Average Net Cashflow on your property on the emerald coast?
To any investors that have STRs on the emerald coast. I am seriously looking at getting into the short term rental market on the emerald coast. What is the average net cash flow that you receive from your property after all expenses?
I cash flow about $1000 a month or so. I have a mortgage and HOA fees. Still does way better than my LTR that have mortgages on them. When I get my STR paid off which will be a few years, the cash flow will probably be $2500-$3000 per month, but will probably just by another when the right deal comes along. I look at cash on cash return as a way to evaluate how things are going as well. I'm at around 17%-18% annually, which means in 5-6 years I will have no money in the deal. That's where the profit is, of course the tax advantages of mortgage interest, property taxes snd deprecation make the numbers way better than only CoC. I have a 3/2 house two blocks from the beach.
I sell the Emerald Coast (Panama City Beach to Navarre). A rule of thumb for GRI is 10-15% of the purchase price. I know you asked about net cash flow, but I thought I'd share that number in case it helps.
One of the issues here is insurance, and that can vary widely depending on property age with the best rates, of course, going to properties built after 2001. This will greatly impact your net cash flow, so I wanted to mention it.
Everyone’s net is going to be different. You and I could own the exact same property and have the exact same gross but different nets over something as small as a difference in our minimum night stay requirements or the types of sheets we buy.
Unless the person bought a month ago (and probably even then) someone's net cash flow isn't going to be very relevant to you as you're not going to be buying with the same terms as them.
You're better off gathering up revenue projections and all of the expenses and doing the calculation yourself based on your purchase price. Your debt service is likely to be more than double what anyone that purchased more than a year or so ago is paying every month.
Hey James! Stoked for you jumping into the STR game out here. The Emerald Coast can produce some huge numbers. Net cashflow is going to differ person to person depending on acquisition date and price, in addition to expenses. Some folks might not have a mortgage, and some might have a large mortgage, and even though they might produce the same gross income, their net cashflow will be different.
Over the past couple of years we've shot for gross income of 15-20%+ of the PP, but now shooting for 12-15%. Higher than that can definitely still be achieved if you know where/how to look! Happy to help if you need any more advice or recommendations out here, let me know!
Quote from @Kenneth Garrett:
I cash flow about $1000 a month or so. I have a mortgage and HOA fees. Still does way better than my LTR that have mortgages on them. When I get my STR paid off which will be a few years, the cash flow will probably be $2500-$3000 per month, but will probably just by another when the right deal comes along. I look at cash on cash return as a way to evaluate how things are going as well. I'm at around 17%-18% annually, which means in 5-6 years I will have no money in the deal. That's where the profit is, of course the tax advantages of mortgage interest, property taxes snd deprecation make the numbers way better than only CoC. I have a 3/2 house two blocks from the beach.
@ Kenneth Garrett
Even with that kind of net cash flow that is still way beyond what a LTR could achieve, you are netting $12k a year on one property. In my eyes if you can stand being in the hospitality business STR investments are the fastest ways to achieve financial freedom