Vacation Rental Report – September 2022

By | October 7, 2022
vacation

Another month is in the bag. Summer is over and the busy season is winding own. I can definitely see a difference both in terms of the number of bookings, as well as the value of those bookings. I would be happy if I am able to break even for the remaining months of the year. As this is my first year, I really don’t know what to expect come November and December. It’s going to be touch-and-go I think. In other words, it’s going to be tough to get to a break-even point for those months, but there is still time to get some bookings. That is then, and this is now. So, let’s take a look at how the beach condo earned in income for the month of September.

Vacation Rental Profit/Loss

Let’s see how much profit/loss I made for the month.

A. Vacation Rental Income

During the month of September, I earned $5,577 in vacation rental income broken down as follows:

As you can see, this income was more than August, but very much in line with the income I earned in April of this year. I suspect that once the remaining months are filled in, I will have a complete picture of what to expect over the course of a year. While past performance is no guarantee of future success, it will be a useful guide going forward for my planning purposes.

B. Vacation Rental Expenses

During the month of September, I incurred $4082 in expenses as shown below:

Whew! My income in September exceeded my experiences – but barely. I will take it!!! I was happy to break even. So, I am ecstatic than I can report a small profit for the the month.

My expenses were slightly elevated in September because I had to replace several light-bulbs that cost me $50 (with the service charge by handyman). I also decided to refund a guest a day’s income because the elevators were not working for much of the day. My guest was disabled and the condo is on a high floor. So, although the refund amount was a bit generous, it’s the way I run my business. I imagine I’ll be less generous next year. Thankfully, I received a 5-star review, which is far more important to my success at this early stage than the dollar amount of the refund.

C. Profit/Loss Statement

So, as mentioned, and as you can see, I incurred a profit of $1,496 for the month. This is much better than the LOSS incurred in August when I reported a $443 loss.

The overall profit for the year, at the time of this writing, is $16,274! It’s very important that this number be at least $15,000.

As you may recall, I have started two new projects recently. One of those projects is my $50000 Savings Goal. During this goal challenge, I aim to save $20,000 from my salary and $30,000 from my vacation rental by December 2023. I figured that if I can make $15,000 in profit in one year in 2022, I can do it again in 2023 to give me the $30,000 I need to meet this challenge.

However, winter is coming! The condo is seasonal and makes most of the money during the summer time. Usually, during the off-season, other condo owners rent the condo to snowbirds. In fact, I inherited snowbirds when I bought the condo, and that’s how I was able to make the $1800 per month in January and February as shown in the income chart above.

Well, I’ve decided to not rent to snowbirds this time around and only time will tell if that was a good financial decision or not. If the condo can make enough money to break even from October – February, I should be good. If not, I’ll re-focus my efforts on minimizing my expenses for 2023 and consider renting to snowbirds again in 2024.

Annual Income and Expenses

As this is my first year investing in a vacation rental, I don’t have any annual income to compare it to. However, for purposes of this section, here is a graphical representation of the revenues earned in September 2022 in relation to the revenues earned in previous years:

Here is a graphical representation of the expenses incurred in September 2022 in relation to the expenses incurred in previous years:

As you can see, the charts are exactly the same (except in style) as indicated above. This annual comparison section will make a lot more sense come 2023 when I am able to make a comparison. I will be able to see a trend not just from month-to-month, but also from year-to-year.

Finally, I am mindful that as we are possibly heading to a recession, the vacation rental market might be one of the first industries to be negatively affected. So, I am under no illusions that I may not be able to rely on these revenues forever. In fact, there is no guarantee that I will be able to post higher numbers next year. But thankfully, I am still in a position to be able to afford the expenses on my own, if push comes to shove. It will be tough and I may have to live on beans and rice, but it is one of the reason why I chose this particular unit as the first one to purchase.

Final Thoughts

The vacation rental market is definitely slowing down – at least for me. Soon, the temperature will start to cool and less people tend to go to the beach during winter than they do during other times of the year.

I am hoping to at least break-even over the course of the next 5 months. This is in large part because I want to save as much money as I can to buy another condo (one that is bigger and more expensive). But, I’m really trying not to put the cart before the horse.

In looking ahead, October will at least break even, but so far, November and December might very well incur losses for those months. We shall see.

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