering putting in an offer on the house.   We found someone we felt comfortable with and 2 backups.  Our instincts were correct as the person we felt most comfortable with in the interviews was the one that worked out the best.  She has been great.  The other 2 only did a few cleanings for us and didn't work out so well.  We are still looking for another backup cleaning service and have had trouble finding a good/reliable one.  One time this summer while my usual cleaning person was on vacation the backup just didn't show up.   My wife had to go and do the cleaning with very little time to do it by the time she got there (we are about an hour and 15min drive away.)   And yes, little things happen all the time that requires someone local to deal with.  The latest was our smart lock got jammed and wouldn't open for the guest.  Our care taker was able to swing by and open it with the key and then it just started working after that.  That would have been almost 3 hours of driving if we didn't have a local person to call.


gfp

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Re: Buying vacation homes in the US
« Reply #81 on: August 13, 2020, 07:00:51 AM »
Yes I second everything rkbabang says here.  I don't know why, but it has been ridiculously hard to find good, reliable cleaning / staging people to handle AirBnB flips.  I guess we just have high standards.  Every person we have hired to flip AirBnB units has not been re-hired.  A 100% failure rate.

One of the issues in my market (back when New Orleans had a tourism industry at least) is that the good cleaning/staging people are all needed at essentially the exact same time across the city.  Between 11pm and 3pm and there is usually zero flexibility on that.  You basically have to show up before noon or the place won't be ready in time for the next guests.  And that's if nothing "unexpected" occurs.

LC

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Re: Buying vacation homes in the US
« Reply #82 on: August 13, 2020, 07:32:48 AM »
Good help is hard to find. A tale as old as time.
"Lethargy bordering on sloth remains the cornerstone of our investment style."
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Jurgis

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Re: Buying vacation homes in the US
« Reply #83 on: August 13, 2020, 08:07:17 AM »
And this is why I deeply hesitate to own RE 3-6-12 hours away.
"Human civilization? It might be a good idea." - Not Gandhi
"Before you can be rich, you must be poor." - Nef Anyo
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Gregmal

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Re: Buying vacation homes in the US
« Reply #84 on: August 18, 2020, 09:56:56 AM »
https://www.yahoo.com/news/florida-keys-spot-one-best-130000496.html

Dives moderately into the numbers on rental income

villainx

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Re: Buying vacation homes in the US
« Reply #85 on: August 18, 2020, 11:31:10 AM »
Yes I second everything rkbabang says here.  I don't know why, but it has been ridiculously hard to find good, reliable cleaning / staging people to handle AirBnB flips.  I guess we just have high standards.  Every person we have hired to flip AirBnB units has not been re-hired.  A 100% failure rate.

One of the issues in my market (back when New Orleans had a tourism industry at least) is that the good cleaning/staging people are all needed at essentially the exact same time across the city.  Between 11pm and 3pm and there is usually zero flexibility on that.  You basically have to show up before noon or the place won't be ready in time for the next guests.  And that's if nothing "unexpected" occurs.

It's also issue of scale.