I'm interested in investing in some vacation rental income property. How do I get started?

I'm hoping to find bargain year-round vacation rental property that will help finance my retirement as well as purchase of a house to live in. Moreover, I need to entrust the vacation rental to a reliable, dependable, trustworthy property manager/ management firm for all maintenance, management, rent collection, etc. How do I get started? What percentage of this kind of rental income typically goes to the manager, maintenance, taxes, insurance, etc? What other issues should I be considering?
  • March 24 2014 - San Diego
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Answers (17)

You might find property management companies working for a flat fee instead of a percentage. 

Calculate the return on investment after all the expenses. Another expense that you should consider is vacancy. Seasonal rentals have smaller cycles so shorter lease terms. San Diego is a good place to get a vacation rental because it is beautiful throughout the year. But there would still be pockets of vacancies in the year.
  • August 26 2014
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Profile picture for SanDiegoRealty1
Hello.

Depending on your purchase price, these answers will vary. The first thing to consider is whether or not it needs to be a vacation rental or long term rental. There are many complexes that will not allow short term vacation rentals.

Management Costs:
Typically 6-10% of the rent will go to the property manager. However, we do also have a limited service management option starting at $149/month.

Maintenance:
This depends on the property. Estimate a min of $150/month.

Insurance:
Estimate at $50/month

Taxes:
Estimate at 1.35% of purchase price in San Diego

The first step is to look at a real estate proforma and plan out your investment goals. If you or anyone needs one, let me know and I can send it to you.
  • August 24 2014
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Profile picture for sinoundip
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  • August 10 2014
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Hello! I specialize in baby boomer sales, investment property, and international sales and as a native to the area, I have lots of great advice for you. I highly recommend investing in one to three bedroom homes in La Jolla or UTC. La Jolla is a very popular tourist destination, close to boutiques, great restaurants, and walking distance to the beach. UTC ( University Town Center) has many condos available at very affordable rates that typically rent to college students at UCSD or professor's. I have several properties in mind that you might be interested in and I would love to show them to you. There are also many homes and condos in the area that may appeal to you in very safe, gated communities that are fully equipped with tennis courts, pools, close to shopping, restaurants, and more. This area isn't called America's Jewel for nothing and I would love to send you some properties that might appeal to you. Please contact me anytime fi you would like further help in your search. I look forward to hearing from you and wish you the best in your retirement!

Kristin Benedetti
Berkshire Hathaway Homeservices California Properties
  • May 21 2014
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Profile picture for UpNest
Best way to get started in my opinion?  Find an expert who has already invested in vacation rental income property and ask them how they did it.  Many real estate brokers also invest, so finding one who specializes in such properties is a great way to go.  Continue to look for resources online about how to start, what to do, but why not find a realtor to be your advisor too?  It's free, but the key is finding one without emailing everyone on Zillow.  Find a site (I'm biased of course, try [self promotion deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
) that helps you compare Top agents and identify ones who specialize in your niche.

Hope that helps.
  • April 17 2014
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Disney area is always great for vacation rental investors. Feel free to email me to discuss details of your price range and goals.
  • April 17 2014
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There is so much to consider when buying vacation rental property. Are you buying for appreciation or cash flow? Will you be financing the purchase? If so, cap rates are traditionally low in San Diego, but so are vacancy rates. Expenses that we usually account for are: taxes, insurance, property management, exterior maintenance, HOA fees, interior maintenance, furnishings, marketing, utilities, and vacancy loss (higher if you're planning to stay there during peak seasons). Definitely give an experienced REALTOR® a call to discuss. 
  • March 26 2014
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You need to determine what you are looking for specifically with regard to both your primary residence purchase as well as a rental property so that you can accommodate both at the same time or plan them separately as you are able to satisfy the down payment and monthly payment requirements. You really need to contact both a Realtor or get a good referral for one - I am in San Diego if you need help there. You also really need to get in touch with a STRONG Mortgage Professional that can give you a solid mathematical analysis based on your exact goals and qualifications. For the investment property you are going to need between 20-25% down payment and for a primary residence you have many different down payment and loan options depending upon your specific qualifications. If you have additional questions or need some more help, you are welcome to visit my Profile where you will find my contact information. All the best to you!
  • March 25 2014
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Retirement Planner-

Brookestone is correct, you must first know what you can afford if you plan to finance. I think that you have a great idea but you must first make sure that you are able to afford a new home if the home isn't rented out you will still need to be able to make those payments.

I have helped a few people do exactly what you are trying to do. In my experience I have found that finding the home is very difficult because you want something that appeals to vacation renters. And most importantly, you want something that you can make money on every month.

If I were in your position I would do three things.
Get pre-appoved (Call me)
Find a realtor who specializes in this (May take 5-10 interviews)
Take your time finding a home (Income is the ultimate goal, do your due diligence to make sure you will be making money off the property.)

  • March 25 2014
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Profile picture for Lakefrontmike
I feel the best way is to find a REALTOR in your area that specializes in investment properties. They will be able to find the homes you need and will understand the area you are looking.

Or you can find a new and upcoming REALTOR like I was myself and help that new REALTOR grow and watch him or her bust their butt for you.

Hope this helps

Mike
  • March 25 2014
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 You are smart to be cautious about this.   There are many traps and pitfalls to watch out for.  The most glaring to me is will you be financing this?  If you buy a property and rent it will the rents cover the mortgage.  The last thing you want to do is supplement the mortgage.   Another issue: is will you be doing weekly or long term rentals and you need to consider the wear and tear on the property from them. Generally weekly rentals are taken care of a bit better but the long term if you have never been a landlord you will be surprised at what gets damaged and broken.  Another thought:  How far away from your current home will this property be.  It is much easier to be able to get in your car to check on the property or deal with issues than if you have to take a plane or boat to get to it.  
  If you don't want to deal with rentals than I would recommend a property management company and fees vand services vary.   Weekly rentals are usually a percentage 10 to 20%  Longer term rental can be one month of rent or a percentage of it.  To get started why not pick an area and do a little research. You can call local agents to inquire about properties and even contact  property management companies.  
I would also talk with your accountant or investment advisor. If you are planning to finance your retirement maybe there is a better way.    Good luck. 
  • March 25 2014
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Why not buy on the island rated #1 by Trip Advisor, Marco island Florida.
We are a huge vacation area and prices have started to climb. But, we still home some great buys.
Ck out my website for the entire MLS  [Hotlink removed by Zillow moderator. Please see our Good Neighbor Policy.]
  • March 25 2014
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Good Morning,
I have handled vacation rentals (in Solana Beach and Golden Hill) as well as year round residential rentals. Feel free to contact me directly for assistance. Yes, the first thing to consider is where and how much. We can talk about rents (monthly, weekly, daily) and seasonally. 

Thanks!
Sinead
  • March 25 2014
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Profile picture for angelicablatt
I would say that you need to find a great Realtor to help you! That person will be able to advise you and answer your questions and guide you.
  • March 25 2014
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Typical property managers will be 10%, however, if you are in a vacation rental area where there are consistent short term rentals, it can be 25%.  VRBO is also a possibility if you do not mind managing it on your own.   Good Luck!
  • March 25 2014
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Profile picture for amelietremblay6
Nice thought in terms of future.
Yeah you need to decide whether you are going to purchase it by cash payment or finance it. Also have you already decided where you going to buy this property as many matters depends on that too.
  • March 25 2014
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Profile picture for Brookstone Mortgage
Are you planning on paying cash for this or financing it? If the latter,  I would suggest that you first see what you can qualify for. Determining a financial plan should be your first step and finding out what you can qualify for would be extremely important. If you are paying cash and assuming you have already met with your financial planner, you should find a good agent that has experience in this area. There are some good ones and some bad ones in San Diego, so ask for a referral from someone you know and trust.
  • March 24 2014
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