Best Cabin to buy in Big Bear?

This question is asked every day of the year by potential Big Bear Cabin Owners.   For the sake of this article we are going to assume that this question is “What is the best Big Bear Cabin to buy to return the most money per year?”   To go further we are going to extend this question to What type of Big Bear Cabin will NET the most money per year? 

big bear lake haven

A workhorse cabin that rents 4 seasons

These are two different questions.   Some homes generate a great deal of revenue but also generate a great deal of expenses as well.   The first thing a buyer must get out of their heads is “A Big Bear Luxury Cabin will generate more profits during the year than an average Big Bear Rental”

Starting Point:

Where is the Big Bear Cabin and what is the cost per square foot?   Did you know the city only allows 1 person above the age of 5 for every 200 square foot in a home?  That means if your home is 2000 square feet it can legally only be rented to 10 people.   That means a 3 bedroom home that has a loft/game room can be rented to a 3 families that have only 4 kids above 5 total.

This is very important because if the home only sleeps 8 and another home sleeps 10,  the home that sleeps 10 can expect to do 25% more revenue if they are in the same location and have the same amenities.   Remember functionality over form,   Renters will choose the home that provides better sleeping arrangements over a home that might be a little nicer.  If the sleeping arrangements are the same then the home that is nicer or has more amenities will get the booking.

This is valuable information and should really be used when considering all Big Bear Cabin purchases if you intend to put the home on a Big Bear Cabin Rental program.    Destination Big Bear likes to use the phrase “Work Horse” when looking at Big Bear Rentals.    Our perfect workhorse is a 4 bedroom, 3+ bathroom, game room, hot tub, internet, great views, 2800 – 3200 square foot home with a southern exposure.   See the cabin,  Big Bear Lake Haven as example,  look at how the bedrooms are set up.   Try to visualize 3 or 4 families renting out this home, splitting the cost and each family getting their own bedroom.

More Detail

Big Bear Lake has a max occupancy of 16 in a home and you can only put 1 person over the age of 5 in a home for every 200 square feet.   So 3200 square feet is perfect, any space above 3200 square feet and you are paying additional costs to purchase the home, to pay the taxes and to heat it in the winter.   For the most part and home larger than 3200 square foot and you pass the point of diminishing returns.     Yes you can buy a 3600 square foot Big Bear Luxury Home , Grand Mountain Retreat for instance, that will generate a gross of $80,000 a year where as an average 3200 square foot home might only generate $60,000.

A luxury big bear cabin, 3600 square foot home.

A luxury big bear cabin, 3600 square foot home.

What is better $60,000 gross on a home that costs you $450,000 or $80,000 on a home that costs you $700,000.  In most cases the net numbers will be even better for the smaller “Workhorse Cabin”.    In addition,  it is much less expensive to furnish a 3 star property than a 4 or 5 star property.    Remember we are only speaking about ROI we are not talking about Pride of Ownership.

 

 

Leave a Reply