So you’ve made the decision that 2017 is THE YEAR to invest in your family retreat or future retirement home in the mountains! Good for you! It will be a lot of fun, and I speak from experience. I moved to the mountain town of Pagosa Springs, Colorado in 2004 and built my mountain dream home. Getting to live out your dream life is not something everyone gets to experience…I hope you do! But there came a time when I purchased another home and decided to place this home I had built – my dream home – in VRBO and realize income produced from the property. Maybe this is what you’re considering for your new second/vacation home and I am sure you’re worried about it just like I was.
For many, rental income from their vacation home provides the means to maintain the home. It is a definite growing percentage of vacation home purchasers nationwide. If you’re like me, a few of the many questions you’re pondering are how much income might be generated, how easy is it to do or how do I even go about it?
For me, there were lots of emotional and financial peaks and valleys associated with renting my home and I want to share the tips and tricks I would do again when placing my vacation/second home in a short term rental market. First off, notice I called it my ‘dream home’? My first couple of rentals were tough emotionally – however – when that rental income hits the bank, you’re going to be surprised how it suddenly feels better! Cha-ching! I now know I should have set the furnishings up a little differently, should have better clarified rules and regulations with clients…and resulting fees or fines if rules were abused and many, many other things. I will expound on my suggested tips and tricks in Part Two: “Tips and Tricks I Wish I Knew Then” but suffice it to say that for a time, with each new rental it seemed some amenity was removed that was previously available due to an abuse until no more surprises seemed to happen. I had achieved the lovely plateau of smooth sailing and happy renting! And happy bank account! I want to help you achieve these same results…but with more peaks and fewer valleys.
So as you contemplate this new business venture, the #1 consideration is, what are you going to charge per night? As you develop your business plan for this new rental income stream, you need to check out your competition and see what they’re charging. This is easily accomplished by going online to check out your other neighborhood rentals on sites such as VRBO, AirBNB and local rental companies. See what homes charge that sleep the same number of renters as your home does – that’s the key to prices. The more people you can sleep, the more you can charge…simple as that. But as in any other business, you need to know your competition and what their rates are.
The #2 consideration is that if your home is situated in a special location you might be able to justify a higher nightly rate. One of the most sought out locations in Pagosa Springs are riverfront properties for summertime rentals. If you can offer access to the San Juan River then you immediately attract fishing enthusiasts, and kayaking and floating lovers! These properties are prime locations and you’ll likely secure year after year return renters. Some renters love being nestled close in the town of Pagosa Springs where they can walk or have a short ride to restaurants, golf and shopping. Different strokes for different folks! (golf pun intended!)
For wintertime potential rentals in Pagosa Springs, you might be able to increase your rates for a home located closer to the Wolf Creek Ski Area so that daily commute is greatly shortened for the renter. And typically being a little closer to the ski area also means you’re closer to the National Forest for snowmobiling, snowshoeing and all the Nordic sports. But the reality –and beauty – of Pagosa is that it is surrounded by National Forest and you don’t have to go far to experience it in any direction. Skate skiing on the golf course is a great beginner’s location! And your business plan is going to love all those winter holidays and spring breaks when you can charge high season rates! You know, those rates you hate to pay when you go elsewhere? You’re going to love charging for them though! Wintertime income will likely be far more than summer income for you.
So as you shop for your new family retreat or second home keep ‘rental income generation’ in mind as you prioritize properties you like. Unabashedly I don’t think you can find a better rental area for a vacation home than San Juan River Village in Pagosa Springs. It is located 6 miles from town towards Wolf Creek Pass and the ski area and many of the homes are on the banks of the San Juan River! Yes, it is where my home was and where my next home will be built. And the folks that bought my home? They’re fellow Texans and you’ll find their new vacation home on VRBO!
Want a great idea for a San Juan River Village vacation home that would make a great rental? Check out this gorgeous home the “Blue Bear Den”!
CLICK HERE for information on Blue Bear Den