Wealth Building Lessons

During the July 4th weekend I went to Las Vegas along with some cousins. Rather than book 3 rooms in a hotel at over $200/night each, we decided to stay in a vacation rental. It worked out to be less than half the price and it was a lot more fun.

Our rental was a 3 bedroom 2 bath Townhome, about 4 miles from the strip, due west of the Bellagio. The bedrooms were done in various funky themes so it felt a little more fancier than a regular home. It had a HUGE 8 feet project tv with surround sound, leather couches, a refrigerator, washer-dryer and a 2 car garage (which is important unless you want your car to bake in the 110 degree Vegas summers!) It also had free internet access. Another subtle advantage was that we didn’t have to walk through 1 mile of smoke and slot-machines in order to get from the check-in desk to the elevators!

Having enjoyed the experience significantly over a hotel room, I wondered if it was a good investment.

The owner Mark Manders, was very helpful and more than willing to answer any questions I had about investing in a vacation rental property.

He got into it because his wife wanted an investment property in a big city that they could use for their own use as well. They thought Vegas was pretty exciting, they decided to give it a shot especially since it is a year round tourist spot, so there is no high or low season there.

He had to pay a large amount of money upfront (downpayment, closing costs are usual, but in a vacational rental you also need to spend a significant amount of money furnishing the place - usually better than you’d furnish your own home!) but he’s managed to now have it pay all the monthly mortgage and other costs.

He’s able to rent them out about 2-3 weeks every month with online advertising. It takes him about an hour everyday to handle the online advertising and the information requests. He always needs to carry around a cellphone which he doesn’t like, but since he’s now getting a lot of repeat customers his life is a bit easier.

They spent a lot of time searching for the right location and amenities for a vacation place. That was one of the most difficult tasks. Many hours were invested there, but in hindsight he said it was a lot of fun, and having a good realtor really helped them.

Having an efficient cleaning company is very important since there’s a large turn-over. He had a bit of problems finding a good cleaning company and it was a hassle getting things organized since he lives in Los Angeles and not in Vegas itself.

If you have other questions, he strongly recommends How to Rent Vacation Properties by Owner Second Edition.

While he and his wife now get to travel to Vegas a lot (a tax-deductible trip, I might add), he probably wouldn’t do it again. He thinks there are better investments out there, especially since the Vegas market has not been so good in the past 12-18 months(High inventory, soft to declining prices). Plus there was the large capital outlay upfront and there’s the constant time-consuming activity of managing the place.

Even though he doesn’t think its worth the effort, if you really enjoy vacationing in a particular place year after year, buying a vacation rental maybe a much better idea than buying a time-share. Time-shares are usually over-priced by a factor of 4 to 10 times, and have almost no resale value. I’m actually thinking of buying a small condo in Southern Thailand, but the language, the distance, and the difficulty in getting a loan is making it rather difficult.

If you’d like to rent his townhome in Vegas (which I strongly recommend) you can check out some pictures on thisVacation Rental Website and email Mark at markmanders@sbcglobal.net.

Note: This is NOT is a paid recommendation.

Related Readings:

2. The Second Homeowner’s Handbook: A Complete Guide for Vacation, Income, Retirement, And Investment

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