Experiences Owning a Vacation Rental Property

January 14, 2012   Filed under Travel

Growing up I had the blessing to travel to a family owned cabin in Munds Park which is located just just outside of Flagstaff, Arizona. We would visit our cabin 5-7 times annually together as a family. We have very fond memories within the cabin so when my parents made a decision to sell it about 6 years ago I immediately began looking to purchase a cabin of my very own. I wished to provide the children with the same opportunity to make memories with a family cabin after i had. We started seeking a cabin or land to build a cabin June 2006. We quickly found some land found in Pinetop-lakeside Arizona that is based in the white mountains and approximately 3 hours from the Phoenix area. It was a modest 8,000 sq . ft . lot but we loved how close it was to the movie theater, restaurants, ski resort, lakes, and much more. We decided against owning a site built home and placed a new manufactured home on the lot which we were capable of complete by November 2006. We figured we might make use of the cabin a couple of years and could market it for a profit at some point (yes, this has been throughout the the property market boom so you can imagine simply how much underwater I am). I can’t describe the thrill there was during our first journey with all the children to look our completely new cabin. We were treated to a great deal of fun our first time together the youngsters and ourselves couldn’t wait to come back. We took the 3 hr journey to the cabin as many weekends as possible. After our newbie of ownership as well as the realization we couldn’t sell the cabin, much less give it away, there was a challenge on our hands. We had the ability to scrape together enough money to pay for cash with the cabin. What we didn’t realize is just how expensive a cabin with out mortgage would remain. Whether a cabin is paid off or otherwise you still have to pay for property tax, property insurance, basic utilities, frozen pipes, re-staining the porch and many other expenses. We didn’t have need to be broke on a cabin we only visited Five times annually therefore we quickly jumped on the net to find a method to rent our cabin. This is where we met VRBO often known as Vacation Rentals By Owner. What really sold us about this vacation rental website was the simple fact we had several other friends who swore by it. We paid our initial $299 yearly fee and off i was praying to rent our cabin. Over the years and months we certainly have had great success using VRBO therefore we are capable of pull in roughly $8,000-10,000 per year. Some may think how wonderful it could be to bring in this type of money. We thought the same thing until we realized there seemed to be nothing remaining at the conclusion of the entire year. Don’t get me wrong, We’re very grateful to have the income given that it helps us break even annually rather then being out of pocket. It is amazing how expensive it turned out to rent our cabin. If you consider about it though, the greater you rent the cabin the greater utilities costs plus the more deterioration occurs. Hiding within the shadows were all additional negative aspects of renting our cabin that we soon came across and still have never been able to chase away. After owning our cabin since 2006 we have ultimately come to a conclusion we would prefer to be renters of any vacation rental property as opposed to owners. I’m sure lots of you have a different view, which I want to hear, nevertheless for our little growing family of 6 it is simply too much to deal with. Mentioned are some pros and cons of being a vacation rental property owner we’ve experienced. Purchasing real estate is never something we ought to do impulsively so don’t hurry, study your choices, review your finances and interview anyone you could find regarding their experience. What follows is a quick pros and cons set of buying a vacation rental property.

PROS

1. Vacation Property – you no longer have to pay anyone to rent a house you might or may not like. You can decorate the home to your liking and make any changes without having to call for permission. You have complete power over the place you purchase your property and what it may be like.

2. Potential Rental Income – we successfully rent our cabin 10 roughly times each year using VRBO but I’m sure if we rented it additional days we’d finally obtain profit. Depending on the spot where you purchase the property and how its purchased you may be capable of producing a profit quicker than we do.

3. Tax write-offs – If the property is purchased as an investment and/or rented per year there could possibly be potential tax deductions you may receive. Obviously I am not an accountant therefore, you would have to inquire additionally from the professional.

4. Bragging rights / Bucket List – As funny as it might read I’m sure many of us buy a vacation rental simply for bragging rights or to cross it off a bucklet list. The thought of buying a cabin was really a great fantasy I had as well which was a part of the reason I bought one.

5. Investment – If you purchase the investment in the perfect location and time frame you may be able to sell the vacation rental for a profit a little time at some point.

CONS

1. Maintenance – I’m sure a lot of you thinking of buying a vacation property currently own a residence. So then I’m sure you could have something month after month in the house that has to have some TLC. We found the repair off our cabin carries a hefty yearly expense from re-staining our porches or siding to rushing out a plumber in the event the pipes freeze and break in the winter. Often there is an unexpected expense.

2. Handling renters – Now this will only be a headache should you wish to rent your vacation property. I have many fantastic renters stay in my cabin but there’s always several nightmare renters annually I must cope with over the dumbest of complaints. Honestly, even getting a perfect renter still requires an initial conversation, a request for money, a signed rental agreement, vacation rental instructions, and much more. Presently when renting our cabin through the winter I have a daily fear my renter might call me and make me aware the heater broke or perhaps a pipe burst. There is definitely an unnecessary stress without anything even occurring.

3. Resell value – I acquired our cabin within the peak of the real estate boom and currently it’s worth roughly $60,000 lower than I purchased it for. What really hurts is when I remember I paid cash for the property. I’m not gonna say your resell value will drop but it’s a danger you have when acquiring any sort of property.

4. Vacant not being used – We have been only able to utilize our cabin about Half a dozen times annually. While we are there it’s a fantastic time together. When we aren’t there I just sit and look at my vacant cabin not in use and enquire of myself why I bought something with such little use. I could possibly have put that large chunk of funds my personal home and dramatically reduced or almost eliminate my mortgage as a substitute for buying this other piece of property. It is a painful thought, I promise.

5. Mortgage – Lots of people buying a vacation rental property don’t possess the luxury of paying it off therefore yet another mortgage hangs over their head. A mortgage is simply not something you can easily do away with very easily. Consider, a home loan, TLC, and whatever else occurs could be detrimental to the wallet.

6. Lawsuits – This could probably are categorized as renters but I want to make it it’s own category. One time I had a renter who slipped on ice on my front porch and broke his leg. His wife called me more than once telling me what occurred and also just how it occurred due fishing for funds from me. I quickly pulled out my vacation rental agreement to be certain I had put together the correct language incorporated but that also isn’t foolproof. Thank goodness they never tried to come after me personally but where do you consider my stress level was for a couple of months? Having a vacant property comes liability.

7. Basic Utilities – Again, this will probably fall into another category above although i thought it should be mentioned separately. To improve my possibilities of renting our cabin when not in use we offer cable television, Internet, tissue paper and soap (how about that), and also the basic utilities. I have a monthly expense starting the 1st day of every month whether I rent the cabin or not. The expense is varying from $100-200.

8. Maid Service – Since I live 3hrs from the our cabin I must employ a maid service to clean after each renters stay. The cost is $75-85 for a 3hr clean. They call me afterwards and report on their findings and inform me if it’s going to require me to pay an additional hour or not depending on how trashy the renter was. They also restock a lot of our basic supplies. This is an additional task you will need to manage in addition to anything else.

9. Emergencies (plumber, handyman, glass repairman, electrician, snow plow) – I have a big list of emergency contacts which i’ve used many times. It is not any fun when you have to call one of those contacts but it really doesn’t help when one isn’t available. I got smart after the first few times of having nobody to refer to but Google thus I have at the least 3 contacts for each emergency category

10. HOA – I actually built a cabin where an HOA exists. An HOA may either be amazing or a headache and I’m sure you’ve all experienced both types. There’s always a yearly fee connected with a HOA and certain demands that needs to be met.

11. Location – What will happen when a few years in the future you desire to obtain a seaside vacation property as opposed to a mountain property. Oops, can’t really pick-up your home and move it to a new state (well you probably could but you know what I mean). Also, what happens when the vacant lot alongside you now is being built and your views now are gone?

12. Vacation Website Rental Fees – You’ll want to advertise your vacation rental property somehow if you want to rent it. I started advertising using VRBO for $299 annually and am now paying over $500. Yes my yearly rentals cover the charge however it’s still a headache to deal with but yet another expense.

My cons list may go on and on. What amazed me about the pros list was how little I had been capable of put on paper. Honestly, following first 2 points as listed above I needed to ask my spouse that helped me to consider the other 3. For us, we would not likely purchase a vacation rental property again unless we’re able to utilize it a lot more than Five times a year. Remember Five times yearly is my average, I was only able to utilize it 3 times during the past year. We always tell ourselves how many times we’re likely to use it but life comes at you quickly and plans change. We realized we would preferably be a renter and we will pay a nightly rate to live anywhere in the world and once we’re wanting to leave we are able to throw our towels and sheets on the ground while not having to worry about having it spotless. I manage our property so the neat thing in my opinion about not possessing a vacation property is leaving all of the stress of owning and renting the house behind me. I would like to go on trip to relax and do nothing at all, instead of worrying and losing sleep over owning this type of luxury. If you are the ledge deciding between owning a vacation rental Lets hope this helps with your decision. If you find this post helpful please leave a comment and let me know your thoughts.

I love building websites and am currently building a vacation rentals Website based on property owner feedback. Please let me know your experiences using the vacation websites on the internet today.

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