Lake of the Ozarks Vacation Rentals: Investing in Vacation Property at Lake of the Ozarks

So far in 2016, we've gotten a ton of calls from investors looking at vacation rental properties at the Lake of the Ozarks. In light of all the people currently looking at investment property, Your Lake Vacation has decided to revise an earlier blog on investing in a vacation rental home. Before you make your home purchase, talk to a professional at our property management company to make sure you know what you're in for!

Investment Perspective

By investing in a vacation rental property, the owner can do two things: off-set some of the property expenses like the mortgage, taxes, insurance, etc. and also use the Lake of the Ozarks home or condo as a vacation property for their own family and friends. When it comes to owning a vacation rental property, having the proper perspective will make all the difference in your experience. Very few properties will completely pay for themselves through the rental income. So if you can't afford any added expenses to what you already have, you're probably better off not buying. However, if you are just looking to off-set some of your expenses (and I would say in most cases at least half of your total expenses would normally be covered by your rental income), then you will have a positive experience.

Return on Investment

When it comes to investments, most people are interested in the return they'll be getting from it. Let's look at the basics when it comes to getting a return at the Lake of the Ozarks. Keep in mind that our vacation rental season, compared to coastal locations, is relatively short. At the Lake, we're looking at around 90 days for the season and depending on the type of property, you might only get weekend rentals for the most part. There are only 15 weekends between Memorial Day and Labor Day. However, if you have a nice property in a great location, you'll get a few rentals outside of the prime season too. Just keep in mind that 80% of your rentals will fall within that 90 day period.

Running the Numbers

For an example, let's look at a 2-bedroom condo at the Lake of the Ozarks. The average selling price right now for a 2-bedroom waterfront condo in the Osage Beach area is still right around $123,000. Based on a 30 year mortgage at 4.5% interest and a 20% downpayment, your monthly payments would come out around $490. A typical, nice 2-bedroom condo rents for around $175 per night in the summer. You can expect around 40 summer nights and around 10 off-season nights (in the $140 per night range). That gives you around $8,400 for the season. Your average cost is going be somewhere around $11,000 for the year. That total includes your mortgage, insurance, taxes, quarterly assessments and electricity. Also, over time, you will need to set aside some of your earnings to update your property, repaint, replace worn items, etc. Depending on what Lake of the Ozarks property management company you go through, you're going to give 35-40% of your rental income to them. That leaves you with around $5,000 to $5,500 in net income from rentals. Even if you manage the property yourself, you will, in most cases, come up a bit short.

If you are looking to cover some of your expenses, like your electric, insurance and taxes, then you are probably going to find the experience a lot more satisfying than if you need your rental income to cover your mortgage and assessments. Thinking about investing in vacation property at the Lake? Give Your Lake Vacation a call at 573-365-3367 before you buy. We'll discuss your options, estimate your annual income based on similar properties on our program, and find a solution that works best for you!

For more information please call us toll free at 1-877-284-0267!!