To The Average Joe Who Wants to Own Vacation Rental Property

Braxton Voyles

Ever thought of owning vacation rental property? You can! Even the "Average Joe" can do it. I know this because I’m an average Joe. At least I was before I started building wealth as a vacation property owner.

Imagine having your own vacation rental property where others are paying the mortgage while you benefit from the price appreciation that’s typical with vacation properties. Oh, and even better! You get to use the property yourself.

Let me tell you how I got started, in hopes of showing you that vacation property ownership is within the "average Joe’s" reach.

In 2000, my sister invited me down to Jacksonville Beach, Florida where her family rented an old beach cottage for a week. I rode my beach cruiser around the neighborhoods and noticed many of the little beach cottages, condos, and houses were for rent for short term vacation renters. I had always been interested in real estate but never had the money to begin investing, but this piqued my interest. The thought of owning beach property that my family could use and rent out in the meantime was intriguing.

I began to call on some of the "for sale" listings and my enthusiasm was quickly tempered when I learned that an 800 square foot condo cost more than my 3 bedroom home in Tennessee. But then the thought occurred to me that every market is different and surely there was a beach market with affordable properties.

When I got home, I began to ask co-workers (at my insurance job—average Joe, right?) where they vacationed at the beach. Several people told me of Florida’s Emerald Coast. In fact, one lady gave me a directory of vacation rentals from Panama City Beach to Destin. There were hundreds of these properties. Surely, with this much volume, two things were certain in my mind: 1) lots of people must be vacationing there and, 2) competition should make prices relatively affordable. I was right on both counts.

My plan for financing the purchase of my vacation rental property was to cash out a $12,000 pension benefit received from my previous employer when I switched jobs earlier in the year. After all, the fall of the dotcoms had already damaged the stock market, and I was less than enthused about putting my money in stocks. I headed to the Emerald Coast on Labor Day weekend of 2001 to try my hand in the real estate market.

I had in my mind 2 bedroom condos for around $100k, since that would fit my family’s needs best. As we looked at properties, it was evident that a 2 bedroom condo was going to be too far outside of my $100k price range. It was then that I learned a valuable lesson in vacation property ownership: it is for an investment first, for personal use last. We found a cute little one-bedroom 700 square foot condo in an upscale beach community where one realtor had told me "you’ll never find something in that price range here." Well, we did and we made an offer for $109,000 and the seller accepted.

This was a rather interesting time to purchase vacation property as September 11th occurred while we were contemplating making the offer. We came close several times to dropping the idea since travel and vacationing seemed to be the furthest thing from the general public’s mind after 9-11 hit. But the thought occurred: Americans won’t stop taking vacations but may change their vacation habits. Where people were FLYING before, they will simply DRIVE to closer destinations for their vacations. Our intuition turned out to be correct and we were able to list our property on the internet, renting it out ourselves and hiring local cleaning and maintenance people to help keep an eye on the property. We’ve managed to break even every year and have enjoyed many marvelous family get-a-ways.

Property appreciation? We’ve enjoyed that as well. Three years after our purchase, we were offered $350,000 for our little condo, and we turned it down because the offer was way below market price and admittedly, we’re still enjoying the property too much to sell right now.

The price appreciation enabled us to tap some of our equity and with no money out of our pockets, we purchased a second property in 2004 - another one bedroom condo for under $130k. But we had to move to a new market—this time in a beach community on the other side of Florida, near Daytona Beach, where prices were still affordable. The model worked again: Guests cover the mortgage; we enjoy the price appreciation and the use of the property. Eighteen months later, prices for similar units well surpassed $200,000. So we tapped the equity in this property just enough for the down payment and closing costs on our 3rd vacation rental: a three-bedroom condo in a beautiful gated resort near Disney World.

For our fourth property, we opted for something a little closer to home. Once again, using equity from our properties and using none of our own cash, we bought a two-bedroom cabin in the Smoky Mountains of Tennessee.

Since becoming a vacation rental owner, I have met so many people who say, "I thought of doing that but..." But, but, but. Don’t let that be you. Any "Average Joe" can do it.

About The Author
Braxton Voyles, Ooltewah, TN, USA
bvoyles@centurytel.net
More Details about vacation rental property here. Braxton and Eileen Voyles manage vacation rental properties in Florida and the Smoky Mountains of Tennessee. Braxton also consults others who wish to venture into the vacation property management.

Article courtesy of IdeaMarketers.com