Monday, May 14, 2018

Long Term vs Nightly Rentals at the Lake of the Ozarks

At Your Lake Vacation, we frequently get asked whether it's better to rent a particular property as a Lake of the Ozarks vacation rental or as a long term rental. The answer to that question is usually, "it depends." Or "what do you mean by better?" Keep reading to learn more about the differences between nightly rentals and long term rentals.

Vacation Property at the Lake of the Ozarks 

The first question that I ask someone is, "Do  you want to use the property?" If you want to use the property at all for your own vacation, then you've already answered your question, unless you can find a long term renter who will let you hang out with them for a week or so every year!

If you are not going to use the property at all, then the next question becomes, "Do you want to manage it yourself or have someone else manage the property? It is easier to manage a long term rental yourself than to manage a vacation rental. After you have answered that question, then it becomes the simple question of economics. In other words, how can you get the best return on your investment?

Long Term vs Nightly Rentals 

Let's look at a three bedroom condo in Osage Beach for an example. A quick look at the long term rental market for a three bedroom condo in Osage Beach is showing an average rental price of around $1,000 per month. That would be a gross income of $12,000 per year. Last year, our best renting three bedroom condos in Osage Beach averaged $18,500 in rental income. Therefore, if you were going to manage the property yourself,  you could potentially receive more income from vacation rentals even after paying the electric bill (which long term tenants usually pay, but vacationing guests do not). Otherwise, you would have approximately the same expenses for the property regardless of how you  rented it.

Hiring a Property Manager 

If you hire a property manager at the Lake of the Ozarks, you would pay around 15% for long term management and based on the above numbers, that would leave you a net income of $10,200. For vacation rentals at the Lake of the Ozarks, you would pay around 35%, which would leave you a net income of $9,625 after paying the manager and the electric (based on $200 per month for electric). So essentially, it would be break even at that point, except with the vacation rental, you could still use the property for personal vacations vs not being able to use it if it was rented as a long term rental. You then just need to decide if it's worth less than $600 per year to not be able to use your property?

Most of our owners want to use their home or condo as their own vacation rental property and then rent it to help off-set their costs. The majority of vacation rental properties do not make a profit but their income does allow them to have a second home or condo and take care of the majority of their expenses.

For more information on turning your second home at the Lake into a vacation rental, give us a call at 573-365-3367. Your Lake Vacation has been serving guests and helping owners with professional vacation rental management services at the Lake of the Ozarks since 1986, and we would love to help you too!

Nightly Vacation Rentals at the Lake of the Ozarks: 

We make it simple. Paperless. Keyless. Stress-less. 

4571 Osage Beach Pkwy, Suite A
Osage Beach, MO 65065
Local - 573-365-3367
Fax - 573-365-5076  

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