Anyone have experience building a rental portfolio? Have banked a few bonuses over the years and now think it might be good to get into the vacation rental market. Thoughts on resources to look at, how you diligenced your rental investment, or any other things you wished you knew before making the investment?
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From someone who has started to look at the iceberg of vacation rentals. It seems like it is hard to really make good money off of them (dependent on location). I have heard where some people go in on a property with a group of friends and family and that give them the opportunity to build equity in the property still .
I'm interested in getting into the space when I have more free time. I like the AirBnB empire concept. You can even just rent a place and start an AirBnB. Very little capital needed to start.
Once you factor in the costs, real estate yields 2-3% per year. Why would you go through all that hassle when you can just stake stablecoins (i.e., no price fluctuation risk) and get 6% p.a.?
I think AirBnB is higher though right? Also, if you have 100-200+ AirBnBs and property managers for all of them, you're basically getting passive income.
AirBnB may be a bit more profitable since short-term rentals are generally priced at a premium on a per-night basis, but using property managers is likely to eat into your profit. It all depends on how much money you have, but I would only start diversifying into real estate with a net worth of at least $20m
Pretty sure real estate is higher than 2-3% a year. If you are purely buying for appreciation sure maybe, but real estate is one of the easiest asset classes to leverage against.
maybe because.. crypto is a bunch of BULLSHIT
The bullshit that yields 6.5% p.a. risk-free lol
Satablecoins = No risk?
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The most important thing is going to be the market you get into, so look into occupancy rates / paid nights per year and average nightly rates to figure out what you can expect for income each year. Ideally, you want a place with less seasonality too or a year-round draw. If it’s not where you live, you’re going to have to pay a property manager so factor in their commissions. After that, just keep in mind that the cost of homes in most vacation markets are pretty inflated post-COVID.
I have one grossing $80K a year in rental revenue. That’s up nearly 100% since pre-covid. I’d love to buy more, but I can’t figure out what the “new normal” is and the vacation home market is on fire. I don’t think it’s early anymore - there were more listings added to AirDNA in January than anytime in history.
In summary, STR is highly ROI potential but also high touch. You have 50+ lessees a year vs. one in a LTR. Ive made more money than I expected, but put in more sweat equity and wouldn’t call it yet “passive”.
Do you have any resources you can share for models when reviewing viability?
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