First of all, your possible income depends on several factors. First and foremost is “how hard are you willing to work?” You need to set up a website with some good photos and verbiage. You can use mine as an example: www.konalighthouse.com Also, you need to get set up with Air B&B and Homeaway. This is what my site looks like at www.homeaway.com
Joining one of these websites requires a lengthy set up process. There are a lot of details at the setup pages so if you are not ready you will have to start and stop repeatedly and it will take two or three hours. But once it’s done it’s done, and with HomeAway, it’s done for all their different sites at once! (Including VRBO if you buy the package). Try to be prepared ahead of time. Have 24 photos saved on your desktop so they can be easily accessed by a browser to upload to the site. Also, have all your ad copy stored somewhere that you can copy and paste it into the proper field during setup. If you write it in as you go then you won’t have it available for the next site you will be working on (like Air B&B or Vacation Rentals.com). Make it something descriptive about the property and something else about the community and the activities available. You can always make changes once you get into it. Save the ad copy to a file for future use. Also know all the details about the sleeping arrangements, prices, minimum stay, deposit requirements, refund policy, etc. before you start. Best thing to do is look at a few other people’s listings to see what they do. Check out my vacation rental at www.vrbo.com Put this number into the Property I.D. box and click GO: 19521 Follow all the links and make note of the details covered (hiking, boating, horseback riding, kayaking, golf, tennis, etc., etc.).
Once you have your website and are set up with the vacation rental websites then you have to spend maybe an hour a day fielding phone calls and emails. When you get a booking then send it to your property manager right away so they can block out those dates. Be sure they keep you apprised of any new bookings they get so you don’t double book dates.
Your possible income also depends on more than one factor. Are you paying cash for the purchase? If you get a mortgage, the mortgage interest will most likely use up all your income. But still, at lease someone else is paying your mortgage for you (the renters). How good is the property management company you are using? How many bookings are you generating yourself and feeding to your property manager?
Here is a scenario calculating potential income with a 70% occupancy rate. Let’s say you have a decent one bedroom unit in an ocean front complex and it rents for $120 in the high season and $90 in the low season. Then, let’s say each season is 6 months. Don’t forget, occupancy depends on how hard you work to keep you unit full. So 70% occupancy for 6 months at $120/night is $15,120 (30 X $120 X 6 X .7). 70% for 6 months at $90/night is $11,340 (30 X $90 X 6 X .7). Total annual gross income is then $26,460 ( $15,120 + $11,340). Let’s assume there is a maintenance fee (condo association dues) of $412/month times 12 months = $4,944. You also have to subtract insurance. Condo owner’s insurance is around $350/year. If you are renting the unit you need a million dollar liability policy which is another $350. So insurance is about $700/year, property taxes will vary, but for this example let’s say it’s $2,644/year. Let’s also assume with an air conditioner the electric bill will be $200/month; times 12 = $2,400, the net would be $9,380. This does not take into account minor repairs, if needed. So let’s say you buy this condo for $240K. That’s a 3.9% net for the year ($9,380 divided by $240,000). Of course these figures will vary if the rent is higher (more income) or lower (less income), if the purchase price is higher (less net income) or lower (more net income) and of course, if the occupancy rate varies.
You can increase your income by working harder to keep it booked more often. Some property management companies reduce their rate to 10% if you send them a booking. And there is at least one in town that only charges a small flat management fee (instead of the commission) if you book the client, collect the money, have your own lock box by the door for your clients and send in your own cleaners when the client leaves. If they get the booking they charge 20%. You can increase your income by taking advantage of these options. It all depends on how hard you want to work!