Real Estate Broker · Tyler, TX · Member since 2018 · 193 posts · 143 votes
We would like to purchase a 2nd home, Caribbean, Florida, Gulf Shores, North Carolina...you get the drift. What we are hoping is that renting this on Airbnb, Vrbo, etc will pay for the mortgage. Now we know that it's seasonal and that we have to take into consideration that most of our money will be made Spring/Summer...that being said, who is doing this and is it working for you?
The Caribbean can be very lucrative, and less chance of regulations getting in the way. The US is much riskier with so many cities trying to regulate STR's. I have a Bahamian rental (not technically the Caribbean) that is grossing six figures this year and we are still using it for about a month. Paid $600K for it and put in about $100K. Property taxes are $1500 a year and that includes trash pickup three times a week. I self insure it and water is collected in cisterns, so no water or insurance bill. Airbnb gives one million of insurance while the guest are there. Electricity is about $300 per month. I am pretty happy with how it has worked out. Every month gets rented except September.
The Bahamian dollar is pegged to the US dollar, they speak english, and it is a 35 minute flight from Miami or Ft Lauderdale. It is not a litigious country and seems to be landlord/investor friendly. Show me a place in the States that can provide similar results....
Yes, we have two beach front condos that generate a decent cash on cash return, have appreciated, and of course pay for themselves. I live in TX and the condos are a 1B1B in Orange Beach, AL and a 3B3B in Gulf Shores, AL. We use a local property manager for the bulk of bookings and also use FB to fill in the gaps in the calendar.
Since you listed locations all across the map, pay attention to off seasons for the area you choose. Some off seasons markets are absolutely dead and some can still generate income. Snow Birds flock to the beach Nov-Feb and we usually rent to them for break even prices.
I agree with Ross. In Orange Beach & Gulf Shores, there are lots of good opportunities, but it can be risky trying to do it on your own with Airbnb, etc because it can be tough to make sure you can get the cleaning crews & maintenance folks when needed on a long distance basis. I would use a professional manager to make sure all of that is covered and to have local eyes on the property & then promote yourself through facebook groups. We have clients doing that very effectively. Folks seem to enjoy being able to interact with the owner, but the owner benefits greatly from professional oversight. Not so sure I would consider the Caribbean. Too many laws & policies that may interfere with your ability to manage profitably.
I agree with Ross. In Orange Beach & Gulf Shores, there are lots of good opportunities, but it can be risky trying to do it on your own with Airbnb, etc because it can be tough to make sure you can get the cleaning crews & maintenance folks when needed on a long distance basis. I would use a professional manager to make sure all of that is covered and to have local eyes on the property & then promote yourself through facebook groups. We have clients doing that very effectively. Folks seem to enjoy being able to interact with the owner, but the owner benefits greatly from professional oversight. Not so sure I would consider the Caribbean. Too many laws & policies that may interfere with your ability to manage profitably.
Candance, could you suggest some groups on FB? My reach is limited to friends, family, and sponsored post. Thanks.
@Ross Kerne I hadn't thought about the off season visitors. I suppose that's something I should really look into! Is the market just flooded there in Orange Beach & Gulf Shores? Do you stay pretty booked, what % do you book over the year (as in you have occupancy what % of the year).
@Candace Pfab Thanks, I guess the Caribbean should have probably been an obvious no (guess I was dreaming of a Caribbean vacation whenever I wanted it)!
How have your property management companies performed? How long have you used them? Thank you both for the responses!
@Angie Shires We have been very pleased with the ones we haves used which has been 10+ years, but if you are doing a condo, I usually recommend looking at one of the ones that dominates that building :)
@Ross Kerne What seems to work best is create your own Facebook page for your property like this one: Facebook.com/Tidewater605 & link it to the booking site with a book now option. Promote that link on Orange Beach - Gulf Shores Lovin’ Life, Baldwin County Homes/Rental/For Sale/Vacation Rental & Last Minute Vacation Deals - Orange Beach/Gulf Shores. This page had over 150 views last week!
AFter 5 Vacation Rentals in Sevierville TN. I have to say absolutely Yes to this question. We are currently working to snow ball and then purchase 2 on the beach. Not sure which one yet but actively looking! 5th one paid in full! Looking to cash out refinance to keep the investment formula running. Each one so far is generating minimum of 20k net. Can't argue with the numbers.
The Caribbean can be very lucrative, and less chance of regulations getting in the way. The US is much riskier with so many cities trying to regulate STR's. I have a Bahamian rental (not technically the Caribbean) that is grossing six figures this year and we are still using it for about a month. Paid $600K for it and put in about $100K. Property taxes are $1500 a year and that includes trash pickup three times a week. I self insure it and water is collected in cisterns, so no water or insurance bill. Airbnb gives one million of insurance while the guest are there. Electricity is about $300 per month. I am pretty happy with how it has worked out. Every month gets rented except September.
The Bahamian dollar is pegged to the US dollar, they speak english, and it is a 35 minute flight from Miami or Ft Lauderdale. It is not a litigious country and seems to be landlord/investor friendly. Show me a place in the States that can provide similar results....
I’m doing it in Cortland, NY - the middle of Upstate NY. No tourist areas, nothing special about the town, just a pass by area. I have my AirBNB booked solid for the summer months and some months in the winter. If a “middle of nowhere” area can do great with AirBNB, I think anywhere can.
Nick what type/size property do you have and what made you try to airbnb it? Was is a LT rental first? I curious as I am looking at going from LT rentals to trying airbnb.
I was stationed in Pensacola two years ago and loved Orange Beach, Ft. Morgan, Gulf Shores. My husband and I looked at doing this, but are very weary of management companies. We’ve had terrible experiences with PMs with our long term rentals. Are you willing to share which companies you use? Also, we are from MT....not much for major weather disasters here, but it seems like its inevitable in that area. Have you been through a hurricane or tornado with your STRs? If so, how was the PM’s response?
@Patrick Soukup Exactly, that's what it's all about! If we can enhance someone else's life by providing a nice, safe place to stay during vacation and in turn pay for our own vacation home...well, it's a win-win!
@Drew Ogden Wow, that's good information to learn, Thanks! Seems very reasonable and investor friendly. Does anyone have anything to add to Drew's post? More pros/cons?
@Patrick Soukup Exactly, that's what it's all about! If we can enhance someone else's life by providing a nice, safe place to stay during vacation and in turn pay for our own vacation home...well, it's a win-win!
@Drew Ogden Wow, that's good information to learn, Thanks! Seems very reasonable and investor friendly. Does anyone have anything to add to Drew's post? More pros/cons?
Hi Angie,
We actually invest in the Pensacola, FL market mostly doing flips, but we are getting into the airBNB sector now as well. We have found in our area that as long as you stay off of the beach and find something in or near downtown Pensacola, you can stay pretty insulated from the seasonality of it.
Instead of a PM, have you thought of looking for someone to co-host with? That way you can find someone who specifically works with short term rentals and has great systems for the daily surprises that PMs may not be used to.
They perform a lot of the functions that a PM would cover but bring AirBnB specific experience, and for some, you can use their credibility and ratings to make your property rank better if they are a preferred host. Normally they charge a fee and handle the cleanings and guest issues. A lot of it comes down to credibility and niche expertise.
There are a few ways that I know of, not sure if they are the best. Find the top 2 or 3 hosts in the area that you are looking to by in and see if they offer the service, 2. There are people who have systematized it and do it nationwide, I have seen "Hostie" as one. Never used them, so cannot give a recommendation for their quality of service. Air BNB used to have a database of co-hosts on their side, but have removed it.
If you want more info on the Pensacola market, I am licensed in Florida, and know a few hosts that may be interested in providing services depending on the property profile.
I agree with Ross. In Orange Beach & Gulf Shores, there are lots of good opportunities, but it can be risky trying to do it on your own with Airbnb, etc because it can be tough to make sure you can get the cleaning crews & maintenance folks when needed on a long distance basis. I would use a professional manager to make sure all of that is covered and to have local eyes on the property & then promote yourself through facebook groups. We have clients doing that very effectively. Folks seem to enjoy being able to interact with the owner, but the owner benefits greatly from professional oversight. Not so sure I would consider the Caribbean. Too many laws & policies that may interfere with your ability to manage profitably.
Are there still good deals in Gulf Shores for this type of scenario? We're looking for 2br/2ba or 3br/3ba around $400k with 25% down. We were looking at Panama, Destin, Pensacola area and it seems everything is expensive now if trying to STR.