Vacation Rental Report – February 2023

By | March 8, 2023
Vacation Rental Report

The time has come for me to do my vacation rental report for February. Nothing exciting happened in February. I do have snowbirds that rented the unit for the entire month. I also didn’t have any unusual expenses in February. It’s the slow season. So I do anticipate operating these slow months at a small loss. My snowbirds like the unit and may return next year, depending on where their friend can find accommodations. They want to be close. More on this later, but for now, lets see how much income the vacation rental made in February 2023.

Vacation Rental Profit/Loss

As indicated earlier, my snowbirds rented the unit for the entire month. So, let’s see how much revenue I generated in February.

A. Vacation Rental Income

During the month of February, I earned $2223 in income broken down as follows:

Not bad. Generally, my rent for the month is $2200. This is a marginal improvement from the previous amount I was charging my other snowbirds. My plan is to keep the rent the same next year, but we will see.

B. Vacation Rental Expenses

During the month of February, I incurred $2948 in expenses, broken down below:

The expenses this month were not as crazy as they were in January. These are typical expenses (minus the HOA fee – since that’s paid quarterly). So, even though the property operated at a loss in February, it was less than $1000 overall. I’ll take it.

C. Profit/Loss Statement

Based on the higher expenses in February than the income earned, overall, I experienced a LOSS of $725 for the month. It could have been worse.

Unfortunately, I had to come out of pocket to help cover the expenses in January and February of this year. Moreover, since I am in the process of closing on another beach condo, I am really strapped for cash. I could hardly pay my regular mortgage payment at the beginning of March.

I anticipate that I will be low on cash until the busy season picks up. Like many other Airbnb or short term rental hosts, I’ve experienced a slow down in booking. Some call it the Airbnb Bust or the AirbnBust in 2023. I would be lying if I said I wasn’t worried – especially since the new condo I am buying is VERY expensive. So, I am taking things one month at a time.

The next several months are going to be tough, but, it is what it is.

Annual Income and Expenses

2022 was my first year when my condo was live on the market, so let’s see how February 2023 stacks up against February 2022.

A. Annual Income

Here is the raw data:

As you can see from the above, I incurred a 24.06% INCREASE in the revenue earned in February 2023 as compared to February 2022. I anticipate my February 2024 income to be relatively the same, but we will see what happens.

B. Annual Expenses

Here is the raw data:

As you can see, I incurred a 6.08% INCREASE in my annual expenses, which is not a good thing. But, thankfully, the increase was only a small amount, in terms of percentages.

As I’ve mentioned in other posts, I am currently house rich and cash poor. That will likely be the case for the next several months. Hopefully, I will have enough funds to weather the storm.

Final Thoughts

I had a pretty normal month for a change. Granted, it resulted in a loss of $725, but all-in-all, I didn’t have any huge spike in income or, more importantly, any huge spike in expenses.

March and April are going to be VERY expensive months. For example, in April, my quarterly HOA will become due. Additionally, I just locked in my interest rate on the new condo at 9.875% after paying points to lower the interest rate. Yea, that’s high, but it’s an investment loan. Maybe I will delve into the finance of my new condo in another post, but sufficed to say, it’s VERY expensive.

That being said, I am hoping to refinance the new condo after 6 months (or at least within the next year or two), and hopefully that will help relieve some of the financial stress of having a super high mortgage payment.

So, I am trying to prepare for the financial storm that is to come this year. With bookings slowing down, and guests having numerous options to choose from because of an oversupply of Airbnb and short term rental hosts, I’ll be happy if I can break even between the two properties. I’ll hope for the best but plan for the worst.

To make thins worst, there is the potential that I will have to pay a special assessment after I close. Yikes!

Finally, once I close on the new condo, I will have to decide if the Vacation Rental Report that I do every month will include one post for both properties, or one post for each property. Time will tell.

What did you think of this post? Let me know your thoughts by commenting below.

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