We are looking to buy some property out in Colorado that we could rent out most of the time but use on occasion. Some questions:
How would one find out how often a property was rented?
What is the rental rate?
How much do property managers charge?
I own 2 vacation rental properties in Montana which I manage myself (they are close to where I live).
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If you are buying rental property you should ask the seller to provide income data for that property. They can choose not to provide it of course.
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If it’s currently being rented you can check on VRBO/HomeAway, Airbnb, Flipkey or some other booking sites to see if it’s listed. If it is there should be pricing available, or again you can ask the seller to tell you what it’s renting for, depending on the season.
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It depends. Some charge as little as 3-4% others as much as 10-15%, Depends on what you expect them to do for you. Do they arrange the cleaning service or do you? Do they let guests in to the unit or is there a lockbox?
Also, when you say you want to use it on occasion make sure to check the IRS regs about how much personal use you are allowed before you can no longer consider it a business. I think it’s 14 days a year, but you need to check on that.
I should have also mentioned that there is one property management company in our town that charges 25% for a turnkey operation. They will take care of everything. They will handle the bookings, the money collection, the cleaning, dealing with the guests, everything. As the owner, all you have to do is sit back and count the money coming in… minus the 25% fee of course.
I glanced through IRS pub 527 {PDF} and the distinction is if you rent it for 14 days or less, then you can’t deduct any business expenses (although you can still have some deductions for personal expenses).