- December 6, 2016 at 7:03 amBruceWKeymaster
As a Colorado Springs property owner, you are determined to hold on to your property through the recent downturn. After all, that’s what investing in real estate is all about! You may even be thinking of buying in this current buyer’s market. If you are wondering how…when it’s a already a challenge to rent properties you have, then read on.
Colorado Springs is an interesting market. Since becoming a Colorado Springs property owner, I have seen highs and lows. There was the boom of high-tech in the seventies; and then record foreclosures in the early eighties. I saw the Condo across the street, sell for $36,000, which has been appraised at $130,000! No longer true. With the military away, this negatively impacts the Colorado Springs rental market; and with real estate market generally sluggish, and foreclosures rising, we face challenges with Colorado Springs property rentals in 2007 and 2008! A great time to buy, but how do you keep property rentals full and mortgages paid? How do you avoid becoming yet another foreclosure statistic while waiting for the next high?
Let’s Do the Math: With this new genre, your rental is full 75% of the time, at 3 times the normal lease price; add an extra investment of 10%; less a 20-25% commission? Does this put you ahead? You bet it does! This solution is not for the faint-hearted–but for the more determined, aggressive, and adventurous and successful property owner. Before we dive in, though, have your heard the expression,”Doing the same thing over and over while expecting different results, is the definition of insanity!” Lets take a look at three real estate property scenarios, two of them I believe are insanity in this present market; but one is a really good solution.
Colorado Springs Property Rental Market, Scenario 1:
You are running expensive ads in the newspaper and online–showing your rental property to risky potential renters, dodging discrimination law. Taking applications and running credit checks can get costly and in a soft market, with little to no results. Tenants sometimes cause more damage than what they pay; with eviction an undeniable nightmare for both! Then there are months when it is empty in between tenants where you will be cleaning carpet, painting walls, taking trash to the dump, etc.
Colorado Springs Real Estate Market, Scenario 2:
You have your property on the market, perhaps have moved onto another job in another town. Your house sits…and sits…and sits…Your real estate agent wants you to drop the price, buyers want you to fix this and that and the other. You pour money into the property trying to make it perfect for buyers who are kicking’ the tires, and let’s face it, it’s a buyers market, they are kicking the tires. Then you lower the price, and all this while your struggle to make the extra mortgage payment! Again…how to you stay on top, and survive the lows in order to cash in on the highs? What are the lows anyway, and when will it be high again?
Colorado Springs Vacation Rental Property, Scenario 3:
As a desirable vacation rental, your property rents for $695 week, and is 75% full. Your monthly income is $2780 a month, with $278 a month additional expenses. You income is now $2502 a month and rented 75% of the time for a total of $1876 a month less 25% commission, your monthly income is $1407 and yearly is 16,884.00…in a soft market! But wait… what if, following year the commission was reduced to 22.5%? And it was 80% full? Your rental income is now $18,008 in the second year. Did you follow that? This is your rental property in a soft market. And this includes 25% vacancy!
These are real figures, and it really happened in Colorado Springs. I have 3 homes for which I have done this, in different price ranges, and various locations.
Creating a marketing plan for transforming a property into a vacation rental includes adding value, and marketing it in smaller increments. You will market it in by-the-week units, rather than wholesaling a 1-year lease, as in traditional property rentals. It’s like buying a case of cokes at Sam’s, where each coke costs only .25. You sell in the vending machine for a dollar (add the value of convenience of the vending machine); or you sell at a Broncos Football game in Mile High Stadium for $3!
Additionally you will market to a different market segment, to include those who are vacationing, waiting to build or buy a home, and to those on temporary business trips. A good VRA (Vacation Rentals Analysis) will give you an idea of what is involved and what, if any, potential your property may have as a vacation rental.
Transforming property into vacation rentals involves imagination, creativity, resourcefulness, marketing strategy, and expertise. It may involve furnishing and decorating, creating a reservations contract, operating a reservations line, accepting credit cards, marketing properties online, maintaining websites and listings, even internationally. There are cleaning crews and maintenance crews to manage.
However, after all is paid, said and done, transforming your rental property into a vacation rental can be the ideal solution for staying afloat, making money, and increasing property value while waiting for the Colorado Springs market to bounce back!
D Nelson, graduated with BS in Advertising from University of Texas, and is Marketing Consultant Owner of The AdStuff Company ([http://www.theadstuffcompany.com]); and founder of Vacation Suites Global. She markets vacation rentals in Colorado Springs. You may contact her at firstname.lastname@example.org or Toll-Free: 888 237 8833 x 3 for complimentary VRA (Vacation Rental Analysis).
Article Source: http://EzineArticles.com/expert/Deborah_Catherine_Nelson/131158
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