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Accurate info on short-term/vacation rentals?

1,485 Views | 10 Replies | Last: 4 yr ago by Kenneth_2003
NoahAg
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I'm intrigued about vacation rental investing. Are there good sources for legit metrics on rental properties? I.e., vacancy rates and what vacation properties are actually renting for as opposed to what they are asking for on VRBO/Air bnb?
proudaggie02
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AG
I'd ask RE agents in specific markets to provide rental numbers, and also reach out to property owners through Airbnb/VRBO to see if they'll share rental numbers.

I have 3 condos in Colorado mountain towns, and it's reasonable for me to expect 15k+/year cash flow per e place. I put down 20, 25, and 30% with 7/1 ARMs. My first place has appreciated 80% in 5+ years, the second one about 60% in 1.5 years, and the third one about 10% in 8 months.

I don't get very technical with metrics; I do some homework before the purchase and then just enjoy the passive income. In my experience, I've outperformed the "front desk" rental numbers considerably. For my first place, I looked at 2-3 same-sized units they managed. They averaged like 20k gross the previous three years, and the front desk/management company charged 40% mgmt fee. I handle the bookings and gross 40k+ year now. My second and third places are almost the same (they're in the same building).
MR Gadsden
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If you handle the bookings now I would argue this isn't exactly passive income. Having done the same thing I know the time involved. I'm not saying vacation rentals aren't a good investment but of you want the good returns be prepared to invest some time.
MS08
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AG
Cool! Which towns?
What bed/bath count?
MS08
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AG
That' is with anything though, eh Rich? Like Kobe said, 'got to put the work in.' RIP Kobe.
proudaggie02
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AG
Richline,

That's a fair point. It's not completely passive, but it's about 45-60 minutes/day for likely 110-115k/year net gain (when including tax benefits, paying down principal, and appreciation...I'm estimating appreciation on a 10-yr average).
proudaggie02
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AG
MS08 said:

Cool! Which towns?
What bed/bath count?

Breckenridge and Crested Butte. All studios/1 bedrooms with 1 bath.
Diggity
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AG
Those appreciation numbers seem crazy. Either they're exaggerated or that market is heading for a serious correction.
proudaggie02
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AG
Diggity said:

Those appreciation numbers seem crazy. Either they're exaggerated or that market is heading for a serious correction.
Very unlikely. I expect my Breckenridge place to have more modest appreciation over the next several years, but I'd be surprised if it wasn't at least 3-4% annually. Crested Butte has a ton of room to run, as I bought my first place right before Vail Resorts announced they were buying CB. I expect to average at least 10-12% appreciation appreciation annually for at least the next 3-4 years... that would get my units back to historical highs for the same-sized units in the building.

Diggity
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AG
best of luck to you. What was the cost of the first unit when you purchased, if you don't mind me asking?
proudaggie02
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AG
Thanks. It was 258k. It's a studio loft, top corner unit in a great spot in Breckenridge.... 40 yards to Main Street and 200 yards to the Peak 9 base ski lift. I plan to have it for at least another 15-20 years, and it would be great if I could get 650-700k for it down the road.
Kenneth_2003
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AG
Diggity said:

Those appreciation numbers seem crazy. Either they're exaggerated or that market is heading for a serious correction.
Looked up the sale price on the house we rented last week in Copper Mnt...

2.25 mil when it sold in 2011 and I think the zillow estimate (for what it's worth) was 3.5 today. Some of those areas are seeing some darn handsome appreciation.
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