Do you own/would you buy a vacation rental?

[Wildcat]

Dh and I have talked for several years about buying a beach condo or log cabin vacation rental.

 

Does anyone have any insights (good and/or bad) to share?

 

 

I have started a separate thread about the pros and cons of owing regular rental houses here  http://forums.welltrainedmind.com/topic/494963-would-you-buy-a-house-to-rent/ .

[gardenmom5]

no.

[Wildcat]

no.

 

LOL. Right to the point!

 

Don't be shy .... why not? :bigear:

[Chelle in MO]

We do not and would not.  We want more flexibility and less hassle than what we've seen of vacation rentals.

[Dandelion]

We've considered buying property in a vacation destination (we've looked at properties in/around Colorado ski resorts and have also considered beach front property in Florida).  A few of my friends are in the rental property business so I know the headaches that can bring.  We might rent out the property, or we might just decide to hire someone to check on it occasionally for us but not rent it out. If we don't need the cash flow, we'll probably just keep it for ourselves and forgo the rental hassles. 

[Carrie12345]

We have considered *maybe* turning our home into a vacation rental when finances permit.

It does seem like a giant pain in the butt to me, but we love our house. It just isn't the best full-time house for us.

 

I've seen the rental process up close through many, many landlords in our community, both long-term rentals and vacation rentals. The majority of the problems come from the long-term, not the vacationers. I don't think anything could tempt me to take on full-time tenants.

[elfgivas]

no.

1. we are bad at all the things a rental requires (routine, follow thru, paperwork, money....)

2.  our schedule is unpredictable.  we need to be able to go at the last moment.

3.  i'm happy to rent from someone who has time they can't use.

4.  i have enough trouble keeping one house repaired and acceptable.  two houses is right out.

5.  if i have that kind of money, i'd like to go to europe this year, to australia the year after, etc, etc.

 

i actually can't imagine why folks do it?  could you say more about why you are considering it?

ann

[lavender's green]

DH and I have vaguely considered it.  We live 2 hours away from a nice mountain destination area, and 5 hours away from a nice beach one.  We both think it would be awesome to have a second home for when we feel like a weekend getaway, and/or retire to one of those areas (we're in our 20s so that's a long way off!).  DH and I are introverts, and travelling to new places is more stressful (in a good way, but still stressful!) than relaxing, and we'd prefer to return to the same old familiar place for the majority of our vacations.  But...how to finance it?  We've toyed with the idea of buying a place with a loan, and renting it out to vacationers until it's payed off.  But, realistically, I don't know if we're the right type of people to handle all the paperwork and repairs, etc. - and anways, we're not in a financial position to do that yet!

[Pawz4me]

I wouldn't do it, but I have very good friends who own a rental house on the Outer Banks.  They have a management company handle everything for them, and seem to do very well.  I know the house was booked the entire summer.

[Happy]

I looked into buying a vacation rental this summer. We rented a terrific condo for our family...since traveling like that is a good way for our grown family to gather, we are considering finding something in the future. In this case, we would use a management company since we are several hours away.

 

The benefit is that someone else is paying the mortgage on your fun property. We could mark off several weeks of the year for our own use and leave it open for others the rest of the time. If what I've learned is accurate, after a few years you get more and more repeat renters. You know they treat your home right, they know its a great place to stay. Win/win.

 

I consider rentals a business...and would approach a vacation rental in a very business like manner. It has helped that we have rented condos and cottages in several states as well as various places in Europe.

[gardenmom5]

LOL. Right to the point!

 

Don't be shy .... why not? :bigear:

the list is long.

 

for starters - they are a rip off.  I've been to several presentations, including the "come stay here and listen to us".  the former car salesmen didn't realize we read between the lines when he told the story how his former car salesmen buddy told him to stop selling cars, and come sell the vaca-condos (re:  time-shares.  re: it's MORE profitable.)

have you ever perused the want ads for people trying to sell their timeshare?  there are a lot.

when I travel - I want to see the places I'm visiting - not stay in some secluded resort where everything is artificial. 

 

 

I've known people who do - and they are stuck going to the same place for years.  they have a lot of hassle if they want to go somewhere else.

 

eta: my daughter is in process of buying the entire contents of someone's 2bed vaca condo.  they didn't have many rentals in five years, and they didn't use it that much either.

[Happy]

the list is long.

 

for starters - they are a rip off.  I've been to several presentations, including the "come stay here and listen to us".  the former car salesmen didn't realize we read between the lines when he told the story how his former car salesmen buddy told him to stop selling cars, and come sell the vaca-condos (re:  time-shares.  re: it's MORE profitable.)

have you ever perused the want ads for people trying to sell their timeshare?  there are a lot.

when I travel - I want to see the places I'm visiting - not stay in some secluded resort where everything is artificial. 

 

 

I've known people who do - and they are stuck going to the same place for years.  they have a lot of hassle if they want to go somewhere else.

 

Buying a house or a cabin or a condo is way different than a time share. Blech. No way. No how.

 

We often rent places to vacation....try browsing homeaway.com or Vacation Rentals by Owner...

[Carrie12345]

the list is long.

 

for starters - they are a rip off.  I've been to several presentations, including the "come stay here and listen to us".  the former car salesmen didn't realize we read between the lines when he told the story how his former car salesmen buddy told him to stop selling cars, and come sell the vaca-condos (re:  time-shares.  re: it's MORE profitable.)

have you ever perused the want ads for people trying to sell their timeshare?  there are a lot.

when I travel - I want to see the places I'm visiting - not stay in some secluded resort where everything is artificial. 

 

 

I've known people who do - and they are stuck going to the same place for years.  they have a lot of hassle if they want to go somewhere else.

 

eta: my daughter is in process of buying the entire contents of someone's 2bed vaca condo.  they didn't have many rentals in five years, and they didn't use it that much either.

I don't think that is what the OP was talking about at all. (???)

[Wildcat]

I don't think that is what the OP was talking about at all. (???)

 

Correct. No timeshares. I know better than that. :lol:

 

I am talking about a cabin in the woods, or a condo on the beach, or a ski chalet in a vacation destination purchased by us, and us alone. :001_smile:

[Wildcat]

We've considered buying property in a vacation destination (we've looked at properties in/around Colorado ski resorts and have also considered beach front property in Florida).  A few of my friends are in the rental property business so I know the headaches that can bring.  We might rent out the property, or we might just decide to hire someone to check on it occasionally for us but not rent it out. If we don't need the cash flow, we'll probably just keep it for ourselves and forgo the rental hassles. 

 

I'm beginning to think the headaches and hassles aren't worth it. My research results are disappointing, so I was hoping for positive stories here. :tongue_smilie:  

 

no.

1. we are bad at all the things a rental requires (routine, follow thru, paperwork, money....)

2.  our schedule is unpredictable.  we need to be able to go at the last moment.

3.  i'm happy to rent from someone who has time they can't use.

4.  i have enough trouble keeping one house repaired and acceptable.  two houses is right out.

5.  if i have that kind of money, i'd like to go to europe this year, to australia the year after, etc, etc.

 

i actually can't imagine why folks do it?  could you say more about why you are considering it?

ann

 

We are fine with paperwork (I love it.... strange, I know) and follow through stuff.

 

Last moment trips don't work for us right now, but that might be an issue in the future if we have to work around bookings. We normally don't travel during peak/busy times, though.

 

Repair work/cleaning would be outsourced, as any location would be a minimum of four hours (and at least one state!) away.

 

Europe/Australia.... I don't like to fly, but I hear you on those locations!! Once teleportation is available, I'm *so there*!! :thumbup:

 

Why do folks do it? Financial gurus talk about real estate being a great investment. The "big guys" often own rental properties, so it can't be all bad.

 

Why are we considering it? Immediate: tax break.  Future: passive income.  Bonus: a place that is "ours" to visit.

 

 

I wouldn't do it, but I have very good friends who own a rental house on the Outer Banks.  They have a management company handle everything for them, and seem to do very well.  I know the house was booked the entire summer.

 

I contacted a management company and asked for specifics in their gated area. 40% of gross rent income. HOA fees, advertising fees, pool fees, monthly maintenance fees--- total, it is close to $1,000 per month once you throw in taxes, utilities, internet, etc. We computed, and we would have to gross $40K each year just to break even.... and that's not including a mortgage.  That is scary.

 

I looked into buying a vacation rental this summer. We rented a terrific condo for our family...since traveling like that is a good way for our grown family to gather, we are considering finding something in the future. In this case, we would use a management company since we are several hours away.

 

The benefit is that someone else is paying the mortgage on your fun property. We could mark off several weeks of the year for our own use and leave it open for others the rest of the time. If what I've learned is accurate, after a few years you get more and more repeat renters. You know they treat your home right, they know its a great place to stay. Win/win.

 

I consider rentals a business...and would approach a vacation rental in a very business like manner. It has helped that we have rented condos and cottages in several states as well as various places in Europe.

 

We are looking at this from a business/financial standpoint, so yes, that helps. Do the repeat renters really happen, though? When we travel, we often stay in various locations, so we wondered if others do the same, or if we are strange. Maybe when people find something that suits them, they go back?

 

the list is long.

 

for starters - they are a rip off.  I've been to several presentations, including the "come stay here and listen to us".  the former car salesmen didn't realize we read between the lines when he told the story how his former car salesmen buddy told him to stop selling cars, and come sell the vaca-condos (re:  time-shares.  re: it's MORE profitable.)

have you ever perused the want ads for people trying to sell their timeshare?  there are a lot.

when I travel - I want to see the places I'm visiting - not stay in some secluded resort where everything is artificial. 

 

 

I've known people who do - and they are stuck going to the same place for years.  they have a lot of hassle if they want to go somewhere else.

 

eta: my daughter is in process of buying the entire contents of someone's 2bed vaca condo.  they didn't have many rentals in five years, and they didn't use it that much either.

 

Thank you. Those timeshare presentations are awful, aren't they? As has been pointed out, that isn't what I am talking about, but thanks for your thoughts/warnings on them.

 

And just to clarify, the areas we are looking at aren't resorts--- they are cabins and houses in subdivisions that may or may not have pools. The condos we like aren't a resort condo, but a regular, old-fashioned condo with a pool and a balcony overlooking the beach. We, too, don't like 'resorts'. I'm not a 'massage' or a 'order a cocktail by the pool and have it delivered to me by a waiter' kind of gal. :D

 

With regards to your eta: We would probably use it less than two weeks for a few reasons.... one, because we like to visit other places, but also because of tax rules and to leave it available for renters. Because of the low usage potential, it does seem to be a big headache.... :thumbdown:

 

[Mom2TheTeam]

I replied to your other thread.  :)

 

We are purposeful real estate investors. 

 

No, I would not buy a vacation rental for many reasons.  We were even told by an agent at a location we were looking at buying in not to do it to make money or be an investment.  Those properties are beat up and tough to manage.  He told us the only reason you should buy a vacation rental is if you want to own your vacation home.  Otherwise, they rarely actually make money.  I would not own a vacation rental. 

 

(I knew you didn't mean timeshares and I'm not talking about those either...I wouldn't buy a property that you own as your own to rent out to vacationers. ;))

[Ripley]

We own two condos in destination cities. 

 

We use VRBO, mentioned up-thread by Happy, for the one in Hawaii. Repeat customers are our bread and butter. We ended up buying because my husband and his family had been repeat customers for decades.  Soon we'll inherit a condo on another island, and we plan to convert it into a vacation rental as well. Other units in that building pool together so that there is always a unit available, even if your specific one is not.

 

We started off using VRBO for the one in Arizona but it didn't drive much business. Nowadays we contract out as a short-term for business execs, but if the unit is empty during spring training or the big bowl game we advertise it as a vacation rental. What's been interesting is the number of people from our AZ unit who have been pleased enough with the product to also visit our HI unit.

 

We did have months of worry with the HI unit the year following 9/11 when the tourism industry took a hit. We borrowed money from our other properties to pay the mortgage, but without those it would've had to come out of personal funds. I worried about bookings due to a lag in travel when airport security became so invasive, but we didn't really see it in HI. Definitely have a plan for the mortgage because the tourism and transportation industries can change on a dime. Depending on the location, also account for weather expenses also - damage, reduced travel, etc. I keep current on airline business since it drives most of my HI traffic; I keep up on government contracts, aerospace news, and university happenings because it drives most of my AZ traffic. My best advice: know your area, know your people, and know how your people will get to your area.

[Excelsior! Academy]

We had one for awhile growing up.  My mom was in real estate and had gotten a good deal on a small cabin on a lake within an hour from where we lived.  We used it often until they sold it. If you have an area you frequent for vacations and can keep up with the upkeep then why not?  We are certainly not in the financial position to have one at the moment, but wouldn't be against it if circumstances permitted.

[MIch elle]

No!  It's not worth the hassle.  You're better off investing the money in the stock market. Renting other people's vacation homes is cheaper with lots of locations to chose from and worry free.  We love vrbo!

[Happy]

As far as people going back to the same place...right now I'm trying to set up a 'tradition' in our family where we all gather for a week at the beach each summer. We found a great place to rent last year--very clean and comfy, good location, nice pools, and access to the beach. I'll be booking that place again as soon as 2014 gets here.

 

I'd do the same if we were doing family ski trips in the winter. Someday, maybe.

 

I have friends who take their grown and married children and grands to Disneyworld each year. They rent a neat sounding house each year. So I do think repeat business CAN happen.

[Donna]

I like going different places so I would not buy a vacation rental. I would not want to be locked into going the same place every year. I would not want the hassle of managing a rental and all that involves. If I had money enough to buy one, I would want to see the world.

[Chelle in MO]

No, and here's why--our cousins have a wonderful log cabin (that fil built years ago) and we caretake it. The family usually ends up only using just a few weeks a year now. It's surrounded by a ghost town, also owned by the family, on 100's of acres! We have the best of both worlds--we get to use it, and if something needs to be fixed, we get paid for it! We open and close for the use of it, but get paid for anything beyond that. It's 3 bed/1 bath with this view:  https://www.google.com/search?q=the+castles+baldwin+co&rls=com.microsoft:en-us:IE-Address&rlz=1I7ADFA_enUS439&source=lnms&tbm=isch&sa=X&ei=NJeOUqOrMonTqgHY9ICwCQ&ved=0CAkQ_AUoAQ&biw=1192&bih=561#q=the+castles+ohio+creek+colorado&rls=com.microsoft:en-us%3AIE-Address&tbm=isch&facrc=_&imgrc=EoWj81HGTFGt4M%3A%3BXDl50LLwhPgS4M%3Bhttp%253A%252F%252Fwww.hanselmannphotography.com%252FAll-Large-Images%252F5161%252C-Castles%252C-Ohio-Creek-V.jpg%3Bhttp%253A%252F%252Fwww.hanselmannphotography.com%252FCustomers%252FWoodleysFineFurnitureColorado%252FWoodleysColoradoThumbnailPage.html%3B504%3B336

 

Jealous!!!  :001_tt1:

 

[MomtoCandJ]

We thought about, I will have property in the UP of Michigan when my mom passes away. It could be mine now if I wanted to do the paperwork and what not (it was my grandma's and at the time of her will I was the only grandchild, I do have two younger brothers though). It all depends on what happens when my mom passes, if my middle brother is still there and wants to stay, I will let him stay there. Otherwise who knows, I'll cross tht bridge when I get there.

[Cera]

I don't think I would do it as a means to make money.  

 

I would consider it if you consistently vacationed in the same area and wanted a place that was your own.  You could rent it when you weren't using it to recoup a bit of your costs.

 

If you do decide to buy something make sure you are very familiar with the rental laws in the area.  Some places have strict rules regarding short term rentals.