RE as an investment, wedding venue, AirBNB, etc...

[masraum]

Has anyone ever had any experience with renting property as a wedding venue? What about other short term rental?

We have been talking about purchasing some property. I don't necessarily want to be a landlord. The missus has thought we could get something nice outside of town and rent it as a wedding venue or event venue. Our son and his girlfriend have extensive Hotel and restaurant management experience and would like to assist with this, hopefully, eventually with enough success that they could get paid. We're mainly looking to have the mortgage paid by the rental and hopefully eventually be able to pay the kids to do the management.

Does anyone have any thoughts or experience with this sort of thing?

[biosurfer1]

This sounds like a disaster in waiting.

"I don't necessarily want to be a landlord", that is a HUGE red flag to me.

You want to involve family members, that's another red flag. If you do go that route, the son's GF shouldn't be involved until there is a ring on her finger.

Most weddings are spring/summer...are outdoor weddings an option in Houston June-September?

I think there "can" be decent money if you have a great venue that checks most brides wish lists, and you dont care about big groups trashing your property weekly and you cleaning up after them.

[masraum]

Lots and lots of outdoor weddings in the area.

[Bigtoe32067]

There are some that do amazing and there are some that fold in a short time. It’s hard to be amazing. I think it takes a lot of knowledge and effort to make one that turns out amazing and if I wasn’t completely sure then I wouldn’t do it.
If your money is only made in a short wedding season every year and the weathers bad that year or one opens down the street, or whatever, you still have to pay your mortgage all 12 months out of the year.
Good luck to you whatever you decide
Tony

[look 171]

Steve, here's some food for thoughts. A friend had said this to me long ago when I bought my first rental. There are three basic things people need:

A roof over their head
Transportation to and from work
Food.

Pick one of the three and they will give you money for it.

W place just for weddings and other venues will be a bit difficult to have it rented year around. What will become of this place during the week? Its get hot there, what will it be then? Getting it off the ground will be the most difficult but once established, you might have something going there. I think it will be a hard one. Banks don't quit; they want their mortgages paid.

[944 S2]

Property management often requires a Brokers license. Well at least in Ohio. May want to check into that if your going to pay someone like your kids to do the management part.

[legion]

I'd start with uses other than weddings first. Not sure what that would be. Weddings are tough. You can have very demanding brides and family members. You can have people trying to screw you out of money. You can have people that do things to your property unannounced that damage it.

[Cajundaddy]

We recently sold our beach condo that we had rented with AirBnB for about 2 years. It did manage to pay for itself but was in a very prime area 1 block from the pier. A lot of landlords depending on rentals during covid took a big ol bath so there is significant risk.

If you do want to be a landlord or trust someone to manage the property and keep it occupied you can do well over time. If you don't want to deal with tenants, invest in the stock market and sleep better.

[MRM]

Start with a real financial evaluation of the potential business. You have to get a real evaluation of how much demand you're going to have or you're just banking on good luck to have the business succeed. And then you have to compare your expenses to that expected revenue. My guess is that when you put pencil to paper you'll be doing well to break even.

Calculate the maximum number of rentals and maximum revenue that could be realized if everything went perfectly. Then evaluate the realistic actual revenue. Count up all the fixed costs that the business/venue will incur. Calculate the variable costs to you for holding each event. Put them in a spreadsheet. Show them to people who are already in the business. Talk to your banker. Just don't go into a business blind because you have a sense it is a good idea and there might be a market for it. Know before you take the leap.

[Seahawk]

Originally Posted by MRM

Start with a real financial evaluation of the potential business. You have to get a real evaluation of how much demand you're going to have or you're just banking on good luck to have the business succeed. And then you have to compare your expenses to that expected revenue. My guess is that when you put pencil to paper you'll be doing well to break even.

Calculate the maximum number of rentals and maximum revenue that could be realized if everything went perfectly. Then evaluate the realistic actual revenue. Count up all the fixed costs that the business/venue will incur. Calculate the variable costs to you for holding each event. Put them in a spreadsheet. Show them to people who are already in the business. Talk to your banker. Just don't go into a business blind because you have a sense it is a good idea and there might be a market for it. Know before you take the leap.

How much is a Gillion in agreement?

Local zoning, county zoning; local, county and state regulations governing this type of business to start.

My wife and I like the farm we live on, have tried to come up with a reasonable plan to keep it.

We have looked at horse AbnB (fairly big business for hauling horses on the East Coast), wedding venue, vineyard, etc. We have done the math, including licensing, insurance, codes, employee issues, and, most importantly, dealing with the public.

We own the place free and clear, basically looking at what could make ME want to stay.

The wedding, event gig is, according to a friend of mine who does it in PA, a catheter a week, no lube.

Enjoy.

[look 171]

In this crowded city with millions bursting at the seams, all the wedding places are booked to the max. At least that way the way it was when I got married. Those who know LA, Descanso Gardens or such are booked way in advanced, mandatory food catering and its only for limited hours. There are lot of other places that will happy to take you money. Jam packed, crowded city is how these folks run a successful business. If you have that in TX, assuming that's where this ranch is located, that maybe make it successful. Get together with those wedding planners. Get ready to give some kick back in the beginning.

[Ayles]

A wedding venue might be adversely affected for many years by some of the other factors happening to the age group that generates the bulk majority of weddings...

[rusnak]

A wedding/ conference/ event venue is not a passive real estate investment. It is an all-in, totally consuming business to run. An absentee owner would fail. A new venue will take years to establish because of the lead time for planning weddings and events. You'd have to find a way to reach your customers years in advance of the event.

Consider renting vacation homes as a starter business. Or an apartment complex. Something that you can hire out a property manager. Maybe a single tenant retail property like a fast food restaurant or bank. And probably a huge mistake to hire family.

[masraum]

Thanks for the opinions and insight folks.

[stealthn]

It’ll work 50% of the time

[jhynesrockmtn]

My step daughter owns a well established restaurant and she does a lot of wedding rehearsal dinners and big groups. The stories that come from the crazy *hole bridezillas and mothers that set up these events would be enough for me to never want to be in any business related to weddings or other family events. The stories from retirement, anniversary, birthday parties etc. are similar.

If you've never owned investment property before continue to do the research you are doing. I just spent 4 years managing a 6 unit apartment building I own while working full time. The place is now to the point where I've hired a professional property manager as I transition to part time work. It sounds counter intuitive to hire a professional when I'm working less but with the landlord tenant laws rapidly changing and me tired of the text messages at 10pm about the smoke alarm beeping or toilet clogged it was either sell or step away from the day to day. Luckily the cash flow is good enough to do the latter.

[bivenator]

On the outskirts of west Houston there is a group of venue's that do this sort of thing. Agave something or other. I have chatted with the owner on occasion. He seems to be doing well before the 19. Google it and take a look at his operation to understand what the competition looks like.

[911 Rod]

I'd rather stick a pencil in my eye.
Seriously so much bull**** from people that feel they are entitled.

[crb07]

Out of town as in a decent size property where your neighbors are far enough away that they don’t hate you?