It’s no secret that vacation rental investments have become an incredible way to generate wealth. And certainly here in Branson there is tremendous opportunity to acquire a wide portfolio of real estate investments. At Worley & Associates this is what we specialize in and, as an up and coming investor myself, was ultimately why I decided to join this firm.
My broker Jeramie Worley literally wrote the book on owning a vacation rental in Branson called “Myths, Management, & Mastery of Vacation Rentals.” You can pick up a copy on Amazon.com for $15.00 and I’ll post the link here. I highly recommend you read this if you’ve been tossing around this idea. Its a very easy read and I think I finished it in a couple hours.
Some of my clients are Branson locals that have been hearing through the grapevine about the income possibilities in owning vacation rental in Branson. Maybe you’ve been coming to Branson for years with your family and reading this thinking to yourself, “Why wouldn’t I just get a place I can come stay in whenever I want and then rent it out the rest of the year?” Once you get your wheels spinning this way you are thinking like an investor.
There are many things to consider before buying a vacation rental in Branson.
Are you wanting something to enjoy for yourself? Is this some place you want to retire in a few years and are looking to get the mortgage paid down in the meantime? Or are you wanting something that is going to be paying you out year after year? Figuring out your investment goals beforehand and discussing them with your Realtor will help decide how you make the purchase and structure the deal.
Owning a vacation rental in Branson is like operating a hotel in many ways. And some people really like the idea of owning and operating a business. But there are those that can’t stand the idea of dealing with people asking a million questions through email and getting a phone call while you’re out enjoying a nice dinner with your sweetheart. Definitely a big decision to make.
Of course you will hold onto a much bigger chunk of your profits if you decide to manage it yourself. There are ways to minimize the phone calls and inquiries and these are mentioned in the book. But for those who have no interest in dealing with all the ins and outs of the daily operations you can certainly have a property manager take care of it for you. Just know that property managers can typically take between 20%-40% easy.
For our investor clients at Worley & Associates we do offer another solution with a trusted service partner called Evolve Vacation Rental. They offer an unrivaled 10% booking and management fee. I will post the link to their website here.
The success of your vacation rental in Branson will depend on first impressions and your online reviews. Nothing will hurt you faster than a bad review about the place being unclean. Having a good relationship with your cleaning crew and paying them well will be worth every penny. You want someone you can trust who can provide a consistent level of service day in and day out. Another important thing to remember is cleaning fees are charged to the guests so you want to make sure you’re pricing appropriately. ($60-$80/unit is pretty standard here) Again TAKE CARE OF YOUR CLEANING CREW! I cannot stress this enough. They are the backbone of your business.
Operating a vacation rental in Branson averages about 160 nights booked a year. If you’re a new investor you want to do your own due diligence and run your numbers. Get on HomeAway and AirBnB. Look at properties like one you got your eyes on and see what they’re renting for nightly. You can look at the calendars and see how booked they are. Then weigh income projections against your expenses.
Here is a list of expenses you can expect to incur when owning a vacation rental in Branson,MO.
- Debt Service – Principle and Interest, PMI if applicable.
- Credit Card Fees (usually 2-3%)
- Advertising (Check AirBnB and Homeaway prices. You can pay per booking or per year)
- HOA Dues This can make all the difference in ROI in some places.
- Insurance – You’ll need a commercial policy for liability and property damage.
- Real Estate Taxes
- Management Fees if you are not going to manage yourself
- Supplies (TP, Replacement Towels and Linens) Some cleaners provide cleaning supplies. Some don’t
- Utilities (Electric, Water, Cable, Internet, Trash)
- Misc Budget for Repairs and such- Have reserves in case the HVAC system or something else goes out.
- Furniture / Electronics / Décor budget