I live in a small community some with nearest to a much larger town in the Midwest. My family and I built a largish house on 40 acres a couple miles outside of town. The original farmhouse that was here on the property remains. I’ve had it rented for a long time to a family that as well under market rates but the property is in very poor condition. It was that way when they moved in, and I don’t really think they have done anything to make it worse. To be honest I’m not sure they could.
I fully realize this is a situation that needs rectified and understand what the steps are that need to be taken.
What I have been trying to figure out is what kind of property I want to turn it into. The house itself is structurally in good condition but in need of a full remodel. It is formerly military housing from WW2 that was moved from the base on to this property in the 50’s. If the house were anywhere else but right next to me I would put a nice addition onto the back of it and make it larger and either rent or sell. I’m not interested in selling it though, and to be honest I’m not sure I want a larger house in such proximity to mine. If I try to remodel as it is, I would probably remove one bedroom and make it a two bedroom house with a little bit more open floor plan. My hangup with this has been that a remodeled two bedroom house would only rent for a couple hundred dollars more than what the people there are paying now. So, the remodel cost really doesn’t pencil out. This is why I have allowed the situation to continue this long.
Something I have been considering is turning it into a log cabin type property in making it look like you hunting or fishing cabin. It’s got a nice size pond right next to it and I could easily put in some fishing facilities and stock it.
It seems like you’re considering two extremes; either a full remodel, or fishing cabin.
I wouldn’t want someone living next door to me that didn’t mind living in a hell hole. I mean, what’s that like?
If you can afford it, it would make sense to upgrade the house, and attract a better grade of neighbor, even if it didn’t pencil out as an investment.
I guess my question would be, what exactly do you want to accomplish? Why consider any changes, if the current renter isn’t a slob, pays the rent on time, and doesn’t bother you. I’m not sure I understand what you’re after.
Meantime, I would want the exterior of that rental to look good regardless. I’ve found that exteriors make me more money than interiors. Everyone’s an interior decorator, but nobody knows how to landscape.
No, not two extremes. Anything I do with this house will require it being vacant, and either would require at minimum a full remodel and at most a large addition. My preference would be not to make the house bigger, although for it to be a desirable Rental I think that’s what it would take. I’m going to have a hard time finding someone who has the energy to do exterior maintenance and Can live in such a small house.
Now that I think about it I guess I answered my own question. I don’t know why I didn’t think of it before. I need somebody who will maintain the exterior for me because I don’t have time to do it. If I did a VRBO rental all of that with all on me.
Yes. The reason I was inclined to think that way was that my place is very small and in the country. I think people would be willing to make sacrifices to stay in a little cabin in the country for a few days, but not to live in long term. Hence the question. I accept that doing anything with the property will require significant investment, but I am unsure about committing to spending money on the property without expanding the floor plan.
The advantage to having a VRBO rental instead of a long-term tenant would be that I would have access and use of the property when it is not been rented. I am also not a big fan of my tenants knowing where I live. Unfortunately though, this is a small town and that is unavoidable. What I like about the idea is that there are times during the year when I think it probably would bring in a good bit of money. We are near a college town where hotels sell out for in advance for football and basketball games. Also, we are near a NASCAR track where there are not enough hotels in the area. I could probably easily rent this out for five or $600 a night during NASCAR events. It’s just hard for me to project what the actual income from this might be.
Typical highest and best use discussion – but that is superseded by what you truly want and desire. It will come down to what’s more important – money or what you want. Unless the two meet. LOL.
You don’t want to see and I can certainly understand why. And the larger house close to yours is an issue. What more concerns me is that a remodeled two bedroom house would only rent for a couple hundred dollars more than current. That truly limits you. It makes the remodel unfeasible.
The log cabin/hunting/fishing sounds like an option to explore. Is this the right area? Desirable for those activities? Seasonal? What are comp rents? If the answers are good – sounds like some promising options. Good luck.
Do some research on VRBO and Airbnb to see what similar properties are available in the area. Are their calendars booked year-round, or only in certain seasons? How much do they charge? What size (bedroom count) are they? Spend some time following a few calendars and go to airdna.co (not com) and see if they have a report for that town. THat will help you decide if converting it to a short-term rental is worthwhile.
We’ve done something similar at a farm we purchased a year and a half ago. You can see what we did by searching on google for Carver Lake Lodge. We have Airbnb and VRBO listings that you can see there as well. We have two houses on the farm we rent out and did $12,000 in rental income last year, our first year renting, which I was very happy with since we are new and learning as we go.
We’ve considered going the short-term rental route with some of our KC area rentals, but found the city regulations are a bit burdensome. If you’re outside of city limits I would think that wouldn’t affect you. We’re not too far from Chief’s & Royals stadiums so those might be a good draw for tenants.
My other concern would be finding someone to handle maid service after each tenant leaves. Even if I live next door, I don’t want to have to go clean house every week or two. Should be able to find someone to handle that aspect for you without much problem.
If you’re a creative person, I think part of the fun of the short term model is making your property into a destination/mini resort for tenants, not just a basic rental. I’m personally in to fishing/outdoors so making a mini-lodge would be ideal (fire pit, providing fishing poles/bait, canoe/paddleboat, themed interior, front porch with rustic chairs/porch swing, etc)
Just have to research AirBnB and VRBO to see if projected rents support your investment.
Vacation and short term rentals are great assets to have. I would definitely recommend trying to rent the house out as a vacation rental.
Just make sure you list your house on several sites. VRBO, Airbnb, booking.com or beenest. They are all great short term rental sites to place your listing. Lately I have used Beenest.com for mine because they also offer great monthly rewards for their hosts and they have zero listing fees which I find particularly neat.
I think there is money in VRBO, but I don’t think you can take any average home. It has to have something unique, and usually that is the location. For example, in the Phoenix Market there is this downtown location where you can buy a relatively affordable condominium in an area called Biltmore. In the off season when there aren’t snow birds in town it will rent at about average or slightly above average rates on VRBO or for regular rent. However, half of the year rent doubles which blows my mind. I have been looking into doing a BRRRR in this area to give it a shot, but I know people I trust pretty well that do well if the area has high demand for any certain reason.
An interesting time to read this post … I’d have a different answer a few months ago vs now. Does anyone use VRBO or airbnb as their primary model for renting out properties and how has that been affected by Covid-19?