Vacation Rental vs Annual Rental

Hello,

I am looking to purchase my first property in the Fort Lauderdale, Florida area. With the property search close to a desirable beach, my plan is to buy the property and rent it out as a vacation style rental such as an airbnb or vrbo. I know it is a bit riskier but there is opportunity to make more than an annual rental if done right. After watching some of the investfourmore videos, I am having second thoughts on if that is the best way to go about my future investment. Any advise on my situation would be greatly appreciated!


-Dakota

Comments

  • I think you have to run the numbers for how much more you will make and how much more time it will take. There is opportunity there, but it takes more time and more management. 
    Creator of Invest Four More
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  • Posts: 0
    We have a vacation rental and I would say from my limited experience, its not worth it unless it is something that you want to use too, or that will be some sort of stepping stone to a place you want to use later.  It seems to me after having ours for little over a year, the "off season" is like REALLY off, particularly if you are in area where there is a lot of vacation rentals, the competition and price sensitivity is intense.  Not only that but the competition for amenities is a big issue. If you go with a place that has a ton of amenities - then you may get more off season rental and maybe a better rent.. BUT - you will also get a TON more in HOA and related costs than they state as the monthly due. They can have "special assessments" and other things that don't get disclosed as part of the monthly HOA - and they can come up at any time for any reason. You will be more in a year round season, but even then, there will likely be significant downtime.  

    I think they can be a good investment but I think that managing it through VRBO will be seriously time intensive. You can rent it for a week what you would rent for a month.. but then you also have way more wear and tear. Plus, if your AC goes out and you have renters there - it is something that needs to be addressed as an emergency. which could mean premium rates, etc.  There will be calls for stupid stuff like they can't get the tv remote to work. And if you rent it with a prop manager, that could be between 15 - and 25 percent of the rents.. which would be your cashflow. 

    We love our rental. And its in an area we like to vacation. But, I would not do it again and would not do it for an investment.  Hope I didn't rain on your parade. :(
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