Where Adventure Meets Restoration
INVESTMENT
If this is your first time investing in a short term rental property, the thought can be a little daunting. Rest assured that our list of referrals will help put you in touch with experts to make the process easier. Plus you will find comradery, support, and idea exchanging with fellow owners through our private Facebook group.
The ABC’s of Short Term Rentals
FINANCE
Most people don’t have the cash to buy the lot and build the cabin or they may not want to allocate those personal assets in their short-term rental portfolio. Contact us to learn more about how to finance a short-term rental cabin and for a list of referrals to our lenders.
DESIGN
There are several ways to design your cabin. Utilize a professional home designer, use an online design, or work with the builder you hire to help you. Some of our favorite online design websites are Den Outdoors, House Plans, and Truoba.
CONSTRUCT
& FURNISH
You can work with your own builder or contact a local builder from the list we provide. Remember to consult and follow the HOA architectural regulations. Your property manager and even some of the design websites may offer tips for furnishing your cabin.
MANAGE
Work with a property manager to market, book, clean, and maintain it. We have a recommended manager for the development, but you are welcome to use someone else or even do it yourself, if you have the time and ability.
MARKET
Your property manager may be able to market your property as part of their service. However, Sky Ridge Retreats, will also market your cabin with their “Rent a Cabin” page on this website. It will be active once cabins are ready to rent!
Investment Protection
Sky Ridge’s HOA documents safeguard investments while giving the freedom and flexibility to design and create a one-of-a-kind modern cabin. To see a draft of the rules and regulations for the community, click HERE.
Return on Your Investment
Maintaining and growing investments depends on a number of factors such as the location of the lot, amenities of the cabin, market conditions, and expenses. Results may differ greatly. Below is an example cash flow and return on investment (ROI) calculation.*
Let's Make the Following Assumptions
Buy land for $37,000 - take advantage of our discount
offer by signing a property management contract!
1
Acquire a cash-out refinancing
20-year loan at 7.5% interest
for approximately $300K to cover building, furnishing,
and closing costs.
2
Hire a property manager and rent cabins at $300 per night,
22 times per month.
3
Annual expenses for the
short-term rental are $15K.
4
-
Annual cash flow is approximately $25,460
-
Annual cash-on-cash return is 69%
-
Over a 10-year period, the net income is approximately $354K
-
Over a 10-year period, the ROI is approximately 858%
Assumptions
-
Lot cost & total cash investment: $40,000 - $3,000 (discounted for property management contract)= $37,000
-
Loan needed:
-
$250,000 for building costs
-
$15,000 for furnishing
-
$7,500 for closing costs
-
-
Annual revenue $79,200
-
$300/night x 22 nights/month * 12 month/year = $79,200
-
-
Annual mortgage payment (20-year mortgage at 7.5% interest): $2,195 x 12 = $26,340
-
Annual expenses $27,400
-
$750/mo*12 = $9000/year for property management
-
$2400/year for cleaning fees
-
$2400/year for HOA dues
-
$3600/year for utilities and internet
-
$3600/year for insurance
-
$2400/year for maintenance
-
$2400/year for property taxes
-
$1600/year for listing fees
-
-
Annual appreciation rate: 3% of $290,000 = ($40,000 lot + $250,000 cabin)
Calculations
Annual Cash Flow = Annual Revenue - Mortgage Payment - Annual Expenses
$79,200 - $26,340 - $27,400 = $25,460
Cash on Cash Return Formula = Annual Cash Flow / Total Initial Costs
$25,460 / $37,000 = 68.9%
Total Net Income Over 10 Years = Total Cash Flow Over 10 Years + appreciation
(10 x $25,460) + {$290,000 x (1 + .03)^10 - $290,000}= $354,336
Total ROI Over 10 Years = (Net Income) - Total Initial Costs / Total Initial Costs x 100
($354,336 - $37,000) / $37,000} x 100 = 858%
*The above scenario is an example only to show what may happen with your financial investment. Seller does not warrant any cash flows or return on investment as these will vary greatly depending on a number of factors.