Anyone own a vacation rental?

[brewer12345]

I stumbled across a seemingly inexpensive cabin that has a history as a vacation rental and am toying with the idea. Has anyone done this? Painful experience, or will this work as an investment proposition? The property in question is about 3 hours away from my home, so I would need a local property manager. The property is near a 4X4 offroading trail of some repute and a national landmark that draws a lot of visitors each year. With my penciled in estimate of expeses and giving up 15% of revenue to the property manager, I estimate break-even is around 30 days of paid rental based on the rate charged by the only other rental property I can find nearby.

[omni550]

brewer,

I'm currently away from home so I don't have access to my bookshelf.

A while ago I read a book that calculated 17 weeks of income from a rental property as the 'break even' point.

I seem to recall that it might have been this book.... http://http://www.amazon.com/Rent-Va...5290565&sr=1-1

omni

[jimnjana]

Quote:

Originally Posted by brewer12345 I stumbled across a seemingly inexpensive cabin that has a history as a vacation rental and am toying with the idea. Has anyone done this? Painful experience, or will this work as an investment proposition? The property in question is about 3 hours away from my home, so I would need a local property manager. The property is near a 4X4 offroading trail of some repute and a national landmark that draws a lot of visitors each year. With my penciled in estimate of expeses and giving up 15% of revenue to the property manager, I estimate break-even is around 30 days of paid rental based on the rate charged by the only other rental property I can find nearby.

We have two vacation rentals, one by design one by default. We advertise both properties ourselves by listing on VRBO, Homeaway, and vacationrentals websites. You do not need to have a "property manager". But, what you do need to have is someone to clean the place and someone to do any "emergency" maintenance. We live 9 hrs away from our properties. Property Management Services are generally not worth it. I'd recommend you look on the sites I mentioned and try to find any other vacation rentals in your area. Call the owner and talk to them about their experience. Most owners are more than willing to take a few minutes to talk to you. You can likely line up a cleaning person and maintence person this way, or at least find a few people you can interview.

[Nords]

Quote:

Originally Posted by brewer12345 Painful experience, or will this work as an investment proposition?

Yes.

The biggest issues are the casualties: property manager pockets the rent instead of telling you, or the partying renters trash the place, or the infrastructure breaks down through a combination of maintenance neglect and lack of daily familiarity with its trouble signs.

In almost every situation where we've found a good investment property that we'd use as a vacation place, we've been able to rent via VRBO or AirBNB for much less hassle. And with that system, we can go anywhere we want instead of feeling obligated to "use the damn vacation home-- again"...

[brewer12345]

Quote:

Originally Posted by Nords Yes. The biggest issues are the casualties: property manager pockets the rent instead of telling you, or the partying renters trash the place, or the infrastructure breaks down through a combination of maintenance neglect and lack of daily familiarity with its trouble signs. In almost every situation where we've found a good investment property that we'd use as a vacation place, we've been able to rent via VRBO or AirBNB for much less hassle. And with that system, we can go anywhere we want instead of feeling obligated to "use the damn vacation home-- again"...

Pretty much my base position. Just toying with the idea, really.

[jayc]

In your situation I would look into Ski rentals around Summit County for the highest return. There are 2 bd condos available for under 200K in Dillon, Silverthorne, Frisco. Closer to the slopes the better, ski in and/or ski out even better. Going skiing with the family ranks very high on my pleasure list. Keystone and Copper are probably cheaper than Breck. You want a high traffic area with a lot of potential renters. IMO any time you have short term renters you are going to need property management.

If your primary goal is 'you want to use the cabin' and secondary is the rental income, then don't own, just rent. There is a lot less hassle in your life and you have the flexibility to find another place next year in another great location. There are tons of them out there west and southwest of Denver.

[BTravlin]

I would also recommend having a property manager. Who is your renter going to call when the refrigerator stops running? Or the water heater bursts? Where does your renter pickup and return the house key? Who checks your place for damage after the renter leaves? They do cost but a good one is worth it.

And keep in mind the amount of time you will spend answering inquiries about availability and rates. Takes way more time than I had expected. Some real Chatty Cathy's out there.

My accountant says many of his clients have vacation rental properties spread out across the country and some international as well. He says very few turn a profit unless they are paid for.

And with the current economy there is a lot of competition among the various properties in a given area. Most are not getting rack rates right now even during prime weeks.

I've owned my condo for just under two years now and am breaking even on it but I have no mortgage. A little better than I expected given the economy but I bought it for retirement and not as a profit maker. I wanted the rentals to cover the costs until we can move there in a couple more years and so far so good.

[jimnjana]

Quote:

Originally Posted by BTravlin I would also recommend having a property manager. Who is your renter going to call when the refrigerator stops running? Or the water heater bursts? Where does your renter pickup and return the house key? Who checks your place for damage after the renter leaves? They do cost but a good one is worth it. And keep in mind the amount of time you will spend answering inquiries about availability and rates. Takes way more time than I had expected. Some real Chatty Cathy's out there. My accountant says many of his clients have vacation rental properties spread out across the country and some international as well. He says very few turn a profit unless they are paid for. And with the current economy there is a lot of competition among the various properties in a given area. Most are not getting rack rates right now even during prime weeks. I've owned my condo for just under two years now and am breaking even on it but I have no mortgage. A little better than I expected given the economy but I bought it for retirement and not as a profit maker. I wanted the rentals to cover the costs until we can move there in a couple more years and so far so good.

We do not use a property manager, but we do have people we trust who are available to assist. The problem with property managers is that they are property managers, they manage more than your property so they never pay the attention to your property that you would. We use a lock box for one home and a key less entry for the other. We provide the access information after the guest has paid in full. We use the online reservation management email system with homeaway so are phone calls are minimal. Online payment makes it easy to track payment status.