Owning a Vacation Rental

Dated: April 22 2019

Views: 379

Gail and I purchased a vacation rental in North Carolina. It’s a cottage we have dubbed “Otter Cottage”. We kinda like the idea of the cottage having a theme, one we can decorate to and brand the place with. I have many clients here in Fort Myers doing vacation rentals but I have never done it myself.

I’ll give you a run down of the process so far, you may get some ideas for yourself. I would also appreciate any suggestions. After going through all this I am sure I can help clients  trying to do the same thing in Fort Myers.

Why?

Well, we had been renting the house next to the one we bought for the last four years. We love the location. And in a few years, we want to use it more and more.  It will give Gail and I a project to work on together and a place to head up to get out of the heat of Fort Myers in the mid-summer. It also gets us into that local market so if, in a few years, we want to sell it and buy something else, we can afford to.  (Sound Familiar? Read get on the escalator)

We are treating Otter Cottage somewhat like an investment and have  marketing it and renting it out when we are not using it.   We plan on eventually adding a master bedroom suite onto this small cottage and building it with lock out “owners closets” and a storage room so we can keep our stuff up there while renters are in possession.

My research shows me that the improvements we are adding will raise the value of the home more than the cost of the improvements. The addition will actually turn the cottage into a “dogtrot house”, allowing the breeze that flows down the mountain to actually run through or between the two parts of the house.  (See dogtrot house info).  When I first described to a North Carolina builder what we wanted to do, he enlightened me by saying, “Oh, you want to build a dog trot house. (I had never heard the term before).

We are also counting on Otter Cottage as part of our retirement plan. We are using some of our permanent homes equity to get a loan for part of the Otter Cottage purchase. We will pay this off quickly and that equity build along with the increase in the house value from improvements will form part of our retirement nest egg.

Initial Steps

Gail and I were originally looking for land to build a house on. We looked at many resale as well as new houses and lots of land. We wanted river front near woods and hiking.  Every lot we looked at was at least 75% of what we paid for Otter House. If we had to build, it would have wound up costing us twice what Otter House will  finally cost us  WITH THE COST OF THE ADDITION. And we already loved the location of Otter House and knew it well. So Otter Cottage it is.

I researched VRBO, Home Away, and vacation rental sites to see what homes were renting for.  I then contacted owners of vacation rentals all around the Murphy area where we bought and talked to as many as I could. I did the same thing for homes around where we live in Fort Myers.  I got advice on cleaning, what to offer, how much to charge and learned some of the “DOS and DON’TS”. This was extremely helpful.

On VRBO – which is a site Gail and I had used to rent homes though, I registered as an owner to see what their charges were. Then something interesting happened. After I registered as an owner on VRBO I saw an advertisement on my Facebook page for EVOLVE. (Talk about target marketing!) I clicked to the ad and Evolve immediately called me.

Evolve is a service that will guide you through the entire process. They will advertise your vacation rental, take the pictures, arrange payment systems, and insurance, and put your vacation rental on numerous other sites including VRBO - All for a 13% fee. (They advertise that their fee is 10% - but this is flat out not true as you are REQUIRED to use their merchant credit card payment system that costs an additional 3%).

We have a  website www.OtterCottage.rentals. The website has the basic info and about 75 pictures of Otter Cottage. Please check it out and let me know what you think.   This week Gail and I close on Otter Cottage. We are heading up with a few publications from Evolve as to how to out fit the cottage and we will get to work prepping the place.

We have not decided who to list the home with  - but I am leaning toward Evolve for the first year to build up clientele. Based on reactions from friends who I have told about Otter Cottage, Gail and I  will not have a problem filling at least two months from referrals on our own.  (Evolve and VRBO let you rent it on your own – hence the website )

Stay tuned.  If you want to rent Otter Cottage, let me know!)

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Gregg Fous

Real estate has been my passion since I took my first Al Lowery class on real estate investing in the 1970’s. I vowed during that class that I would buy one property a year. Over the next five ....

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