How to get your rental property to cash flow
I own a one bedroom condo at Copper Mountain. I have tried renting it through Copper Mountain. We got great rentals but little income as Copper ended up with about 55% of it. I tried another company, not at Copper, who only charged 35%. They rented it less, but I made about the same amount of money as they took less. Well, less wear and tear anyway! The company ended up going bankrupt and I lost all my summer income.
I finally decided that I would rent it myself. It is surprisingly easy, and this winter I have brought in about $20,000 in rental income, with perhaps 10% of that going to expenses. I have a mortgage on my condo, plus Homeowner association dues and Village Association dues. I don’t use it myself as I only live about 10 miles away from it, so it really needs to cash flow. This year, I have come very close to doing it, for the first time in the 5 years I have owned it.
My secret is the internet, plus a local flat fee rental management company that arranges the cleaning, sends out confirmations and arranges key pickup. All I have to do it put it on the various websites, handle the inquiries and make the bookings. Oh, and put the checks in the bank. I have written it all down and will be happy to email it to anyone who wants it. I will post excerpts from my article here over the next couple of weeks, so check back or ask me for a copy of the entire thing. The beauty of it is that you don’t have to live here to manage it. You can live in Atlanta or Tampa or St Louis; all you need is the internet connection.
February 26th, 2007 at 11:32 pm
Hi Joanne, what do you mean by “it really needs to cash flow”?
February 27th, 2007 at 8:31 am
Hi Cara,
I meant that it has to pay for itself. The income needs to equal the expenses; otherwise it is a huge drain on my savings account! You can only make up what you don’t get in income for so long, and then it is time to sell it. There are tax breaks that really help once you file your taxes, but to me it is a matter of making enough for it to pay for itself.
March 6th, 2007 at 9:13 am
Joanne,
Can you email me the article you referred to here. I have a 1 BR in Passage Point and am trying to increase my cash flow.
Thanks,
Kevin
June 23rd, 2007 at 8:01 am
Joanne: please email me the article, I’m considering investing in a vacation rental property
July 8th, 2007 at 3:51 pm
Joanne, Great information specially coming from someone who is actually doing it herself. As you know from Activerain, I specialize in Vacation Homes in the Orlando area and I am planing to open a rental company to go along with my real estate business. People that own vacation homes in this area are usually not from around here, most are even from out of the country. For them a management company is a necessity.
July 8th, 2007 at 5:23 pm
Carmen, Our management companies charge so much that it is tough to make any money as an owner, even though you are the one with all the money tied up in the investement. I understand that Florida companies charge less. I have a friend here who owns a management company and he says that he cannot do it, do it well, and still show a profit for less than 43%! I believe him. I hope your venture will go well for you! Thanks for the comment!
January 10th, 2008 at 6:38 am
Hi Joanne,
I have a condo in Charlotte N.C. and I am currently using my savings to cover the costs. I would love to read your entire article. You have inspired me to do it myself. Could you email it to me?
January 10th, 2008 at 6:53 am
Jay, it is on its way! Good luck, and let me know if you have any questions.
February 15th, 2008 at 9:26 am
[…] How to get your rental property to cash flow […]
March 3rd, 2008 at 3:39 pm
Joanne:
I have a one bedroom condo in Jacksonville,FL that is completely draining me since I had to move to another town. I have tried to rent it out with no luck. I would really like to read your article for tips on how to go about this the best way. Will you email me the article?
Thanks,
Keri Stirling
March 3rd, 2008 at 3:59 pm
Keri, it is on its way. It really is designed more toward short term rentals, meaning 3 nights to a week or two. Hopefully it will help. I take it you have not been able to sell it in your current market. Good luck! I know things are tough right now in parts of Florida.
July 8th, 2008 at 2:52 pm
Joanne,
Interesting tips. I have been considering investing in ski rental properties and have been looking for further “numbers” info. I would love to read any further insight you might have in maximizing the investment. We are in Connecticut and would certainly(and unfortunately) be managing the investment off-site. Thanks, Chris Brophy
July 9th, 2008 at 8:51 pm
Hi Chris,
I will email you the information. Thanks for the visit!
Joanne
July 21st, 2008 at 3:18 pm
I would appreciate if you would forward the article you referenced. Also, do you recommend a fee only property manager in Summitt County?
July 21st, 2008 at 3:22 pm
Hi KZ, I will send it off to you. I use www.bookbyowner.com and they do a good job for me.
July 11th, 2009 at 11:23 am
I am considering buying a condo in Phoenix, mainly so I can visit my kids/grandkids more. I live in the southeast but could easily handle inquiries and bookings online. I would appreciate the article you mentioned. Thanks much!
July 11th, 2009 at 1:02 pm
Hi Karen, it is on its way. From what I understand it is a great time to buy in Phoenix! Property values are down more there than a lot of other places.
August 3rd, 2010 at 4:21 pm
I am looking at buying a condo in Keystone. It is now a buyer’s market and I can get a fairly good deal, but the occupancy rates seem to be on the order of only 30% - I don’t know if the brown forests killed by the pine beetle are a factor or not. Is it harder for you to rent your condo now than when this article was written (January 2007?)?