Hi
I am looking to buy a short term single family house in Destin Florida. I live about 1100 miles away so won’t be managing it myself . Need some advice if it’s a good move to invest in short term rental and after paying mortgage and all other expenses can I make any money ?
Rental Property Investor · Denver, CO · Member since 2017 · 179 posts · 208 votes
8y
I don't own a home in Destin but have done a good bit of research and the general consensus seems to be what @Marc Middleton said.
Ironically, Panama City (just down the road from Destin) was ranked the "#1 city to buy a vacation rental" and Destin was ranked #2 in 2017. Rented.com is a fairly reputable source but their data has to be off or has huge holes.
At any rate, thought this group might find this interesting:
Hi
I am looking to buy a short term single family house in Destin Florida. I live about 1100 miles away so won’t be managing it myself . Need some advice if it’s a good move to invest in short term rental and after paying mortgage and all other expenses can I make any money ?
Hard to say, but usually out of the area Short Term owners don't make a lot unless you bought during the crash of 2010-2011. Now, you are paying market price and trying to get above market rent for the short term aspect. It will be pretty empty in the Winter Months, then you have the AirBnB/Homeaway fees for every time you rent, you'll need to pay a cleaning person each time (charge the tenant but sometimes its worse than expected when they vacate), AirBNB deducts taxes now from the rent (or at least reports your earnings so you have to pay taxes on them), then you have to pay for all the utilities every month, even when its vacant. (Add another $200 to your payment & taxes in the slow months).
If you're looking to just break even and want a place to use later in life or retire to, then it can be a good idea. But for straight investing and then sell later, there are better opportunities all over Florida. (I have success currently in West Florida, Central Florida and even condos in Miami right now).
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
8y
Imran Maqbool I’ll be overly general but I’ve never found it to pencil out in Destin. It barely pencils out (some of the time) in Gulf Shores. Property management isn’t cheap for vacation rentals, insurance is pricey near the ocean, Florida property taxes aren’t low, and expenses (when you pay ALL of them) are never low with vacation rents. And then you you’ll make most of your gross rents in 4-5 months and you bleed for the other 7-8 months. Which isn’t necessarily “bad” but you’d better know that going in :)
The real challenge is paying ~25% of gross rents for property management in a vacation rental scenario. You might get 20% but don’t budget 10% 😬
Oh yeah, and the last 12 months (in a great economy) are going to look a lot difference if there’s any kind of “hiccup”.
I plan on moving to Florida in next 12-18 months . So if you have any other investments that are cash flow positive plz let me know . We plan on living close to Orlando.
Hi Imran, I'm in Cali and I invest in Short term rentals in Florida AND manage them. They are extremely profitable if you do it right. We are even looking at buying a 2nd rental out there. Let me know if I can help at all!
Investor · Tampa, FL · Member since 2017 · 205 posts · 92 votes
8y
Travis Rasmussen sounds like I'm following your footsteps! I'm from California but looking to move to/invest in Florida. How is the rental doing? And what's your justification for buying another in this high market?
Rental Property Investor · Denver, CO · Member since 2017 · 179 posts · 208 votes
8y
I don't own a home in Destin but have done a good bit of research and the general consensus seems to be what @Marc Middleton said.
Ironically, Panama City (just down the road from Destin) was ranked the "#1 city to buy a vacation rental" and Destin was ranked #2 in 2017. Rented.com is a fairly reputable source but their data has to be off or has huge holes.
At any rate, thought this group might find this interesting:
Residential Real Estate Broker · Miami, FL · Member since 2014 · 214 posts · 106 votes
8y
The problem with PCB is that the residents are fed up with all of the spring breakers and are actively trying to close weekly and daily rental options. So that would mean only monthly rentals which most cities in Florida still allow.
Plus their downtime is really really slow compared to other parts of Florida.
What part of Cali? Man, if it wasn't for family, I would move out there as well.
It's doing great (knock on wood); we originally tested it out in our house, did well, bought our first one, that is doing well, and that what got us to move on the second.
I would say the biggest thing is, be wise with your purchase. We really thoroughly combed the market to decide where we wanted to buy. On top of that, we really make our's a 5-Star experience. We provide coffees, we make sure the guest doesn't need to meet up to get a key, etc. When your new, you have to be lower with your prices but the more reviews/exposure you have, the more you can steadily raise your price and be a great/fantastic stay for guests coming to your area.
Real Estate Agent · Emerald Coast, FL · Member since 2016 · 820 posts · 486 votes
8y
I live in Panama City and own 3 Airbnb rentals "in town" - not on the beach. I can definitively say that the cities (PC and PCB) are NOT trying to close weekly and daily rental options. I have no idea where that idea is coming from. We are a VERY rental-friendly place. Our economy RUNS on tourists. Also, we have a (small) international airport with at least 4 major airlines AND our "downtime" is filled with snowbirds who rent by the month. 2 of my 3 rentals are fully booked through April of next year. Downtime? I don't think so. The only "fed up with spring breakers" action PCB has taken is to ban alcohol on the white sandy beaches for the month of March only.
I'm a REALTOR in PC (and the 2017 Rookie of the Year for my board), and I'd be happy to give more info on average prices, time on market, etc. for anyone who is seriously looking in this area.
Real Estate Agent · Emerald Coast, FL · Member since 2016 · 820 posts · 486 votes
8y
PCB is the #1 place to buy vacation rental property according to this. You certainly cannot get a condo on the beach in Destin for under $200K, but here, you still can. Research without actual experience will only take you so far. ; )