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A beachfront property, a house close to the bustling city life, a rustic cabin that serves as a perfect escape—we all love being able to get away and enjoy a vacation. Everyone needs time to relax, unwind, and explore, but imagine if you could be the one to meet everyone’s needs. What if you were the one providing a place of respite for travelers, near and far? What kind of financial growth could you experience? How would your portfolio benefit from this additional asset?
With First Western Federal Savings Bank, you can get a non-recourse loan to purchase a property to turn into a vacation rental. With the rise in vacation rental websites such as VRBO and Airbnb, the market is showing to be at an optimal time for you to get a vacation rental property. When used in tandem with your self-directed IRA, you can work with our non-recourse loan lenders to get the non-recourse mortgage you need to invest in a vacation-styled abode.
 At First Western Federal Savings Bank, we pride ourselves on being one of the nation’s top choices for non-recourse loan lenders. We would be honored to get started with you in the journey of building your financial portfolio. Contact our team of non-recourse loan lenders to get started

A vacation rental is a property, such as a house or apartment, that is fully furnished and designed for people to rent while on vacation. Rentals nearly always are expected to provide a living space, complete with furniture and certain appliances, that guests can pay a daily fee to live in while vacationing.

Many people choose vacation rentals over hotels for a variety of reasons:

With a vacation rental, you often have your own kitchen, living room, and other amenities that feel more comfortable than a sterile hotel room.

You can do as the Romans do with a vacation rental—homes are often in neighborhoods or away from tourist areas, making your stay feel more authentic to the area.

Hotels are a place where guests from all over conglomerate, and can sometimes feel a bit congested. While vacation rental might not have a pool, they also won’t have tons of kids running around and jumping in, either.

Vacation rentals are known for offering more bang for their buck. Prices are usually comparable at the very least to hotels, and oftentimes even more affordable.


The Rise in Vacation Rentals

For decades, hotels were the destination spot of choice. The location itself didn’t make much difference—when you booked a trip, wherever you booked a trip, you booked a hotel right alongside it.

This, however, is a trend that’s about to change. 

Increase in Vacation Rental Properties

When Airbnb launched in 2008 (under its original namesake, its two founders could hardly predict the rapid growth of its success (1). Yet in less than 10 years, Airbnb grew to become a $30 billion dollar industry. Although VRBO has a more modest revenue that’s estimated to be upwards of $10 million annually, this still speaks to the growing popularity in the rise of vacation rentals (2). 

Yet this is not a trend that’s limited to simply rising. In fact, many researchers predict that by 2020, vacation rentals will take over the hotel market, far surpassing hotels in revenue and popularity (3). 2020, vacation rentals will take over     
      the hotel market    

Increase in Vacations

Even if more people are projected to stay in vacation rentals than hotels in the coming years, this is not the only thing that requires consideration. Because if less people are vacationing overall, it’s a bit more of a competitive market to get involved in—yet fortunately, this is not the case.

Studies show that in recent years, people are traveling more—and more frequently at that (4). A third of families take at least one or two trips per year, and in 2016, 22 percent of families traveled three or more times per year. By 2017, this number jumped to 35 percent, which is a huge jump demonstrating the increase of travel that’s happening around the country. In addition to this, the percentage of people taking road trips is also predicted to increase, as is the number of people predicted to take guided trips.

In short, not only are vacation rentals on the rise, but the number of people taking vacations is also growing. People in the United States are recognizing more and more of the incredible benefits of traveling, and everything is on the rise. With all this in mind, it goes to show that getting a non-recourse loan from First Western Federal Savings Bank is a financial opportunity of a lifetime.

Benefits of Owning a Vacation Rental

The trends are showing that investing in a vacation rental property with the help of a non-recourse loan is a solid financial decision. Yet there’s no mistaking the fact that owning a vacation rental is a lot of work. In order to reap the benefits, you need to have an excellent, well-kept, clean and organized property with an incredible local feature that makes staying at your specific property all the more enticing. When all these things come together, there are some incredible benefits that can be enjoyed—take a look!

Added Income

With a property to rent, you’ll have the opportunity to make additional revenue. This can not only help towards paying for your non-recourse mortgage, but it can help supplement your general income as well. If you were to charge $80/night (after taxes) at your rental property, and even had five visitors stay in a month, this would mean an additional $400/month, or $4,800 per year. With a high, in-demand property that required you to charge $200/night, even just having five visitors a month would result in adding $12,000 to your annual income. 

Financial Opportunity

Investing in property is a great method to show lenders how financially responsible you are, which can help you with future financial endeavors. Paying off a non-recourse loan in a timely manner helps build your credit score, which presents you with further opportunities. With a higher credit score, this makes getting future loans more attainable, and at better interest rates. Buying a car or getting a new house will all be easier to obtain when you continue investing in your financial portfolio.

Future Security

Having a property that you hold onto for several years—or even decades—can generate an excellent ROI in the future. Buying a house is a huge financial investment, but with a vacation rental, you won’t have to worry as much about moving from its location. If a job takes you elsewhere, you can still manage your vacation rental from afar—and create revenue solely from having this existing property as well


How does it work?

Applying for a non-recourse loan with First Western Federal Savings Bank has never been easier. By using your self-directed IRA, you can apply with our non-recourse loan lenders to get a mortgage to help purchase a property to turn into a vacation rental. Here are a couple things to remember:

Have the right kind of property in mind.

The house you’re looking to purchase must be in the United States (Alaska and Hawaii included), and needs to have a property value of at least $70k. The property could be a house, a townhome, and certain condominiums—most importantly, the property needs to have its own roof to qualify. Additionally, this loan cannot be used for building or construction purposes—this is solely for acquiring the property. The property also cannot be built before 1940, and it can’t be your primary property of residence.

Have enough money in your self-directed IRA.

In order to qualify with our non-recourse loan lenders at First Western Federal Savings Bank, you need to be able to put down 40 percent of the property value down plus reserves. Since the home value needs to be at least $70k, this means the minimum amount to have in your self-directed IRA is $28k.

Understand the workings of a non-recourse loan.

When applying for a mortgage or loan of any sort, it’s important to understand what this means for you and your finances. In the case of a recourse loan, you’ll have to put up collateral to serve as a form of trust between you and the lender. In the event you can’t pay off your loan, your collateral will be seized, and any remaining debt will still be owed. 
With a non-recourse loan, you’ll put up collateral, just like before. However, if you end up defaulting (are unable to pay your loan) and your collateral ends up being seized, you will not owe any additional payments after this point. This makes a non-recourse loan a safer option for many to consider—the flexibility and compassion involved are exactly why we make this loan (and helping you get one) our specialty.


As the nation’s choice for non-recourse mortgages for nearly 40 years, people have relied on us for getting a non-recourse loan for a reason. See why we’re the FDIC bank to go through when it comes to getting your non-recourse loan for a vacation rental property!

Working with a federally insured bank minimizes risks that can from other loan lenders. In the event of a national banking crisis, you can trust that your non-recourse loan will be in safe hands. Additionally, being an FDIC bank means we have credit standards of the highest quality to uphold, meaning that your interests and needs are always kept as top priority.

Our non-recourse loan lenders work in all 50 states, meaning that any place has the potential to turn into a vacation rental property. We also lend for cash-out refinancing of non-owner occupied properties with LTV/LTC up to 70 percent. We offer fully-amortizing loans over either 20- or 25-year terms. In addition to our adjustable rate loans, which are fully indexed and fully amortized, we have an industry leading fixed rate loan. In everything we do, we strive to make sure you’re being helped—we’ll do everything we can to help you boost your financial portfolio. Not to mention, we offer loans of $40k to $1M to help you get the loan amount that works best for your fiscal interests. Our non-recourse loans are available with no pre-payment penalties, which just serves as another reason that you can trust you’re working with a bank who’s dedicated to you. Working with First Western Federal Savings Bank means transparency, honesty, and true compassion for our clients.

When you apply for a non-recourse loan with First Western Federal Savings Bank, you can expect to hear back quickly. We pride ourselves on having a fast turnaround time, meaning you can get answers and get the ball rolling faster. Much of this is because we're Leaders in the Non-recourse loan world.

Many—if not most—banks have difficulty understanding cash flows. Our non-recourse loan lenders have been doing this for over 30 years, meaning we have the experience and expertise needed to produce loans that make sense. Working with us helps you strive for further financial opportunities in a way that other banks can’t provide, because they don’t have you, the customer, as the first and foremost priority. Our depth of knowledge in the realm of real estate investing is essential in supporting you, before, during, and after the loan process takes place.



For your future visitors, it means a time of relaxation and exploration, a way to disconnect while also encouraging curiosity. For you, it means an opportunity to make your financial goals become a reality. First Western Federal Savings Bank is staying ahead of the current in the world of vacation rentals, and is ready to guide you in the process to acquiring your own.
Getting invested in the real estate market with the intention of turning it into a vacation rental is a financial opportunity that presents significant benefits. You’ll be staying in line with current real estate investment and lifestyle trends, you’ll be building your financial portfolio, and when you work with First Western Federal Savings Bank, you’ll be receiving the expertise and guidance of a trusted loan lender with decades of experience. Begin with our FDIC bank for your loan application process today—our non-recourse loan lenders are looking forward to working with you in this exciting investment

Airbnb - Statistics & Facts
February 2018 Overview
By 2020, Vacation Rentals ..
Family Vacation This Year
Email: Roger St. PierreNMLS #768919
Email: Jeff FullertonNMLS #768918
Email: Nick ConwayNMLS #1606997

Disclaimer: First Western Federal Savings Bank is not affiliated with any of the listed custodians, administrators, or facilitators nor do we receive compensation to provide you with this information. We are also not responsible for the website content at third-party sites. First Western Federal Savings Bank and its employees are not accountants, nor are we investment advisors, and we are not qualified to provide advice on IRA rules, regulations or eligibility requirements. Please consult your tax and investment advisors.


Copyright 2017 First Western Federal Savings Bank - 402 Main Street, Rapid City, SD 57701 Local Phone: (605) 341-1203 - Fax: (605) 394-0084 - NMLS #631666

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