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REAL ESTATE Vacation Rentals

santiago

Contributor
Aug 20, 2007
108
25
22
I have a few vacation rentals in Florida and was curious if any others here invest in vacation properties. If so, with the real estate market being so volatile - it certainly appears that vacation rentals (again, in FL) are just that much more unstable. What is your long term view on this investment?
 

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yveskleinsky

Bronze Contributor
Speedway Pass
Jul 26, 2007
2,233
494
192
42
What is your long term view on this investment?
Your answer should depend on how you define an "investment[/I]". In MHO, as long as it cashflows you are fine. FL is a buyer's market now, so as long as you are finding properties that CF go for it. (Vacation rentals are somewhat harder to CF as the property mgmt fees eat up any profit you may have, but I like 'em.) I suppose it boils down to whether or not they fit into your financial plan. Work it backwards. What is your financial plan and how long will it take for you to get there- then, do vacation rentals fit your plan?
...And when you say "long term view on this investment" what does that mean? Sure you can hold them for 50 years and then cash out, but is that your plan? Are you looking to hold them for cash flow or appreciation- or ideally both? What would you do if you were to sell them? (Buy an apartment complex, etc.) What is your long term goal for this investment? may be the better question to ask yourself here.
 
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santiago

Contributor
Aug 20, 2007
108
25
22
yveskleinsky -

Thanks for the advice - great food for thought. I bought the properties for apprecation and they mostly cashflow - but I really don't have the exit strategy in place. Shame on me!!
 

venom

New Contributor
Aug 6, 2007
67
7
12
Hi
I just had my coworker get a place near disney for the new yrs holiday.
There were a ton of places to choose from on the net.

I think the key is having a great management company.
I looked at this but wasnt comfortable with all the expens
es.
Plus the additioanl wear and tear on the place.
Decided to go with the yearly rentals instead.
Rob
 

Yankees338

Bronze Contributor
Jul 24, 2007
1,829
136
81
28
NJ/MD
Why are management expenses so much higher on vacation rentals? Is it just before you have such a frequent turnaround?
 

yveskleinsky

Bronze Contributor
Speedway Pass
Jul 26, 2007
2,233
494
192
42
The mgmt fee is higher because of the turn around. As a mgmt company, you really have to hustle to get a place rented- the early bird gets the worm on vacation rentals! Compare this to a stable long-term renter who mails in a check every month. ...There are pros and cons to each way of doing it (long term v. short term). I like vacation rentals because I never have to deal with evictions, and they pay with a credit card up front, so I don't have to chase anyone for rent. I also have someone in there every couple of days so there is no deffered maintenance. The biggest downside for an owner of a vacation rental is that it is really hard to cashflow unless you manage your own, or start your own property mgmt. company (which is what we did).
 

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