One of the reasons that I wanted to talk about a VRBO (Vacation Rentals By Owner) is because in the last year, I have had two different people contact me about them. They were looking to rent a vacation place for a few weeks to a few months and did not want to stay in a hotel but didn’t want to buy a house either.
In both cases, they were 100 percent correct – buying a VRBO was not their best option.
Last week, we talked about all of the great things with regard to owning a vacation rental. This week, let’s look at why it may not be right for you.
Andy and I are real estate junkies.
We loved owning a VRBO and would do it again. In fact, the last few months as we knew we were branching out on our own as a real estate company, we talked about making our former office in Kidron a VRBO. We knew that the location would be good but we didn’t want to add one more project to our plate.
We know from experience that unless you are using a management company to take care of the property as far as bookings, lawn care, etc, it will fall on you.
While we may look back and regret it someday, we decided that we didn’t want to take on that responsibility and are selling it.
While the costs can be minimal like with our vineyard, they can be super expensive too.
We will occasionally look into prices of VRBO condos at different beaches that we enjoy. One huge difference between our Vineyard and these condos are the HOA fees – and they can get ridiculous!
At one beach, the lowest monthly fees we found were $500 a month and many were over $800. To us, that wasn’t worth it.
This is a big one and it ties into the next categories of goals as well.
If the property is close to home, you are able to manage it, check on it, etc. If the property is at your favorite vacation spot hundreds of miles away, managing it is more difficult.
If you choose to use a management company, there can be some negatives. For example, you are one of many places that they are trying to rent out, not their most important place, like it would be if you were managing it on your own. You would also pay management fees which will decrease your profit and you are counting on them to have top notch staff and take care of all issues the way that you would.
Within the last year, I have had two people ask me if I could guide them in finding a place to rent in a warmer weather climate. What they were looking for was a VRBO.
In both of these cases, they made the right decision to rent and not buy.
In retirement, they were not looking for an investment but rather just a get a way place to avoid our two Ohio four letter words – cold and snow. Renting for a month hundreds of miles from home and letting someone else manage the property fit their goals and needs perfectly.
So when you think about real estate investments, don’t forget that there are more options than the traditional commercial and multi-family scenarios.
If it is right for you, a VRBO could be a great experience. It was for us!
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