Newbie question: Best places to buy a vacation rental in the midwest?

It hasn’t been hard or stressful for me either, but like you, I host in my home, which makes a big difference, being on-site.

I didn’t mean to make that sound like an across-the-board reality, but the OP is planning on being a remote host. I guess if he just hires a property manager to take care of everything, it could be pretty stress-free, but I’ve read a lot of posts where the hosts had no end of trouble with their managers.

And all it takes is a couple bad bookings from partiers the managers didn’t vet properly to see profits go down the drain.

2 Likes

I think I can help answer your question as someone who has been renting inland lake homes in WI and MI since Covid hit. There’s a shortage of lakefront properties on the market right now as wealthy urbanites from several states seek out a Covid retreat for their families for the next year. We don’t plan on sending our kids back to school until at least Fall 2021 which means we’ve been keeping an eye out for waterfront property anywhere within 4 hrs of Chicago (and others are similarly thinking 2-4 hours from Milwaukee, Madison, etc) where our kids can run around outside and swim all Summer.

While many of the places we’ve been renting were fairly full this Summer, this certainly isn’t the case after October 1 so keep in mind that you’re looking to make most of your income in the period between June-September. From what I see on the calendars of the 4 homes we’ve rented this Summer, all of them are totally open after October 1 2020 until July 2021. Homes on full rec lakes seem to be more in demand as boaters like to water ski and tear around on jet-skis, etc. – we try to avoid these lakes and prefer no wake lakes but we seem to be in the minority.

Having a pontoon boat (they appear to go for around 40k used) seems to greatly enhance the desirability of a lakefront rental and any place that offers one goes to the top of my list. (It’s difficult to use many of these inland lakes for swimming and floating, etc. unless you can get out into deeper water where there are no weeds and lily pads, etc.). All lake homes we’ve browsed have a supply of kayaks, canoes, rowboats, and SUPS (available for free along with life jackets, etc) and I would imagine that keeping all this stuff maintained and operational all Summer might be a bit of a headache. (guests are going to misplace oars, paddles, etc.)

I also noticed that in order to draw guests out in the winter, some rentals offer snowmobiles and ATV’s so keep in mind that these will be your competition for the few guests that do want to venture our in winter months (and maybe there might be a bigger season this year as people flee the city?) All of these things sound like liability nightmares to me but these are some of the things I’ve noticed in the past several months. Lower end 2-4 bd homes that are around 300k on an inland lake seem to fetch around $200-250/night in the high season (Summer) while really nice 4+ bd lake homes (closer to 1 million) go for $500/night or more. Oh, and lots of renters also want hot tubs (yet another maintenance headache so make sure you have a strong management company)!

2 Likes

I wonder if those folks offering snowmobiles have liability insurance. I’m sure covering folks who may have no experience with will not be cheap.

I wouldn’t be offering ANY kind of boat or other device. But I wouldn’t offer bicycles, either, and I’m an avid cyclist. I don’t want to lose my house because someone is injured or dies.

3 Likes

Yes, the big problem I see managing inland lake rentals is that guests expect all this gear to actually use the lake… Not to mention fire pits (and firewood), charcoal or propane for the grills, etc. I saw guest complaints in the many reviews I read (I must have looked at over 50 listings) whenever any of this stuff was missing or inoperable (esp when the hot tub doesn’t heat… oh man…)

While a Great Lake property is going to be a more expensive investment (we’ve stayed in South Haven, St Joe, and New Buffalo in MI) they don’t provide any more gear than a beach umbrella and some folding chairs & grill in the back. Less liability issues and much lower maintenance for the management company.

This forum is full of information. I have do a homeshare but am aware of some problems that are common to both homeshare and remote whole home hosting. Research the laws thoroughly including any pending legislation. The rug can get pulled out from under you pretty quickly, similar to what has happened with COVID. When budgeting find an insurance agent who really understands what you are doing. Many companies have exclusions for short term rental. Have a Plan B in the event that you vacation rental venture falls through due to pandemic, legislation, municipal ordinances, horrible neighbors, etc. Short of selling, for many the option is to convert to a long term rental. You will see some advice to be pet friendly. I would disagree. All of this advice doesn’t sound like location advice, but laws, insurance requirements, etc vary a lot by location.

4 Likes

Looks like Salebote has left the building

If they don’t hear what they want to hear that often happens.

1 Like

I have not left the building. I’m simply being a sponge, and absorbing what everyone is saying (and also interpreting a pervasive bitterness coming from a few of you…).

I’m someone with a positive (yet realistic) attitude, and I’m happy to see some comments from others that share this mindset. Are there pitfalls and negatives and things to look out for in any venture? Of course! I don’t see the benefit in dwelling on these things or hammering them into a newbie’s head. As Debthecat revealed explicitly with her comment, there’s a strong sense of anti-competitive sentiment here, which I don’t support. I believe competition is great. I agree with Annet, and find that embracing competition often leads to the best results for everyone.

I’m very thankful for the information I’ve received here thus far, especially from @chicagohost, @dpfromva, @Annet3176, and @KKC. I appreciate your level-head and ability to see beyond your own POV.

I do believe this is as great a time as any to buy a STR investment property, a thought that has been confirmed by other hosts I’ve been connected with through my realtor (who’s also a host), and who have reported no negative impact from COVID whatsoever on their AirBNB rentals, with the exception of condo-like properties that utilize common areas and shared access entries.

What’s more, interest rates are low, the end of the summer is near (read: people are selling), and the prices for a vacation-ready single family home in the midwest are more than reasonable, especially when compared to my home state of California.

Someone mentioned that a large majority of hosts on this forum are live-in, and perhaps this explains some of the bitterness. Of course, no one wants to share a space during COVID. But a single family home beside a scenic lake that a family can call their own? That’s a different story entirely, and seems a golden opportunity for me.

1 Like

Don’t mistake our clear eyed and freely given advice for bitterness. There are some bitter members of this forum but none of them posted on this thread.

8 Likes

Not bitterness. I guarantee that once you deal with AirBnB AND with guests that don’t pay attention to anything, you too will become a cynic. Cynicism is not bitterness.

2 Likes

No, and what you characterize as bitterness is simply pragmatism. Why would I, as a home-share host, feel bitterness towards someone who wants to host an entire place? I love home-sharing, get great guests, and entire home hosts aren’t my competition at all.

Sure, I miss being able to host during a pandemic, but that’s nothing to feel bitter about- it’s just how it is.

2 Likes

Not bitter, just experienced. I grew up in the hotel/ resort industry, with my family owning four vacation hotels including one on an island and there is little that I haven’t seen.
I have been a real estate agent, successfully managed 420 homes for a welfare agency and now semi retired and doing the STR thing with 4 of my 10 investment homes. My gross income is over $200k … I think I know what I am doing!
Tell us your background, experience and skill set, STR isn’t for everyone!

2 Likes

I think I’d like to be your friend.

:stuck_out_tongue_winking_eye:

JF

2 Likes

That’s just the STR…:stuck_out_tongue_winking_eye:
I thought we were friends???:kissing_heart:
Currently restoring a family home on a Greek island… wanna visit?

2 Likes

Yes. I hope I live long enough to do it.

2 Likes

Regardless of what you call it,
Bitterness (@salebote)
Clear eyed…advice (@KKC)
Pragmatism (@muddy)
Cynicism (@NordlingHouse)
Experience (@debthecat)

The message is consistent, joining the short term rental host pool is not a decision to taken lightly.

There are some guests who are simply “different” (aka bat sh@$t crazy), some will try to take advantage, some will cause damage, but any/all business owners have to deal with those people. For me it was a living & learning experience.

I agree with @kkc, I’ve had harder jobs than hosting. However, the naive perception seemingly held by many is you list & sit back & money just rolls in is common. I worked hard & worked crazy hours.

4 Likes

Yep, if ONE more person says to me that STR is easy money, when all you need to do is change the sheets on the beds and give the bathroom a ‘swish’ - I WILL bitch slap them!
Just wait till the first stay of a pseudo hotel inspector!
‘Hidden dirt’ OMFG!

6 Likes

I think this is common in my area too. I don’t have any STR after 10/1. I checked with 2 neighbors with STR—the same. I then outright snooped on the calendars of my close-by competition on VRBO & Airbnb—NO ONE had anything after 10/1.

Renters are making decisions to travel last minute & to see if areas “lock down” again in October & November.

It has given me a level of rental uncertainty I’ve not had before. I can’t ride the wave of uncertainty so LTR for now, here I come.

1 Like

I get the “Passive Income” comment quite a bit. Passive my ASS!

6 Likes

Yes please :slight_smile:

Which Greek island?