Curious to learn about experiences. Specifically if the property is not local to your primary residence.

Thanks

We've had a poor experience renting out a property thru VRBO and also a local property management company.

We're giving it thru the end of the season and most likely taking it out of the rental pool.

https://texags.com/forums/59/topics/3202064

My wife and I own and occupy a triplex, we have two 1/1 airBNB listing upstairs. We love it.

figtreehomessa at gmail if you'd like to email questions or I can answer here too.

Edit, missread your post about it not being local to you. We are actively seeking a vacation home in Mexico for our next bnb.

Researching areas with highest annual occupancy to invest and manage STR.

Yes. I live in Houston and airbnb in Albuquerque. What are your concerns?

Premium said:

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We're about to hit $100K rental income (2021)

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Annual or cumulative? Crazy awesome if that's annual!

Aggiemike96 said:

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Premium said:

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We're about to hit $100K rental income (2021)

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Annual or cumulative? Crazy awesome if that's annual!

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Annual for 2021, since Jan 1 - includes all previous stays and current bookings, but not dates that will likely get booked throughout Oct - Dec that are still open.

https://www.vrbo.com/1088404

Premium said:

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We're about to hit $100K rental income (2021) on a house we bought for $320K, 4 years ago.

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I'm curious if this is normal, or the result of COVID and people traveling more because they can work from anywhere.

I owned a vacation rental at the beach for eight years and never came close to this level of annual revenue.

Part of that was because our house was small, and in general, I think people are willing to pay more for a vacation rental home than they were in the past.

But a large reason for the discrepancy is that much of the year was a dead zone. Once kids were in school, rentals slowed to a crawl. We would get zero rentals in January/February. Spring break would rent and maybe we'd get a weekend or two in the other spring and fall months.

Ragoo,
My wife and I have a two bedroom two bath condo with VRBO. In the three yeas we have not had problems as noted above.
We mange it ourselves and have a cleaning crew although sometimes the turn around forces us to step in and do those chores.
I would be glad to visit with you if you have more questions.

What a great story. Definitely not something available today as there is alot of cash going into vacation homes and COVID has really increased rental prices/property value.

Here are my two VRBOs

#1 bought 5 yrs ago for 480K, 300K renovations, valued at $2M+ now. Gross YTD 91K projected to be about 110K for 2021. We use a property manager (15%). We did some renovations so took it off market the 1st two month. Took 40 dys this yr off market for family/friend use. Rent avg $950/nt in summer and completely booked so likely below market. Will raise to prob $1050/nt in 2022. If we didn't use the place prob gross $150K this year.

#2 Bought 18 months ago for $375K, 50K renovations, valued at $800K+. Gross YTD 60K projected to be 75K for 2021. Fully VRBO rented. Rent avg $600/nt and completely booked in summer.

Both on Lake LBJ and ready to buy a 3rd but inflated prices compared to pre covid. Missed out on two properties pre covid that I really wanted to buy but just didn't have the cash precovid both sitting on market for 3+ months. Priced at 850K, prob can rent for $100k/yr and valued 1.5M+.

I started this thread because I have the dream of owning a home on a lake. My thought was as a long term goal to buy and rent out over the next 5-10 years so that by then we can enjoy it with less financial burden.

EclipseAg said:

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Premium said:

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We're about to hit $100K rental income (2021) on a house we bought for $320K, 4 years ago.

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I'm curious if this is normal, or the result of COVID and people traveling more because they can work from anywhere.

I owned a vacation rental at the beach for eight years and never came close to this level of annual revenue.

Part of that was because our house was small, and in general, I think people are willing to pay more for a vacation rental home than they were in the past.

But a large reason for the discrepancy is that much of the year was a dead zone. Once kids were in school, rentals slowed to a crawl. We would get zero rentals in January/February. Spring break would rent and maybe we'd get a weekend or two in the other spring and fall months.

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I think it will be relatively normal from here on and here is why.

2019 Income - $66,500*: First, this is when competitive home prices were to be had in beach towns all over. We were also a relatively new listing; we've since built up a nice following and huge high ratings. We also introduced a small service fee about this time to handle the back and forth talking

2020 Income - $90,300*: Travel increased in the States, but home prices increased greatly. Because of that we increased our prices by about 20-25%. Things were shut down through about Memorial Day since COVID had just started, but the entire year was booked out. This could be a new normal since there are a lot more remote working opportunities.

2021 Income - $92,800*: We have a ton booked out already for the remainder of this year but there are a few dates still open that will likely get filled.

What I could see is if we had a big financial crash / housing crash that could definitely see things flip 100% the opposite direction. If the government keeps printing money we will ride this out for quite some time.

* The numbers I gave in a prior post had cleaning fees baked in, which are not really our money since we don't clean - these numbers here take that out. There also might be a few thousand of AirBNB credit card fees that aren't accounted for in these numbers.

Interesting. Thanks for sharing.

As I said in my earlier post, I believe strongly that vacation home guests today are willing to pay substantially more per night than they were a few years ago, at least in some markets (we sold our Galveston beach house in early 2018 after three years of declining revenues).

Not sure why this is, other than renting homes has become commonplace and people now can see the value vs. a hotel. Plus, of course, COVID demand helped push prices even higher.

After all our struggles, it's extremely frustrating to see the levels of revenue that people talk about today. In retrospect, we should have stuck it out.

Is it possible to BRRRR a STR? Or is it not possible to refinance to get your cash back out? Could you do it as regular rental for a year or two and then convert if STR market has better economics?

I do not believe STR or LTRs matter. It is all about loan to value and investment properties tend to get worse terms.

I bought a STR 30% down, market shot up 80% in a yr, and did a cash out refi for 70% LTV.

Medaggie said:

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I do not believe STR or LTRs matter. It is all about loan to value and investment properties tend to get worse terms.

I bought a STR 30% down, market shot up 80% in a yr, and did a cash out refi for 70% LTV.

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Hey Med - you and I seem to be on similar paths regarding this type of venture, and have seemingly very similar perspectives on wealth management/transfer to kids, etc.

Open to discussing a couple ideas via phone?

cb condos @ outlook . com (remove all the spaces)

Premium said:

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Aggiemike96 said:

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Premium said:

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We're about to hit $100K rental income (2021)

---

Annual or cumulative? Crazy awesome if that's annual!

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Annual for 2021, since Jan 1 - includes all previous stays and current bookings, but not dates that will likely get booked throughout Oct - Dec that are still open.

https://www.vrbo.com/1088404

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Your property OK after Nicholas?

South Platte said:

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Premium said:

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Aggiemike96 said:

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Premium said:

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We're about to hit $100K rental income (2021)

---

Annual or cumulative? Crazy awesome if that's annual!

---

Annual for 2021, since Jan 1 - includes all previous stays and current bookings, but not dates that will likely get booked throughout Oct - Dec that are still open.

https://www.vrbo.com/1088404

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Your property OK after Nicholas?

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Yes, we did allow someone to leave a day early with one day refund, but then also booked out 5 weekdays for next week.

What kind of mattress do you guys use for these rentals? We've been considering the Zinus brand from amazon.

We have the basic king size Tuft and Needle on Ikea bed frames and get nothing but rave reviews on the mattresses. I think we paid $700 or so each. I first heard of them when the founder was interviewed on Rich Dad Radio Hour a couple years ago, good story.