lobsdiver1

Wondering if anyone has experience with a vacation rental where it is managed and minor to moderate hassles or involvement? Anything out there that can clear $25-$30k on a $350-$400k investment, or proportioned up to $600k? Looking for passive income opportunity outside of market to supplement.

if so, what areas? I know a lot of areas are priced with investment and fees making it hard to make decent returns unless you self manage SF homes. Thanks

SmokyMtnGrady

I laugh at the notion of hassle free. I own 3 vacation rentals, had 5 at one time. It's real estate brother and real estate is not hassle free. Stuff breaks,furniture needs to be replaced , guests get upset , property managers don't always tell you a problem until it's too late. Don't get me wrong, the right property in a good market can do well, but if you jump into the vacation. Industry , you need to understand you are becoming like a Marriot . Guests have expectations. You need to equip the home or condo with nice furniture, linens and cookware. It's constant maintenance and when things like hot water heaters fail or the AC goes out or the hot tub breaks, guests get upset . Your property manager can shield you from it but the reality you need to have a presence regardless. Otherwise you are trusting folks who may or may not really care about their job.

We are having an issue right now with an AC system which I spent $3,200 last year to fix with a new compressor. It caused the guest to be moved and the home is out of commission until we get it fixed, again! I love the vacation market ,but make no mistake about it, it's not hassle free.

lobsdiver1

Thanks Grady

I edited to remove hassle free and replaced with less laughable words.

where were your rentals and what kind of return on investment did you get?

I have two long term rentals now so get what it takes. I did vacation rentals for some time on my keys home but I am in an area with 28 day minimum so returns were only about 2-3%. I switched to long term and returns are about 5-6%.

I was asking about vacation because I figured others may have an area that does 8-10% assuming you don’t have the major expense. Some years would obviously be quite a lot less with major repairs.

74lbSteve

We don't own a home there, but the Outer Banks of North Carolina has the largest concentration of managed vacation home rentals that I know about. Thousands.... We have rented vacation homes there for decades. Stable market, great management companies. Sun Realty and Twiddy Realty web sites will get you started.

MikeMadBch

The central Gulf Coast of FL is very good for vacation rentals. I own 2, previously managed 85 of them for others. The demand for tourism in this area continues to climb year-over-year. Pinellas County is probably still the best value vs. income. We have just gotten back into the vacation rental management business, but to be effective will only handle them very close together.

Areas to look into - Anna Maria Island, Ft Myers Beach, and any of the Pinellas County beaches (St Pete Beach north to Clearwater Beach)

lobsdiver1

thanks mike, I will look it up. Care to share % returns ballpark?

lobsdiver1

Steve, thanks. Will also check area out.

Tim_fl

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Bamaman

The Gulf Coast from Panama Beach west to Ft. Walton Beach is very popular, but some of the towns (like Seaside) are very high brow. And the Alabama Gulf Coast towns of Orange Beach and Gulf Shores are also very popular.

triguy7

I own seven on Dauphin Island. Very good demand and prices have just started going nuts.

stokes_landing

Is it just me or does the rental market seem risky at best right now? I mean the Covid just shut every thing down for months. What am I missing?

lobsdiver1

it’s not just you, lots like super safe investments. I am thinking longer term and actually trying to spread some risk. I am well seasoned at losing lots of money so have built up pretty good tolerance and outlook.

stokes_landing

So you're looking to park $350k-$400k cash? I'd be worried about another 2008 where you lose 50% of that overnight. You say you're used to losing a lot of money so I guess just throw a dart and pick a place.

GetReel

It seemed like it was back in April, now Im booked solid till Sept, minus a week or two, HHI

lobsdiver1

yes, have lost on real estate but also stock market. Guess I should clarify also have done well with both but looking to get more balance with real estate. Don’t get me wrong, not eager to lose money. Kind of why I am seeking others experience with different areas on here. Then, I’ll make an evaluation. Thanks again

lobsdiver1

I was looking for renting a month of July down in lower keys just to use a week and couldn’t find anything. Those can only rent for 28 day minimum in most areas.

My brother in law has a vac rental in steinhatchee and rented out whole summer season for all but 2 days. I looked at that but season there is extremely hot for scallop season but not so much rest of year.

stokes_landing

I live next to a vacation rental. It was booked solid until probably Feb. then the owners moved in to escape the craziness. I don't think they're going to rent it out anytime soon.
Good luck with whatever you decide. My major concern would be where is the real estate market at before worrying about the rental side. Find a sweet deal on a property then you'd be in good shape to convert that to a rental. And be protected if there are any dips in property values nationwide.

devilfishlane

I hear the Ocala, Fl area in hot now for investing ..Any confirmation on that ? Thanks

stokes_landing

I had 3 vacation rentals in 07 then got divorced and 08 wiped that out. Waterfront was/is my focus. I'm not hearing the crazy deals you want as a rental. See how the condo market is doing in WPB. That'll give you a temperature for the area. Lots of plays. Find the sweet deal. Double your money. EzPz

signmansez

Couple of questions....

Are you going to be using and enjoying the property on a regular basis?

Are you planning on paying cash?

Condo or stand alone home?

If paying cash and not using and enjoying the propert for vacation purpose, you are better off investing in equities and paying for a vacation when you want to go.

Have owned vacation condos (never again) and presently own vacation rental house that we plan to move into upon retirement.

The less hassle you have the more money it will cost you. Real Estate, as mentioned, is far from hassle free. Property near or on saltwater is in constant need of maintenance substanially higher than non-saltwater property.

Condos generally leave you the least amount of control over expenses and general ownership. We have all heard the horrific condo nazi stories, lived it and they are true! Assessments can be a killer.

Financing a vacation property is a great way to buy. Like any rental property, if you have the market, let someone else pay for your property. Great way to build wealth.


And MikeMadBch......ssshhhhhhhhhh. Hush up about hour little secret coast!