Michelle Garcia, Realtor with Windermere Coeur d’Alene Realty interviews Cheryl Lantz, owner, Vacation Rental Authority.
We discuss local Coeur d’Alene Real Estate and the ups and downs of vacation rentals, long-term rentals and what investors need to be aware of before buying the next investment property.
Vacation Rentals vs. Long Term Rentals for Investors
Long Term Rental Pros
Consistent monthly income
Fairly predictable income & expense
Right purchase cash flows
No furnishing cost
Right management team increases rents & minimizes turnover expense
Lower percentage management fee
Possibility to self-manage
Tenant has upkeep responsibility
Easier to find long term rental properties, not limited to only VR friendly cities, neighborhoods
Very high demand in current market conditions
Less turnover = less attention req’d, set it and forget it
Quick start up, VRs take time to reach potential
Long Term Rental Cons
Competitive market to purchase best deals (Seller’s market)
Risk of significant damage between tenants
Increased propensity for wear and tear
Potential of lease violations
Reduced inventory, only certain neighborhoods would work for VR
More weather dependent than LT
Plan on Vacancies
City restrictions, subject to strict code enforcement
Hoa restrictions on VRs
Out of area VR shut down in the off season.
Generally less overall annual income potential
Vacation Rental Pros
Right property has significantly higher annual income than long term
Increase in lifestyle with vacation home your family can enjoy
Powerful local management team available
- Pay for themselves with increased nightly and occupancy (compared to self-managed or competition)
- Care for guests and property for ease of ownership
- Low damage risk (Guest damage is paid for by local management company)
Ability to gift a stay at your VR to friends or colleagues
Could include as an auction item for your favorite charity.
Vacation Rental Cons
Higher start-up costs in terms of furnishing and stocking
Higher annual upkeep and maintenance costs to hold to hospitality standards
Costs include utilities, wifi & cable
Very time consuming for self-management
Inconsistent monthly income
Unpredictable income & expense the first year
2 years to reach income potential
Cheryl Lantz – Vacation Rental Authority
Living my dream as an entrepreneur, business owner and investor in the beautiful northwest, I lead the professional caring team at Vacation Rental Authority. Our mission is to create growth opportunities through professionally managed properties. To this end, we offer residential and vacation rental management services in Coeur d’Alene and the surrounding areas.
Since our founding in 2012, we’ve continually grown and improved services in an effort to best serve our clients.
As a result, VRA developed top notch vacation reservation services, housekeeping, leasing, real estate sales (Professional Realty Services Idaho) and boat rental division each lead by professionals on top of their game. Together, we work passionately and effectively to provide excellent results, continually improve ourselves, contribute to our community and grow the local economy.
Proud recipient of Idaho’s Best Places to Work 2016 & 2017.
Cheryl can be reached at vacationrentalauthority.com