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Vacation Rentals
Posted on 5/18/20 at 5:53 am
Posted on 5/18/20 at 5:53 am
Got a great deal on a cabin in Tennessee for 4th of July weekend and got me thinking about the market as a whole.
How many vacation rental owners are going to be able to weather the downturn though, might pull the trigger on a vacation home if enough are selling.
How many vacation rental owners are going to be able to weather the downturn though, might pull the trigger on a vacation home if enough are selling.
3
Posted on 5/18/20 at 7:50 am to TopFlightSecurity
We have an offer for the same. A few weeks to choose from, due to massive cancellations.
Posted on 5/20/20 at 10:14 pm to FlyinTiger93
Thinking same thing. Has to be a tough time for many people who are leveraged.
Posted on 5/21/20 at 3:54 am to NAsh-vegas Tigah
The only rental property I would consider would be vacation rentals. I wouldn't want to deal with regular tenants.
Posted on 5/21/20 at 6:16 am to TopFlightSecurity
I have 3 short term rental properties in Florida and I was concerned for a moment but with the exception of 1 week in July, all 3 are fully booked through the first week of August.
I lost out on spring break (about 3 weeks) and about 16 days in early May but most rebooked for September and October.
I lost out on spring break (about 3 weeks) and about 16 days in early May but most rebooked for September and October.
Posted on 5/21/20 at 6:41 am to TopFlightSecurity
I hate this for the small one or two house rental owners. Airbnb and vrbo have been the best thing ever to happen for access to unique and fun places to stay outside of hotels. I had a booking for a cabin in VA in June and got to talking with the guy when I had to cancel, he’s way underwater on one place and looking at foreclosure
I realize that it’s risky to depend on rent to pay a note but if he didn’t that cabin likely wouldn’t be available for me and others to enjoy.
that said, I look at zillo every day for the areas I’d consider buying in.
you never know what could happen
I realize that it’s risky to depend on rent to pay a note but if he didn’t that cabin likely wouldn’t be available for me and others to enjoy.
that said, I look at zillo every day for the areas I’d consider buying in.
you never know what could happen
Posted on 5/21/20 at 8:54 am to cgrand
Vacation rentals have never had huge returns outside of appreciation. You are lucky to get 10% and most are getting 2-5% after management fees and expenses. If you have a mortgage you are barely breaking even.
Add to that interest rates are incredibly low right now. So anyone that is in a major situation right now was horribly over leveraged to begin with.
A huge portion of vacation rentals are purchased with cash or with a large down payment. Vacation rentals are a way to afford the expenses of a 2nd home while getting a small return for most people. That's not everyone and there are certainly plenty of people that are leveraged. But I wouldn't plan on it being a huge percentage. I'd be ready to pounce quickly if you are serious.
Add to that interest rates are incredibly low right now. So anyone that is in a major situation right now was horribly over leveraged to begin with.
A huge portion of vacation rentals are purchased with cash or with a large down payment. Vacation rentals are a way to afford the expenses of a 2nd home while getting a small return for most people. That's not everyone and there are certainly plenty of people that are leveraged. But I wouldn't plan on it being a huge percentage. I'd be ready to pounce quickly if you are serious.
Posted on 5/21/20 at 8:59 am to armsdealer
quote:
I wouldn't want to deal with regular tenants.
if you knew anything about RE you don't have to deal with tenants.
Posted on 5/21/20 at 9:37 am to baldona
quote:
A huge portion of vacation rentals are purchased with cash or with a large down payment. Vacation rentals are a way to afford the expenses of a 2nd home while getting a small return for most people.
This is how we started.
When I was 20 my grandmother left me and my brother her home. Nothing huge, we ended up with 65k each. He blew it on a new truck and toys, I paid cash for a 2 bedroom condo in Destin. Several years later I flipped that 2 bedroom for (2) duplexes across the street from the beach. Ended up flipping those for house in Seagrove and a condo in Destin. Cashed out in 05.
The prices were so low in 07 I couldn’t resist getting back in. Bought (2) 3 bedroom condos in foreclosure. Original purchase price was 690k each and I got them for 289k and 310k. Paid cash for those and 2 years later I bought a 3 bedroom home.
All properties are paid for except the fourth home which is our vacation home and not a rental. Just refinanced the vacation home with a 15 year note and the other properties pay more than 100% of that.
If shite hits the fan, worst case is I cover the mortgage on then vacation house. I could also pull them from the management company and pocket more cash, but right now, it’s worth it to have them deal with the BS.
This post was edited on 5/21/20 at 9:38 am
Posted on 5/21/20 at 9:44 am to SippyCup
That’s awesome!
I know the last three years have been very good for the beach rentals. I hope y’all have a good rest of this year
I know the last three years have been very good for the beach rentals. I hope y’all have a good rest of this year
Posted on 5/21/20 at 1:42 pm to baldona
Very accurate. I may end up selling my condo today as a matter of fact. Best to buy these when the market is down
Posted on 5/23/20 at 5:03 pm to SippyCup
quote:
. I could also pull them from the management company and pocket more cash, but right now, it’s worth it to have them deal with the BS
What’s a ballpark % of the gross rent? Is the fee all variable or is there a monthly fixed rate?
Posted on 5/23/20 at 10:34 pm to pjab
Percentage of bookings
Posted on 5/25/20 at 5:31 pm to pjab
quote:
What’s a ballpark % of the gross rent? Is the fee all variable or is there a monthly fixed rate?
The company we use has several different fee structures.
The one we chose is 15% of gross rents, they can go as high as 30. Under this plan they do no advertising. We have a large percentage of repeat renters so we don’t have the need for advertising.
They will also make repairs and general maintenance for an outrageous fee so we choose to handle those ourselves whether it’s me doing it myself or making a phone call to have it taken care of.
The 15% is worth it to not have to deal with bookings, cancellations, credit card fees, etc.
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