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2685 Views 9 Replies Latest reply: Jul 21, 2012 4:57 AM by skyreal RSS
New Member 4 posts since
Jul 17, 2012
Currently Being Moderated

Jul 17, 2012 4:11 PM

How Many Days A Year Do You Rent?

Hi there,

 

I'm looking at buying a condo to rent and I'm trying to decide if I want to buy a unit for a long-term lease or for a vacation rental. My issue is that I can't imagine the income from a vacation rental covering the costs (on, say, a $100k mortgage). I'm from Canada but I'm thinking of buying somewhere warm - Florida, California, Panama, etc. - so it could rent year-round. I was just hoping to get the opinions of some of the people here. For people who have vacation rentals in hot climates, on average, how many days a year are you renting them? Where are your units? Are you covering your costs?

 

Thanks!

  • beachgal Contributor 95 posts since
    Apr 22, 2012
    Currently Being Moderated
    Jul 17, 2012 5:46 PM (in response to rmccam)
    Re: How Many Days A Year Do You Rent?

    Hi.  I just bought my beach rental in Madeira Beach a year ago - but have been so pleasantly surprised at the ROI.  I also own long term rental apartments where I live in Southern Ohio and Northern Kentucky.  I view the two investments differently.  I expect my monthly rental apartments to cash flow and produce a 10-12% ROI.  When I purchased the beach condo, an oceanfront weekly rental, I based my investment on booking 26 weeks per year for breakeven; fully expecting to get my ROI from future appreciation.  I expect to have 48+ weeks booked for 2012 (even with 2 weeks owner use).  Of course, it depends on how much marketing time you want to spend, how quickly you respond to inquiries and the amenities you provide.  Good luck to you.  You can check out my websie at www.thebeachvacationshoip.com

    • beachgal Contributor 95 posts since
      Apr 22, 2012
      Currently Being Moderated
      Jul 17, 2012 6:01 PM (in response to beachgal)
      Re: How Many Days A Year Do You Rent?

      sorry typo:  www.thebeachvacationshop.com     

  • lakeguy New Member 18 posts since
    Jul 13, 2012
    Currently Being Moderated
    Jul 18, 2012 3:37 AM (in response to rmccam)
    Re: How Many Days A Year Do You Rent?

    I am happy to get 12 weeks a year short term rentals here in the foothills of North Carolina. I also manage 4 long term rentals, however, and the amount of effort involved is different between the two.

     

    Short term renters require almost 365/24/7 attention to email and phone inquiries and constant juggling of calendars (which is minimized when all rentals start and end on the same day of the week) plus the hassles of meeting and greeting folks as they check in and out plus ongoing support while they're here and they need help because of the foibles of the dishwasher and icemaker, etc. The wear and tear on the house is also greater with groups coming and going. Another issue with a condo is the potential disruptions by and to the neighbors.

     

    Efforts for long term rentals are much more focused. Advertising is only needed in short bursts for the 6 or so weeks before the house is vacant. Support requests from the tenants diminish over time and in my experience, the house is better cared for by long term tenants.

     

    It's probably just a function of our specific market, but our rental income is basically the same either way, since we charge about the same amount per week for a short term rental that we charge per month for a long term lease.

  • beachgal Contributor 95 posts since
    Apr 22, 2012
    Currently Being Moderated
    Jul 18, 2012 5:49 AM (in response to rmccam)
    Re: How Many Days A Year Do You Rent?

    Not sure how much of a veteran I am with only one year under my belt with the beach condo, but I have been in real estate law and owned long term rentals for some time.  We decided on our condo based on a number of factors (1) ease of travel for ourselves; (2) close to activities (John's Pass) ;(3) view; and (4) investment potential.  I will say after over 100 hours of research and 3 trips, what we found is:  buy oceanfront, 2 BR, 2BA.  The up front cost is more, but you will stay booked more and the rates will be higher; more than justifying the increased initial investment.  Whether you want to go long term vs. short term rental depends on a number of factors.  How much time do you have to manage the property (whether you hire a manager – usually they take 20%; or manage yourself through vrbo or otherwise); and whether you are looking for long term investment strategy.  Our beach condo produces a good return, but our biggest return will hopefully be from future appreciation.  I do spend a good deal of time on managing the inquiries and bookings, maintaining website, etc. - but I must say it is much more enjoyable to operate than my long term apartment rentals.  I agree with lakeguy's comparison about the advertising and care issues.  However, I do not meet guests onsite as I have a keyless entry system and they are able to enter themselves.  My housekeeper cleans and inspects weekly and if there are maintenance issues I call a local maintenance guy I use.  I keep appliance manuals at the condo and very detailed guest book explaining how to use everything in the condo, giving tips on places to eat, phone numbers, etc. - so I actually get very few calls while guests are staying.

    Good luck.

  • crescentbeach4u Community All-Star 865 posts since
    Sep 10, 2011
    Currently Being Moderated
    Jul 18, 2012 7:18 AM (in response to rmccam)
    Re: How Many Days A Year Do You Rent?

    We bought our property knowing that the main purpose was to be able to enjoy it ourselves when not rented and the hopes for income that the place generated would help pay for HOA which is high,  real estate taxes, insurance, electricity, repairs, taxes, VRBO, etc.  We did not have any mortgage on the property and it is located on a very nice beach in Florida.  We are able to cover all costs and expenses but I do not see how anyone is also able to pay mortgages as well.  We figure that hopefully the economy will pick up and we can make money off of it down the road when we sell it. 

     

    I would imagine the only people that can actually have all paid including mortgages are the homes on beaches that can generate large sums of money on a weekly basis.  But I do not understand how condo's could achieve the same results.

  • stjvilla Active Contributor 626 posts since
    May 27, 2011
    Currently Being Moderated
    Jul 18, 2012 8:29 AM (in response to rmccam)
    Re: How Many Days A Year Do You Rent?

    Our situation is similar to crescentbeach4u.  We built our home to enjoy it ourselves and rent it when we weren't there.  Because it's on a Caribbean island, guests must fly to get there and air fares can be a limiting factor in rentals.  You might want to think about that when considering Panama.  Also, because we live 1800 miles away, we must have a manager on-island to handle everything for us although we make some of the bookings ourselves and respond to all inquiries.  They take 25% which does not include the cost of cleaning or maintenance.

     

    When we started, 15 years ago, we were told by other VR owners not to expect more than about 14 weeks of rentals and to figure our costs accordingly.  In our experience, no one on our island can cover their expenses and their mortgage by short-term vacation rentals.  If our property was somewhere else where people could drive to it or if we did not have to have a manager, the result might be different.  Currently, we are rented about 38% and usually break even plus or minus a bit.  (We don't have a mortgage.)

     

    We also own a long-term rental house in New England and that income stream is much better and much less work, as long as we have a tenant!

  • New Member 1 posts since
    Jul 21, 2012
    Currently Being Moderated
    Jul 21, 2012 4:57 AM (in response to rmccam)
    Re: How Many Days A Year Do You Rent?

    Hi Guys,

                Thank You very much for sharing your views regarding vacational rentals.I really appreciate your views and very thankful to all of you.

     

    Thanks and Keep Sharing!!!

     

    Brickell condos


    Brickell rental

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