It’s hard to believe we’ve owned our mountain rental home for about a year now. We knew NOTHING coming into this experience, and boy have we learned a lot. I get a ton of questions about our home and how we make it all work, so I thought it would be a good time to give you all details as to the HOW!
We owned a “long term” rental home in Denver. We had tenants usually stay for year long leases (or not, but hey, life of a landlord!). While we were making money on this rental each month, we had enough appreciation in this home that we thought it was best to pull out our equity and purchase something new. We were able to sell our rental home in Denver, and use ALL the proceeds through this sale through what’s called a 1031 Exchange (basically, it’s a tax free way to sell your investment home and use all the proceeds to buy a new rental property, restrictions, of course involved!).
We knew we wanted a mountain home that we could not only enjoy ourselves as a family and with our friends, but have something we could also make money on. Read all about the home here on a past post.
Let’s start with what we would’ve done differently:
- Probably start with a smaller home! HA!
- Start managing it ourselves, and not use a company to get us started
Our home sleeps 10 people comfortably, and that’s exactly what we wanted. We wanted enough space to have our friends and family join us for weekends away from the city. But, with a big home, comes BIG parties and BIG groups of people. For the most part, people are respectful of our home. But GOOD LORD, we’ve add some wild stories, too. Everything you can imagine from kids drawing on the walls, blood on the sheets, gross hot tub stories, things broken, trash. Oh yeah, someone even thought it would be funny to rearrange our living room (I mean, whaaaaat?!?). Thank GOD for our cleaners who are our eyes and ears for everything that happens in our home. Since we stay at the house and visit frequently, I think we take these horror stories to heart and so personal. We’ve really had to distance ourselves from the fact that some people really just. don’t. care. about your space. Again, I would say the majority of people have been respectful of our home, just a few random, assholes.
- If you’re considering a short term rental home, and if we were to do it all over again, I would start with something small. A small house or condo that can easily be managed from afar, so you can get your feet wet instead of having to jump ALL IN as we did with a large home. Now that we are one year in, though, and finally feel like we have our groove, we LOVE our home and love how many people we can squeeze into it
Another lesson learned. We started using a management company called Evole to help get us started on all the websites. They helped us take pictures and get our profiles set up on all the third party websites. They helped with bookings, and with all that, we paid them 10% of each booking. While our home was listed on all major rental sites (AirBnb, VRBO, Home Away, etc.), we feel the company really pushed people to book directly through their own website. We felt our exposure was very limited. Also, with Evolve “running the show”, we weren’t able to communicate too much with guests directly, and all reviews that came in for our home, went directly under Evolve’s website, we didn’t get to keep any reviews (and in the short-term rental world, reviews are EVERYTHING!).
- What we learned–we should’ve switched over to hosting and doing everything ourselves from the very beginning. We LOVE that we’re able to communicate directly with our guests and we love having our own profile and our own reviews. It’s been such a fun experience and we wish we would have started out on our own initially (but hey, you live and you learn!)
Another thing that I think is so important as well. Make sure you have a savings account set up for just your rental home. While you’re getting started, you may not have a lot of bookings. You’re still responsible for the mortgage and all bills, so when we purchased our home, we made sure we had 6 months of reserves set up into a savings account. Any extra money we make each month goes directly to the savings account…for now. The dream is to eventually have more properties that are an income stream for us, but at this point, we’re saving every penny we make.
- With all the craziness lately in our economy and the scare of the coronvirus, we’ve had all our guests cancel their trips for at least the next two months. March was going to be HUGE for us with spring break. We were booked almost every day in March. When people started cancelling their stays (which we knew may happen), our profits went way down. Another reason we are thankful we had a savings account set up.
If you’re looking to book our home, here’s the LINK! We love that we’re able to share our home with the world (literally), make money, have another real estate investment, and of course, be able to share our space with our family and friends. Our goal is to add to our real estate portfolio with more long-term rentals, and also short-term rental homes (I’m thinking the beach, or a hip city condo).
As always, if you’re looking for guidance on your next real estate purchase (be it an investment home or new primary home), I’m your girl! Because, I’m all about #allthingshome and love being your real estate guide.