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Renting your place in VRBO or Airbnb - experiences
Old 03-08-2017, 04:20 PM   #1
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Renting your place in VRBO or Airbnb - experiences

I did a search for this topic and only found one from 2010 that didn't have much traction.

I was wondering what experiences you have had with renting your home, 2nd home or straight up rental on VRBO and similar sites?

I am thinking of building/buying a home in a vacation getaway next to some highly frequented National Parks. Think it would be good for a second home, but also pay its own mortgage as it could be VRBO'd when not in use. We'd be 3.5-4 hours away.

I have spoken with a couple people who currently have a similar setup, one loves it and claims that they make 3 x the annual amount of the mortgage payment and might be looking to buy more houses to expand. They have a digital key pad on the doors so they can just change the code for each rental via the internet, have a friend who does the cleaning and stocking of toiletry's.

On VRBO you not only pay the nightly rate but a cleaning fee which probably covers the actual cleaning and supplies....

The other home owner said that the partners (they were one of 3 families that went in on the house) didn't like renting it out to strangers and stopped doing it.

I would like a bigger sample size.

If you have any experience with this please share.
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Old 03-08-2017, 04:51 PM   #2
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I don't know the area you are talking about, but we just spend a month in the Southern Utah area which does have a lot of national parks in close proximity.

Things to be aware of, most cities do have laws again doing nightly rentals. So even though people do it, you could run into an issue..
This particular town, St George Utah, has started zoning some areas for nightly rental use. So it's sold as an investment property. Just for giggles, we went to an open house for one new development. So they give you a very inflated nightly rental fee..like 200 bucks a night. We rented a 3 bedroom 3 year old condo for a month for 70 bucks a night. The pitchman said if you rent for 200 a night for 15 days a month you can cover your house payment.

They also have by-laws that say you must use a city licensed rental agency to do all your rentals, so they can be sure all the rules are followed. Since I wasn't born yesterday I asked what kind of fees these companies would charge me. Answer, they usually take 30% off the top, but of course this covers all the expenses for the unit...I would hope so. This would be just the rental fees and cleaning expenses. The actual monthly bills and taxes and condo fees would be the responsibility of the individual owner.

I'm pretty skeptical of someone who says they can collect triple the house payments after all expenses. Don't forget cable, internet. taxes, repairs and stuff like that. IMO you are better off being a renter then an owner.
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Old 03-08-2017, 05:55 PM   #3
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I rent out a vacation home thru a property manager. I picked this option instead of VRBO because it is no work for me - they just cut the check to me every month and take care of everything else. I might make more money if I did it myself, but I just don't feel that it is worth my time right now... The property manager does all the marketing, so I don't have to do any of that either.

Keep in mind that renters may not be as careful as you would. I often find something missing or damaged like broken wine glasses, dings on the drywall, missing blankets, etc..... You have to keep up with stuff like carpet and upholstery cleaning more often than if you alone used the place. Don't forget that you need liability insurance as well in case anyone gets hurt on your property - my resort recommends a $1 million policy - at a cost of $500 year.

I make $$ only because I have no mortgage. 5 - 6 days a month of rental covers my utility bills and HOA and what I rent after that is profit. Where I am at it is seasonal and 3 months of the year I get no rentals and have to cover the monthly expenses from savings that I build up in other months. (January and Feb were occupied 20 days each so big money makers and March will be the same - if I am lucky I might get 2 - 3 days in April/ May or maybe nothing till June.) Keep that in mind as to when you can actually rent the property. Because I am able to use my place on weekdays and have it rented every weekend in the tourist seasons I make $$. Anyone in my area that wants to use their place on weekends and holiday weeks losses money big time.....

If you use the place less that 14 days/year then you can deduct losses on taxes and that could be worth doing if you need a tax reduction. Depreciation can be done over either 27.5 or 40 years depending on what accounting method that you use. The depreciation and use of my vehicle (.54/mile deduction) turned my "profit" to a loss in 2015 for tax purposes.... Not so lucky with that in 2016 though as I only broke even.
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Old 03-08-2017, 06:23 PM   #4
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We usually rent vacation property via Home Away From Home or VRBO sites. Sure most of them are located in desirable areas like Caribbean or Hawaii. Because of competition between renting properties, the prices are more or less affordable. I am not sure what area you want to get into but make sure to check what rent cost there and how frequently (depending on season?) it rents. In the past I had two co-workers who did purchased vacation rentals. One got it on Oahu,HI while other in Las Vegas. The Vegas rental caused only losses while Hawaiian property was doing OK (not great but OK). Good luck.
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Old 03-08-2017, 06:45 PM   #5
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I've been considering doing something like this. My situation is slightly different. In maybe 3 years or so I'm considering buying a place in Portugal as a base to explore Europe from. Owning the property and spending some of the year there would also allow me to claim Portuguese non-habitual resident status which would be very beneficial tax-wise.

Whatever we end up buying we would probably only be using it November through February or March every year while we spend the rest of the year wandering about Europe. So we have thought that renting it out the during that time would be a good idea. Even if it doesn't pay for the whole cost of owning the property it should defray it. I've really only started looking into it and don't have much info.
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Old 03-08-2017, 07:26 PM   #6
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Another thing to consider is if this is a place you will want to keep going back to yourself. Will you get bored with the place after a few years? Also, is it in a popular enough place that you could do a home exchange with someone who would want to come there if you wanted to vacation elsewhere? (My place is at a major ski area that attracts people from all over the world! This week I rode the lift up with some Germans, some Brits, and some Australians....)

My advice is to do a lot of research. You can contact other owners in the area. I was bold enough to email some VRBO listings before I considered buying in my building and asked them about the HOA, rentals, etc.... I got responses from about half of them. I also talked to numerous real estate agents, went to a zillion open houses, and shopped around for over a year before I bought my place. I also rented a couple of times in the area myself to see if it was really the location that I wanted to be at and to experience the services of a couple of property managers from a guests perspective.
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Old 03-08-2017, 10:22 PM   #7
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We had a vacation home for 13 years before we downsized to it. Bend is very popuilar with AirBnB and VRBO. Some neighborhoods are over run with overnighters. These turn into less family neighborhoods and more party central. Bend recently imposed some restrictions. I;m not totally up to speed but I believe there can only be so many within x feet. And some inspections or code language

We rented only once to a friend of our neighbors. Wow. that was awful. They did break some stuff. But they left the house like a rented room at the motel. The maid will get it attitude. Well honky don't play that game. No more. We did "lend it" to some close friends. And they made sure it was clean. We did have to put the kibosh on a friends plan to bring 13 people in. That was the last time there for them

We would not do it again
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Old 03-09-2017, 01:59 AM   #8
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Quote:
Originally Posted by ivinsfan View Post
I don't know the area you are talking about, but we just spend a month in the Southern Utah area which does have a lot of national parks in close proximity.

Things to be aware of, most cities do have laws again doing nightly rentals. So even though people do it, you could run into an issue..
This particular town, St George Utah, has started zoning some areas for nightly rental use. So it's sold as an investment property. Just for giggles, we went to an open house for one new development. So they give you a very inflated nightly rental fee..like 200 bucks a night. We rented a 3 bedroom 3 year old condo for a month for 70 bucks a night. The pitchman said if you rent for 200 a night for 15 days a month you can cover your house payment.

It is in St. George, UT. I have heard of a (semi) recent change where rentals had to be 300 ft away from each other. Supposedly supported by the hotel establishment and that the rental establishment was/is/has been pushing back on that requirement.

Quote:
Originally Posted by KmmFIdreamer View Post

Keep in mind that renters may not be as careful as you would. I often find something missing or damaged like broken wine glasses, dings on the drywall, missing blankets, etc..... You have to keep up with stuff like carpet and upholstery cleaning more often than if you alone used the place. Don't forget that you need liability insurance as well in case anyone gets hurt on your property - my resort recommends a $1 million policy - at a cost of $500 year.

If you use the place less that 14 days/year then you can deduct losses on taxes and that could be worth doing if you need a tax reduction. Depreciation can be done over either 27.5 or 40 years depending on what accounting method that you use. The depreciation and use of my vehicle (.54/mile deduction) turned my "profit" to a loss in 2015 for tax purposes.... Not so lucky with that in 2016 though as I only broke even.
From my VRBO experience, you have to put down a refundable damage deposit, $500-800, I wonder how hard it is to keep $xx for broken or missing items?

Tax deduction might be an added benefit, at least for a few more years.

Quote:
Originally Posted by VFK57 View Post
We usually rent vacation property via Home Away From Home or VRBO sites. Sure most of them are located in desirable areas like Caribbean or Hawaii. Because of competition between renting properties, the prices are more or less affordable. I am not sure what area you want to get into but make sure to check what rent cost there and how frequently (depending on season?) it rents. In the past I had two co-workers who did purchased vacation rentals. One got it on Oahu,HI while other in Las Vegas. The Vegas rental caused only losses while Hawaiian property was doing OK (not great but OK). Good luck.
I will have to try and find out an average occupancy rate. Besides the one I asked, they claim to have to turn people away esp. during the peak dates of Holiday weekends, Zions and Bryce Canon peaks, soccer tournaments, etc. He's in partnership with his brother and between the two of them only use the house for personal time about 6 weeks of the year.


Quote:
Originally Posted by KmmFIdreamer View Post
Another thing to consider is if this is a place you will want to keep going back to yourself. Will you get bored with the place after a few years? Also, is it in a popular enough place that you could do a home exchange with someone who would want to come there if you wanted to vacation elsewhere? (My place is at a major ski area that attracts people from all over the world! This week I rode the lift up with some Germans, some Brits, and some Australians....)

My advice is to do a lot of research. You can contact other owners in the area. I was bold enough to email some VRBO listings before I considered buying in my building and asked them about the HOA, rentals, etc.... I got responses from about half of them. I also talked to numerous real estate agents, went to a zillion open houses, and shopped around for over a year before I bought my place. I also rented a couple of times in the area myself to see if it was really the location that I wanted to be at and to experience the services of a couple of property managers from a guests perspective.
We go to St. George every blue moon, not a key destination (we don't golf) but it is a good stopping point on the way to Vegas, Cali, etc.

If I was retired, maybe we'd spend more time there, but not in the Summer, it's too hot for us. I could imagine spending a few weeks to a month in the Winter there when it is a balmy 60 degrees. Even visiting Bryce and Zions more in depth.

Quote:
Originally Posted by Scrapr View Post
We had a vacation home for 13 years before we downsized to it. Bend is very popuilar with AirBnB and VRBO. Some neighborhoods are over run with overnighters. These turn into less family neighborhoods and more party central. Bend recently imposed some restrictions. I;m not totally up to speed but I believe there can only be so many within x feet. And some inspections or code language

We rented only once to a friend of our neighbors. Wow. that was awful. They did break some stuff. But they left the house like a rented room at the motel. The maid will get it attitude. Well honky don't play that game. No more. We did "lend it" to some close friends. And they made sure it was clean. We did have to put the kibosh on a friends plan to bring 13 people in. That was the last time there for them

We would not do it again
The thing I noticed with VRBO, et al is that everyone charges a damage deposit, cleaning fee, and if there is a pool on premises, a pool heating/cleaning fee?!? I can only assume that the $185 cleaning fee covers the cleaning and replacement of the toiletries, the deposit would be to help cover damages, not sure how down to the penny you can be, i.e. have an inventory of high theft/breakage items every change of renter?

We would plan on a stand alone house, not a condo, maybe 5 bedroom (two of them as master bedrooms) sleeping up to 10 people possibly have a pool and be in the $300-350 per night range. It would be geared more towards large families or multiple families and that would hopefully cut down on the 'drunken party atmosphere' that we wouldn't want?
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Old 03-09-2017, 05:49 AM   #9
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Quote:
Originally Posted by Ronnieboy View Post
It is in St. George, UT. I have heard of a (semi) recent change where rentals had to be 300 ft away from each other. Supposedly supported by the hotel establishment and that the rental establishment was/is/has been pushing back on that requirement.







From my VRBO experience, you have to put down a refundable damage deposit, $500-800, I wonder how hard it is to keep $xx for broken or missing items?



Tax deduction might be an added benefit, at least for a few more years.







I will have to try and find out an average occupancy rate. Besides the one I asked, they claim to have to turn people away esp. during the peak dates of Holiday weekends, Zions and Bryce Canon peaks, soccer tournaments, etc. He's in partnership with his brother and between the two of them only use the house for personal time about 6 weeks of the year.









We go to St. George every blue moon, not a key destination (we don't golf) but it is a good stopping point on the way to Vegas, Cali, etc.



If I was retired, maybe we'd spend more time there, but not in the Summer, it's too hot for us. I could imagine spending a few weeks to a month in the Winter there when it is a balmy 60 degrees. Even visiting Bryce and Zions more in depth.











We would plan on a stand alone house, not a condo, maybe 5 bedroom (two of them as master bedrooms) sleeping up to 10 people possibly have a pool and be in the $300-350 per night range. It would be geared more towards large families or multiple families and that would hopefully cut down on the 'drunken party atmosphere' that we wouldn't want?


This set up sounds like more of a drunken party risk than a small condo. College kids love big houses like this! Sleeps 10 (they'll sneak in an extra few) for $350/night -- party time! The bigger the house, the more people can legally be there, the more likely a party will break out.

Not to say you won't get family groups. We've had a few family reunions that required two large houses to accommodate 25 people. We will good renters. But a house full of 20-25 year olds may not be.
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Old 03-09-2017, 06:21 AM   #10
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I suggest you start spending some time in SGU.

All of the new properties zoned for nightly rentals are either condos or duplexes no stand alone houses. Can you get zoning approve for other areas?,it's my impression they are cutting down on the nightly rental game.Don't assume you can rent anyway. We rented 10 years ago in a non zoned neighborhood where the owners were in residence in the upper floor unit and they got busted by the neighbors who didn't like the traffic and people they didn't know using the pools and facilities.

SGU has too many non-peak times IE, mid Nov-before Christmas and then Jan until Presidents Day. and don forget the boiling hot July-August time frame.

We stayed from mid-Jan until Friday of Presidents Day weekend and I had multiple owners recontacting me on VRBO lowing their prices with each email.Presidents Day weekend is probably the busiest weekend of the year, but that's 4 days worth of bookings. The owner I worked with got a 250 dollar damage deposit and that's more common in that area then your 750 dollar number. Someone will come in and clean your unit when the renter leaves and they just eyeball the place for damage. A 185 dollar cleaning fee? my cleaning got thrown in for free. A five bedroom home will require at least 5 nice TV's all hooked up to cable...and a minimum of 3 and 1/2 baths.

You want to have a private pool, you better have millions in liability insurance for that one. Private pools are almost unheard of in that area. After doing a few open houses the size property you are talking about with a pool is going to run you at least 425K and that's probably on the low end. And FYI, the Utah property tax rate on a non residential home is double the tax on your personal residence.

If after reading the above you are still interested, I'm not sure why you think a 5 bedroom home with a pool wouldn't be a party palace. IMO the sweet spot appears to be a 3 bedroom home with at least 2 nice bathrooms. Enough for 2 adults couples, or a family with several children. I saw a 4 bedroom condo rented by 4 adults and 7 small children...I think the oldest child was about 8....

Take a good look at the SGU,Ivins, Hurricane, Washington area and all the new construction and all the land prep for new developments and resign yourself to the fact there won't be much upside for appreciation in your new home.
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Old 03-09-2017, 09:09 AM   #11
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We own two beach condos that we rent via VRBO. We don't use an outside management company so we take care of everything (except cleaning) ourselves. We've been very pleased with VRBO although we don't agree with some of their decisions (e.g., service fees).

We tried using AirBnB last year and actually had one booking through them. However, we didn't feel comfortable with their setup (for hosts) and felt like they favored the travelers more so than the hosts. For example, we require guests to review and e-sign our rental agreement before we accept their reservation request on VRBO. This was neither easy nor straightforward to do on AirBnB. Bottom line: It felt like a pain in the rear to use AirBnB as a host so we dropped them.

Someone mentioned the different charges on VRBO. We charge a $90 cleaning fee (our cleaning person charges us $85) and we require a $150 damage deposit for one condo and $200 deposit for the other condo. In two years, we've never had to keep anyone's damage deposit. (Knock on wood)

The biggest challenge for us in managing our condos is keeping the youngsters (< 25 yrs old) from renting them (or their parents renting them for their high school & college kids) during spring break season. But it appears we've figured that out now by simply stating in our communications that guests must be 25 years or older to rent and to e-sign our rental agreement.

Overall, we've been very happy vacation rental owners so far. We'd love to have one or two more.

P.S. We also tried usinig Flipkey (Trip Advisor) but that only got us lots of inquiries and no bookings so we dropped them also.
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Old 03-09-2017, 12:36 PM   #12
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