Short Term Vacation Rental in Daytona Beach?
Rental Property Investor · Livonia, MI · Member since 2017 · 17 posts · 2 votes
Short Term Vacation Rental in Daytona Beach?
Most Popular Reply
Real Estate Agent · Member since 2023 · 91 posts · 80 votes
2yIn a nutshell, the last two years we've seen an uptick in out of state investors. The issue I've seen is some of the properties they purchased were in awful condition. Warped roofs, wood rot and area selection among other things. So, in my view it seems they are unloading properties they shouldn't have bought in the first place (or should have had more info about).
As a local realtor who works with investors from all over I will say this. If you are an out of state investor, these things will save you money, time, and make your investments sound. Make sure your realtor can solidify these for you.
1. Property construction- CONCRETE BLOCK, this is what you want here (if it's not a primary residence). We are a very wet humid state that can wreak havoc on wood framed properties (wood rot, termites, storm damage). Most states in America have a majority of framed housing. But in Florida it simply does not do well from an investment standpoint.
2.Flood zones- If you are in a flood zone (or if the house has flooded previosuly) be aware not only will you incur new flooring, drywall costs etc. but if you want to flip the home, NO LOCALS are wanting a home that previously flooded. Thats why some homes are sitting on the market for months...
Those are some big ones for sure. Feel free to message or connect if you have any other questions. But insurance if your property is solid and not in a flood zone still isn't that bad. Hope this helps!
5 Replies
- Real Estate Agent · Member since 2023 · 91 posts · 80 votes2y
In a nutshell, the last two years we've seen an uptick in out of state investors. The issue I've seen is some of the properties they purchased were in awful condition. Warped roofs, wood rot and area selection among other things. So, in my view it seems they are unloading properties they shouldn't have bought in the first place (or should have had more info about).
As a local realtor who works with investors from all over I will say this. If you are an out of state investor, these things will save you money, time, and make your investments sound. Make sure your realtor can solidify these for you.
1. Property construction- CONCRETE BLOCK, this is what you want here (if it's not a primary residence). We are a very wet humid state that can wreak havoc on wood framed properties (wood rot, termites, storm damage). Most states in America have a majority of framed housing. But in Florida it simply does not do well from an investment standpoint.
2.Flood zones- If you are in a flood zone (or if the house has flooded previosuly) be aware not only will you incur new flooring, drywall costs etc. but if you want to flip the home, NO LOCALS are wanting a home that previously flooded. Thats why some homes are sitting on the market for months...
Those are some big ones for sure. Feel free to message or connect if you have any other questions. But insurance if your property is solid and not in a flood zone still isn't that bad. Hope this helps!
- Rental Property Investor · Livonia, MI · Member since 2017 · 17 posts · 2 votes2y
Quote from @Paul Pratt:
In a nutshell, the last two years we've seen an uptick in out of state investors. The issue I've seen is some of the properties they purchased were in awful condition. Warped roofs, wood rot and area selection among other things. So, in my view it seems they are unloading properties they shouldn't have bought in the first place (or should have had more info about).
As a local realtor who works with investors from all over I will say this. If you are an out of state investor, these things will save you money, time, and make your investments sound. Make sure your realtor can solidify these for you.
1. Property construction- CONCRETE BLOCK, this is what you want here (if it's not a primary residence). We are a very wet humid state that can wreak havoc on wood framed properties (wood rot, termites, storm damage). Most states in America have a majority of framed housing. But in Florida it simply does not do well from an investment standpoint.
2.Flood zones- If you are in a flood zone (or if the house has flooded previosuly) be aware not only will you incur new flooring, drywall costs etc. but if you want to flip the home, NO LOCALS are wanting a home that previously flooded. Thats why some homes are sitting on the market for months...
Those are some big ones for sure. Feel free to message or connect if you have any other questions. But insurance if your property is solid and not in a flood zone still isn't that bad. Hope this helps!
Paul, thanks for all the great information on this market. We are looking to purchase a place to vacation and lease out 30-90 days at a time while not in use. I would love to connect when we take a due diligence trip to Daytona.
- 2yAndrew SteffensBusiness MemberTampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
I am not well versed specifically in Daytona, however I am fairly well versed in nearby Orlando and am based in Tampa. In Orlando there was a bit of a "gold rush" to purchase affordable houses near the parks and make a ton of cashflow during COVID when FL was one of few places open. Since then values and rates have both gone up while increased supply due to too many buyers/investors has caused cashflow to drop. Also local demand dropped as COVID subsided and also some political issues with Disney and FLGOV. This is a perfect storm for a sell off in Orlando.
Tampa has had significant revenue correction but remains stable and can still be profitable.
Vacation Rentals of Florida53 Reviews - Property Manager · Orlando, FL · Member since 2023 · 106 posts · 64 votes2yLike a couple others have mentioned, through & post Covid we saw a lot of tourists visiting Florida which lead to a really profitable STR market in 2021/2022. A lot of investors bought into the market and it has since cooled off. I work for a LTR company in Orlando, but we cover Daytona as well. I've had quite a few sales calls from owners with STR in the Kissimmee (Disney) and Daytona areas trying to transition to furnished LTR because they are not performing well enough. I presume it's because the markets are becoming saturated at the same time as the tourists numbers peeled back a little. And yes, insurance costs are rising, especially in those coastal areas. I really think it could be a combination of variables.
Quote from @Nicholas Middleton:
What is going on in Daytona beach? I am seeing lots of properties popping up in my email these past few months? Is this due to insurance costs? What do you know?
- Real Estate Agent · East Central Florida · Member since 2021 · 121 posts · 94 votes2y
Nicholas - As an active local, hands-on, investor and licensed Realtor in the Daytona area, here's my take: People generally watch too much television. With so many home related shows out there, it is like a modern day gold rush of sorts. The other posters have given some excellent points, like info about the State of FL during and post COVID, etc. These are all contributing factors, but overall it is more just a new type of "gold fever". Many so called "investors", especially from out of the area, see opportunities being had and they don't want to miss out. Subsequently, many will jump in the deep end of the pool with their fingers crossed, hoping they float and things turn out profitable. This could help explain the recent surge of properties in your inbox. Those "investors" who pulled the trigger without aiming, or those who were bamboozled by dishonest "wholesalers" are now trying to get back whatever they can before the market slows to the point they may have a vacant property.
If you take the time to understand a property and the potential, making sure to buy it right, you should set yourself up for success regardless of what your end game is. Don't buy a property because you need a property. Buy one because it is a good deal for you.
I agree with Paul about the concrete block vs. wood example. I purchase both, usually as flips, but won't generally purchase anything wood in a flood zone. On the topic of flood zones, they bring more risk, but can also bring more return. If you are planning to hold as a LTR, a flood zone will generally give you a better opportunity to buy the same house for less money, raising your monthly net. It may require flood insurance, but the renter pays that for you. There are plenty of flood zone areas that are lower risk zones, allowing you to use calculated risk to your advantage.
Feel free to message or connect. If you are ever in the area, I would be happy to show you some of my personal projects and answer questions, so you can get a better feel for the area through the experience(s) of an actual local investor.
Cheers.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.