Bronx, NY · Member since 2014 · 42 posts · 11 votes
Hello BP!
Over Christmas break, my father proposed an interesting deal to me. He has developed a relationship with the owner (who lives in NY) of a 3/2 condo in Tampa, Florida. Long story short, he said he would be willing to put down the down payment if I took out the mortgage in my name.
My question for BP is if anybody has ever been successful in doing a 6 month lease in Florida during the summer?
I have not run any numbers, but I understand that there's a very good chance that this property will not cash flow with only 6 months of income!
Would appreciate any thoughts or comments on this situation. Thank you!
Residential Real Estate Agent · Tierra Verde, FL · Member since 2013 · 276 posts · 130 votes
11y
@Robert Curls is correct. The 6 month lease would be subject to a 12% hotel tax. You can generally charge this to the occupant, however the bigger question is; will the association allow the short term rentals.
Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
11y
First off deals with family are difficult at best. They are even harder if they don't cash flow. As an experienced investor unless I am going to make money the deal doesn't make sense unless you are planning to live there the other 6 months. In other words those 6 months are just "extra" to pay for the mortgage. I would look at vrbo, home away, and management companies to see what like companies are renting their houses out. Also watch condo fees and rules. A lot of them have rules about short term rentals!
Bronx, NY · Member since 2014 · 42 posts · 11 votes
11y
Thank you @Elizabeth Colegrove for the response. I agree with you in terms of working with family members. To be honest, I would not go through with this deal because it would be working with family, but I wanted to see if anybody on the BP community have dealt with a similar situation.
Agent / Investor · Clearwater, FL · Member since 2014 · 573 posts · 281 votes
11y
@Rebecca Peters - So this lease would only be 6 months out of the year? As Elizabeth mentioned, will you be living in the unit the other 6 months? Or will your father be living there? All of the snowbirds come south around October for the 6 months that are NOT the summer months, if you already have a plan for a 6 month summer lease I don't think you would have a problem getting someone else for the winter months.
Feel free to PM me, I already manage a number of properties down here in the TB area so I might be able to provide some more insight/assistance.
Investor · Clearwater, FL · Member since 2013 · 132 posts · 58 votes
11y
Hi @Rebecca Peters I was actually in a similar situation. I rented a short term rental (7 months) in Dunedin this year, as I wanted to rent the home that I owned and wanted to be in a position to act when I found the next home that I wanted to purchase. The owners of the home that I rented rent their home every year (for the last 3 years) for the summer months while they come down in January and enjoy Florida for 5 months. I found a tenant for my home that I rented out on a 7 month lease (in case things didn't work out). The home that I rented was furnished, and right near downtown, and had views of the water. So it was very desirable.
While its possible, I think I'd have to side with @Elizabeth Colegrove , that if you do decide to go through with this, a vacation rental would probably be a better solution. Especially if the condo was in a desirable area. (disclaimer, I'm not a tax professional) Also if you do plan on renting it out, I've heard that if you lease for less than 6 months you have to account for similar taxes that Hotels generally are susceptible to (bed tax). You'd want to consult a tax professional for advice on that.
Residential Real Estate Agent · Tierra Verde, FL · Member since 2013 · 276 posts · 130 votes
11y
@Robert Curls is correct. The 6 month lease would be subject to a 12% hotel tax. You can generally charge this to the occupant, however the bigger question is; will the association allow the short term rentals.
Real Estate Investor · Chicago, IL · Member since 2014 · 33 posts · 58 votes
11y
So you want to be a snowbird...
I agree with what you've already heard, you probably won't break-even. Here are some factors to consider:
1. You're keeping the best months for yourself. Nov - Mar is high season. Demand is lowest Jun - Sep.
2. Seasonal and vacation rental's desirability is very location dependent. Specialized knowledge of the area is needed. Not only neighborhoods, but also building complexes- some are more popular than others.
3. Home prices are high relative to the rents they command. Expenses are high- especially property taxes, windstorm insurance, and property management (ie. maintaining furnishings, maid service).
4. Competition can be stiff, there are a lot of vacant homes. I can't speak about Tampa, but in my county (Monroe, admittedly atypical) on average only 50% of the housing stock is occupied at any given time (of course not all of it is in the rental pool).
5. Consider a condo complex that specializes in this. They have onsite management to handle all the details (ie. marketing, scheduling, checkin/out, cleaning, maintenance) plus they have an established reputation and customer base. They can give you an accurate pro forma of typical income and expenses. Even if you're not interested, they're worth contacting for informational purposes to get a better understanding of the market.
SFHs and condos are obvious choices, but there are other less expensive options:
mobile homes- not the working class MHPs found throughout the country, there are parks that cater to snowbirds
RV/campers- there are folks who drive down yearly and others that leave it permanently parked down here
liveaboards- this can be very cheap, the vessel doesn't even need to be seaworthy (so long as it floats :)
Florida can have an almost irresistible appeal this time of year. Whatever you buy, make sure that supporting it won't cause financial hardship even if there is no rental income. Otherwise owning a winter retreat may cause more stress than it relieves.
Bronx, NY · Member since 2014 · 42 posts · 11 votes
11y
Thank you all for the responses! This has been extremely helpful. To be more clear, my father would be the snowbird traveling down to Florida during the winter months. So I was interested to know if 6 month rentals during the summer in the Tampa area common.
The owner said that the condo can be rented out, but of course their may be limits to that according to the association.
Again, really appreciate the information. especially the other options for snow birds! @John Lowe
Developer · Aguada, PR · Member since 2014 · 927 posts · 279 votes
11y
depending where the condo is located, if it is furnished, you may be able to get some short term military members in there that are only in town for weeks or months.