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VRBO - Galveston returns

2,946 Views | 5 Replies | Last: 4 yr ago by Diggity
bkag9824
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AG
Any of you fine folks have a property in Galveston (west side preferred) that you VRBO?

If so, what is demand? Occupancy? Common issues?

Family has a 3/2 in Jamaica Beach that is undergoing repairs/facelift, and trying to help parents make a decision on whether to do something like VRBO or put back in long-term rental.

Have run some average rates for the area for comparable size/quality of properties, but would appreciate direct feedback from those that do it.
JMac03
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AG
We had one for about a year to year and a half. We were partners with another couple and we ended up selling our half to them. The first year I do not even think we broke even, but I cannot be 100% sure. The main problem I see is that if you use a real estate management company, they take a pretty big cut/tack on fees. So essentially people wanting a short stay, like 2-3 days, they are better off in a hotel by the time you tack on the cleaning fees and management company fees. If you are local and truly can do VRBO and not run it through one of the mgmt companies, you probably would be much better off - many companies charge a least $150-$250 for their fees.

I know that the house is rented much more now, but I cannot say how much money he makes off of it. I know he is on the upside, just not sure how much.
nonameag99
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there is a poster on here named "Premium" who has a house in Pointe West that does VRBO

He has posted on here about the house several times, you may be able to search and find his threads or PM him

My parents have a beach front 5BR in Indian Beach that sleeps ~16. They have it listed with Sand N Sea and it books solid all summer probably and probably 2 weekends a month on average the rest of the year. I think the market is strong for us because there is less competition that is beach front and can sleep so many people. My anecdotal impression is that smaller older non beach front has more competition in the market, but you could probably assume that there are more renters at the lower price point.
EclipseAg
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AG
IMO, the only way to make money on a Galveston rental that isn't paid off is to have a large-enough home to justify high rates (say, $3K-$4K for week in the summer) and manage it yourself through VRBO or AirBnB.

I owned a home in Pirates Beach for eight years (sold in 2018). We used Sand N Sea as the management company, primarily because of their marketing strength. Sand N Sea takes 20 percent of the rental income, which is pretty standard there.

Our house was only two bedrooms, but it was a block off the beach and had a great deck and view. Still, because it was small, we could not charge much for rentals, even during the busy summer months.

We were typically booked solid from mid-June through mid-August, at spring break, and over major holidays, with a lot of weekend rentals throughout the year.

However ...

We did not turn a profit in any of the eight years we owned the home, and after expenses, it was even difficult most years to cover taxes, insurance and maintenance with revenue.

In addition, increased competition due to new builds in Galveston actually pushed rental prices downward beginning in 2015-2016, which continued through the time we owned the home. We could see the writing on the wall -- taxes and flood insurance were getting more expensive and rental revenue continued to fall even though bookings were consistent.

I have a relative who owned a larger home in Pirates Beach, a four-bedroom. He too lost money every year, despite a busy rental calendar. He used Gary Greene for his rentals.

I also have a friend who owns a relatively new home on the West End. Her family manages everything themselves -- booking, client communication, etc. -- and they've hired local vendors for cleaning and maintenance. It's a very expensive house with high rates, but they were not breaking even with a management company.




EclipseAg
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AG
One other point ... I've never owned a long-term rental, so I can't compare, but I was shocked at the amount of damage that short-term renters do.

In eight years, we had to replace the kitchen faucet three times and the shower head four times. We had three different kitchen trash cans. Furniture, lamps, window blinds and towel racks were broken; TV remotes and all kinds of little things were stolen.

It's not a deal-breaker, but it's definitely something to consider budget-wise.
Whoop Delecto
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AG
Diggity
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AG
doesn't seem like those rules are too crazy or over reaching.
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