Vacation rentals, like Airbnb and VRBO, have spread like wildfire over the last couple years.
Just like using your personal vehicle to make extra cash with Uber, some landlords are thinking they can squeeze a few extra dollars out of their rental properties by converting to vacation rentals. Is this the best way to go? Read more about vacation rentals and see if they are worth the effort of managing.
First, let’s look at what is required to manage the standard residential rental property in Warner Robins, Perry and the surrounding area.
Most landlords charge a set rent for the use of the house. The tenants are required to maintain their own utilities, landscaping and housekeeping. As long as the landlord did a good job of screening the applicants, the property management of the standard rental house requires less than 10 hours per month to maintain. There is very little work to be done once the tenant is in the house, but you only get standard market rent for the use of the house.
A vacation rental property will be more like a job, so just be warned.
VRBO rental properties are short term rentals for vacationers, traveling business people or anyone that just wants to stay somewhere that’s nicer than the average hotel. “Vacation rentals” can rent by the room (even a room in your personal house) or can rent the whole house. Of course the market for your area will dictate the price, but most “whole house” vacation rentals charge about the same per night as the local hotel rooms of similar status (cleanliness, accommodations, etc.). Single room rentals, of course, will be cheaper. The part that is so attractive to landlords is the price. Many “whole house” rentals are getting four and five times the standard monthly rent. Let’s look at what is involved in getting that attractive rental income.
Before you jump into becoming an Airbnb property manager, there are a few things you need to think about. Of course some areas do very well for vacation rentals, so we will list some of the main points and let you decide.
First and foremost, will your area allow residential houses to be used as vacation rentals?
Last I read, Warner Robins and Perry are no longer allowed to make residential houses into vacation rentals. There are many articles out there about local hotel owners fighting this trend (at least in the bigger cities) in order to save their business. Check your city and county ordinance for laws pertaining to vacation rentals.
Many rural areas around here like Hawkinsville and Eastman welcome vacation rentals for the obvious reason. TAXES. The hotel taxes that get charged to the big boys apply to vacation rentals also. Tourist towns welcome that tax money.
Other costs of having a vacation rental include all the expenses that the tenant was paying in the standard rental. Utilities, phone, landscaping and housekeeping become your problem now. In addition to that, most landlords provide tea and coffee. The house also has to be furnished. Housekeeping must be done after every tenant. All this adds up. A good property manager that specializes in vacation rentals would be highly advised, at least until you get familiar with the process.
Many of the vacation rentals that do the best have one thing in common. They are near a lot of transient traffic. Cities with lots of business people and tourist towns with vacation activities do the best. Even big college towns have a lot of visitors for games and graduations.
The main point is to run the numbers and make sure of what it will cost to convert to a vacation rental and if there is enough traffic in the area to keep your rental full enough to make the extra work and extra expense worth the trouble. A good trick is to ask your current tenants what they are paying for utilizes. That expense will be fairly close to what you will pay to maintain the house per month.
Double D property Solutions