FIVE ON FRIDAY: THIS BEAUTIFUL DAY
Investment properties are purchased for numerous reasons. A vacation home. For an elderly parent or college-age child. An income property. Today we’re incredibly excited to share Lisa Ng’s story about her and her husband’s beach rental purchase in Lincoln City, Oregon. Lisa, Portland dweller and the creative force behind the lifestyle blog This Beautiful Day, wrote about their experiences and decision making process in a series of informative blog posts about purchasing, building, and furnishing their property.
1. When you first moved to Portland, what surprised you the most about the local real estate market?
I was surprised at how hot the real estate market was. We put an offer in on a condo and two other offers came in at the same time. The winning bid had put in an all-cash offer with no conditions – including waiving a bank appraisal. A few of the units we saw would likely require a bit of updating to make it look more modern and to our tastes – so factoring that into the budget, coupled with the bidding wars and rising prices – we decided to look for a different solution.
2. What led you to look at investment properties instead of buying a traditional first home?
We are ok with renting for now, so we decided to look at a vacation rental that we could lease out on airbnb instead. We wanted to make our money work for us. Many of our friends are airbnb hosts and we’ve used airbnb many times when we travel. It was a tried and true model for us, especially on the coast where demand is high during the warm summer months. We were lucky to have found the Olivia Beach development in Lincoln City. Our brand new 3 bedroom home on the coast was still cheaper than the 700 square foot condo we bid on in the Pearl District.
3. When you bought the property, it was still under construction. What was biggest lesson in working with a construction team long-distance?
We were so lucky to be working with such an amazing builder, contractor, project manager and crew. Before we bought our beach house in Lincoln City, we met with another developer and they were SO rude to us and our real estate agent. I’ve never had such an icy interaction with someone whose job it was to sell something. Obviously, they were turned off by us and we were not the type of buyers they were looking for.
If you experience anything like this – RUN!
My advice is to go with your gut and work with the BEST team possible. When I met the folks over at Olivia Beach, they were SO accommodating and just really nice people that we could see ourselves collaborating with. I look back and think, we were meant to have that first negative interaction – because it led us to the right team and the right people.
My other advice is to get on the phone and talk things out. Don’t rely on solely email to convey design ideas. Save Pinterest pictures, send them to your construction team so they know exactly what you’re asking for. You’re also going to want to go out to the site at least every other weekend because projects move fast and you want to keep an eye on things. Do build that into your schedule and don’t plan any crazy travel.
4. How did you set a budget and priorities for furnishing and decorating your property? What was important to you and Paul during this process? And how have you budgeted to replace items if they’re damaged by a renter or from general wear and tear?
We set a budget and we did go over as we decided to spring for a few upgrades. Everything just adds up, so get ready for it mentally. It was important to us have fresh, new furniture and decor. I’ve seen rentals online where it looks like furniture just goes there to die. You won’t get a great rental return with mismatched cast-offs and we were aiming to be a more upscale property to differentiate ourselves from what is already out there. So we shopped at a lot of budget-friendly places with lots of style like Target, World Market, Ikea, Wayfair and West Elm. Our pieces turned out great, but didn’t cost so much that we would be disappointed if we had to replace them after a few years of wear and tear.
I really wanted to create a space that was a dream home that we would want to rent and we’ve had tons of guests compliment our furniture and decor. It’s 10x nicer than our rental apartment!
5. Aside from a fully booked calendar and word-of-mouth, part of owning a successful vacation rental are renters who return on a regular basis. What’s your advice about creating a space people will want to return to year after year?
People want to book a relaxing place that’s just as nice as their own home or even nicer! Make sure your property feels like home and don’t forget all the little details like spices in the cupboard, tea, kitchen gadgets etc. Resist the urge to add clutter – guests want blank space to place their own things down.
BONUS QUESTION ROUND BELOW!
Bonus Q #1: Why did you pick Airbnb as your rental portal? What made you decide to manage the property personally instead of hiring a 3rd-party management firm?
Management firms can take 30% or more plus a restocking fee for supplies. That really cuts into your profit. Definitely consider whether you have the time and energy to manage your own property during the busy summer months. I like airbnb because I can screen my guests and make sure they are well-reviewed before I decide to share my home with them.
Bonus Q #2: What would be your top three recommendations for someone looking to buy an investment property and turn it into a vacation rental?
Make sure you have a decent size budget to work with for furniture and decor. Find an amazing housekeeper that is reliable and that you like working with. Be prepared to spend a few months getting this project off the ground.
Thank you so much Lisa for sharing your story with us (and the amazing images above)!
Interested in seeing Lisa and Paul’s beach home? Please visit their page!
If you’re considering buying an investment property and have questions about the process, the type of loans available or financing, give us a call! We’d be happy to help you explore your options.