Vacation Home/rental business

I am considering buying a Vacation Home/rental business, which we can use during certain times and rent it out to recoup the property taxes. Looking for a warm weather place in the United States that is a 2 1/2 hour plan ride or less away. I am thinking Florida, South Car, Georgia or Texas, ( not sure about International) something in close proximity of the water. On the Rental side I would use Airbnb or VRBO to market. I would hire a cleaning services, as I will probably be 1,000 miles away from the property. Any other advice, pro and negative experiences?

Palatka, FL.  My parents bought their retirement home on a canal off the St. Johns River in the Palatka area.  Prices are fairly reasonable and if you find something on the canal, you can rent it out to bass fishermen that come down for tournaments.  Just about 30 minutes from St. Augustine, an hour or so from Jacksonville and Gainesville, and about 2 hours to Orlando.  

Owning a rental property is a lot of work.  Dealing with short term tenants via VRBO or Air BnB is a lot of work if you're not local.  Your depending on the cleaning crew doing their work and paying for a manager.

Look into the costs, generally you're much better off financially staying at the Ritz for the days you'd be there compared to owning...

docwyte said:

Owning a rental property is a lot of work.  Dealing with short term tenants via VRBO or Air BnB is a lot of work if you're not local.  Your depending on the cleaning crew doing their work and paying for a manager.

Look into the costs, generally you're much better off financially staying at the Ritz for the days you'd be there compared to owning...

My SIL bought a vacation/retirement house in Pigeon Forge TN.  House was new at the time.  After 10 years of rental agent problems, repairs, upgrades needed to attract renters, etc. she sold it at a loss.

We've had a profitable short-term rental for the past 4 1/2 years and and are currently looking to expand to additional properties.  What we do is a job.  Part time, sure, but it takes a continual commitment to our guests to be successful.  When anything goes wrong -- internet goes down, plumbing backs up, a guest backs into the mailbox -- you have to have someone who can respond and assist in a very timely fashion.  While we do much of that ourselves, it is possible to outsource that work from 1,000 miles away... but finding people you trust to manage that part of your business can be expensive and hard to find.

I would more then likely be looking for a Condo rather than a house. Has anybody used Airbnb for finding a co-host?

This subject has come up a lot lately. Rather than retype everything, just read this:

https://grassrootsmotorsports.com/forum/off-topic-discussion/airbnb-a-good-thing-side-income/132119/page1/

We're in the process of getting the financing in order to build a rental cabin in a nearby popular hiking/climbing/nature area, so this is relevant to us. Our cabin's rentals, cleaning, etc. will be managed by a local rental company so we should have a lot less day-to-day things to worry about. It definitely will eat into what we might make from it- they will take 40% of the rental fee and get all of the cleaning (and I imagine pet) fees, but it will mean we only have to worry about when larger things go wrong and don't have to deal with managing the rental schedule.

I'd much rather have the flexibility to go wherever I want.  Just seems like if you're looking at these as an investment, you really won't make it off the rental, you'll make it off whatever appreciation the property has over the years.  Since we're in a hot market right now, that's a big risk, as you won't be buying low.

I think condos are worse as you have association fees and assessments to pay as well...

docwyte said:

I'd much rather have the flexibility to go wherever I want.  Just seems like if you're looking at these as an investment, you really won't make it off the rental, you'll make it off whatever appreciation the property has over the years.  Since we're in a hot market right now, that's a big risk, as you won't be buying low.t

I think condos are worse as you have association fees and assessments to pay as well...

I have to agree. I rented a house on the gulf coast this summer, and the entire neighborhood was nothing but VRBOs and AirBnBs. The market seemed saturated, and most appeared to be empty. Short term rentals can have strong returns, but you have to have steady occupancy.

I will say that the plus side of a condo, is that you can avoid capital expenses like a new roof, lawn care, etc but as you say that might be offset by HOA fees, etc.

I think you need to be very honest with yourself about your goals for owning a property, and then do a lot of research about how likely you will be to meet those goals.

Positive cash flow - probably pretty tough being remote, you'll need to pay someone for all services, repairs maintenance, etc.

Property appreciation - maybe, but fairly risky bet in some markets

Place to host family and friends now, and retire to later, and you are ok with associated expenses - owning might make sense

My wife and I have a vacation place that is close enough that I can go 10-12 times per year.  We bought it to be enable us to go more often - but it would be cheaper to rent instead of own.  We have looked into renting it, but from what I can tell, we could only hope to cover a portion of our expenses, it won't pay for itself unless we pretty much never stay there ourselves.