7 Replies Latest reply: Feb 10, 2019 2:35 AM by mvphawaiicondo RSS

    Would my property make a good vacation rental?

    mvphawaiicondo Contributor

      We've only had our Hawaii VRBO for about 3 years and it's been the best thing we've ever done.  It was an accident of sorts but it's worked out beautifully.  It's my niche. I love doing it.  I love making people happy and yada yada yada.

       

      We have a long term rental in southern California.  it's been rented for 20 years and the last renter was there for 8 years and just moved out.  Our dilemma is what to do with the property.  I can tell you that even though I love being a VRBO owner, I hate being a long term rental landlord.  We are trying to figure out what to do with the property.  Here are the options: rent it out long term again , sell it and pay capital gains , sell it and do a 10-31 exchange , or......turn it into a VRBO .  The prospect of a successful VRBO makes me happy however, we are not necessarily located in a "vacation destination".  We are 40 minutes southeast of Disneyland.  45 minutes to the east of the beach.  1 hour northwest of Legoland. 1.5 hours from San Diego.  1.5 hours from Hollywood.  We're just in a small town in southern California with no claim to fame.

       

      We went to Normandy France once and stayed in the country at a VRBO.  We had to drive an hour every day for anything that we did.  We didn't mind because we were on vacation and it's fun to drive when your on vacation.  So I'm wondering will people mind driving?

       

      We have no regulations about short term rentals in our city as I've already checked.  Our condo association requires a minimum of 30 day rentals.  Would people rent for a 30 day minimum like they do in Palm Springs?  Oh and we're 2 hours from Palm Springs.

       

      I've thought about investing the $499 with VRBO to advertise to see if I get any bites.  But I have no pictures because it's not furnished yet.  I would only be able to put in pictures of the town and the condo complex and explain to people how it's being prepared and perhaps direct them to my other rental so they can see what type of owner I am and what my guests have to say about me and the way I run things.  I would offer a pretty good discount to get people to rent blindly from me for 30 days, or at least I would block off 30 days and rent for a minimum of 15 days.

       

      Any thoughts on how one would go about feeling out the market?  No one else in my area is doing this.  Actually, I did find one gal on Airbnb that is in my condo complex and she is not abiding by the rules by renting out 3/4 day minimums.  It seems to be working for her but I can't do it that way.  I refuse to get in trouble by the law or get my neighbors mad.  I'm just not sure how to go about testing the waters.  Any insight would be greatly appreciated.   Thank you.

        • Re: Would my property make a good vacation rental?
          feibus Senior Contributor

          Will people mind driving in SoCal?  Seriously?

           

          I'd go back to long-term, but figure out a way to offload the parts of the experience that you hate.  Maybe pay to put a property manager between you and them.  The point of having the home for so long was to build up all that equity without having to pay for it yourself, and that's working for you, but maybe some of the management activities are driving you nuts (and I can see that happening to me as well, which is why I refuse to do it), but that's just swapping a little profit for someone else to take care of the headaches.

          • Re: Would my property make a good vacation rental?
            calicalling Active Contributor

            We live in So Cal. We have a long-term rental that we rent to USAF/DOD and foreign service military and that has been very successful for us. Since it is aging and we have a ton of equity (thanks to 10 years of renters and good prices at the moment) we are about to sell and buy another STR. There is a website where you can offer your home to military/dod/etc. You can list it long term or for TDY (short term travel, not relocation).

             

            If you decide to rent your place out and need furnishings, I probably don't have to tell you that LA Craigslist is a treasure trove of amazing deals. Just avoid anything people call "mid-century modern" because that means they bought it at a garage sale for a nickel and are trying to sell if for $800.00. I'm headed to Hermosa tomorrow to buy a ton of furnishings that are at leat 80% less than retail, and once a guest sits on it once, its used anyway....

             

            I would avoid basing my business plan on activities that are outside the HOA requirements-- I would live in fear of getting shut down while having a calendar full of guests. You could look into renting to gyspy nurses as that would meet your 30 day minimum but also keep you out of the 'long term' rental game. Those are usually 30-90 day assignments.

             

            If you are interested 1031ing Mammoth Lakes area, please LMK. I've looked at most of the properties there (everything from 300k studio condos to a 4 million $ nightly rental home) and know the market pretty well. We also have good connections with the Town and maintenance/cleaning/repair people-- and an amazing real estate agent that has helped us with all our purchases there. Honest agents are hard to find, IMO.

             

            Town of Mammoth is a good market for rentals (thanks to 22 million people in LA who compete for the very few numbers of units in Mammoth) but purchase prices have increased a ton in the last 5 years. There are a couple of new opportunities under construction, though, and that can be instant equity if you get the right thing at the right price.

             

            HTH.

            • Re: Would my property make a good vacation rental?
              sage Senior Contributor

              We're just in a small town in southern California with no claim to fame. 

              . . .

              We have no regulations about short term rentals in our city as I've already checked.  Our condo association requires a minimum of 30 day rentals.  Would people rent for a 30 day minimum like they do in Palm Springs?

              Minimum 30 day rentals in a small town distant from attractions? How many travelers are likely to include your area in their search for a rental? Converting the long term to STR sounds risky, especially considering the cost to furnish and equip it.

               

              Paying capital gains tax is great -- it means you have made money. Depending on where you think you are in the cycle of real estate prices, it might make sense to sell high now, pay the tax, and buy low when the market goes down if you still want to be hosting travelers or be a landlord. Of course there are no guarantees when will be market peaks and bottoms.

               

              Deferring capital gains through a 1031 exchange can be great if the property you go to makes sense.

              • Re: Would my property make a good vacation rental?
                victoriam Active Contributor

                Do a search on VRBO/HA as a guest might search and see what your competition would be.  Check their calendars for bookings.  Having both long and short term rentals,  I can't imagine a ST rental being less work as long as you have a good tenant.  If you are near any hospitals, think about renting to traveling nurses/medical professionals.  They usually do 13 week stays.

                • Re: Would my property make a good vacation rental?
                  green_mango Active Contributor

                  I think with some more research you may find you can give it a try - don't just make it a "VRBO" - check other popular short term rental sites and see what's on there nearby and price-wise.  With not many destinations nearby, your target audience may be family coming to visit other family members who live in your area.  My in-laws rented a place for 3 months while visiting us.  Traveling nurses also tend to do longer term stays and there's specific areas you can advertise to them.

                   

                  I would not post a listing until it's 99% ready to go - all furnished, professional photos etc...  As a guest I would never rent a place with no interior photos that was "in progress" - I just recommend being patient and waiting to list until you're ready to accept reservations. 

                  • Re: Would my property make a good vacation rental?
                    margaret CommunityAmbassador

                    I also think the travel nurse/gypsy nurse market may be a good fit for you if you have nearby hospitals or medical facilities. They normally contract for 13 weeks but sometimes their contracts are extended for longer periods. You may also consider corporate housing if the area is right of that type of STR. Google and use the FB search bar to look for Travel Nurse, Gypsy Nurse and Corporate Housing. There are a lot of groups on FB for the nurses.

                    • Re: Would my property make a good vacation rental?
                      mvphawaiicondo Contributor

                      Thank you everybody.  Lot's of good insight.  Lot's to think about.  I appreciate all of the input.