Beachfront Vacation Rentals
Investor · Victoria, MN · Member since 2016 · 93 posts · 31 votes
@Craig Fitzsimmons I have three vacation rentals in Fort Walton Beach, FL (near Destin, FL on the Panhandle). I self-manage and I live here. I know that is a bit more difficult for people who don't live in the area where their rentals are located. I have found out that paying a full-service rental management company can certainly provide peace of mind and a totally "hands-off" experience for out of town owners, but the 20% to 30% of gross rental income fees pretty much eradicate any potential profits you hope to make. My two established properties were rented about 300 days last year. I usually have very little vacancy. The third property I just bought, so can't give stats for 2017. Occupancy really depends on several factors. One is obviously the area. Down here in Florida we have the beach season, but we also have the "snow birds" in the winter. While off-season is slow for many rentals here too, there is definitely potential to fill the units. Most of my vacancy is usually in November (except for Thanksgiving), early December and the 1st week of March. The other factors that play into occupancy is the quality of the property (good upkeep, well decorated, amenities, etc), the pricing (needs to be competitive off the bat, pricing too high only to offer constant "deals and discounts" is a turn-off for many guests, pricing too low or not in keeping with the season leaves profit on the table), and the management style/response (whether self-managed or otherwise). Prompt, professional response, attentiveness to every guest and all their questions, etc is key. I know that many people find it very daunting to manage their own vacation rentals from a distance, but you should really consider it or at least consider managing your own "partially". I don't want to promote my business here because that is against the rules of the forums (which I respect), but if you ever have questions about various "hybrid" programs and assistance to VRBO owners who manage themselves, I will certainly be glad to discuss further as I provide some of those assistance services down here in Ft Walton Beach.
Wherever you choose to buy, it's a good idea to visit in the off-season as well. Also, when you do your "rental income pro forma analysis" be very conservative with expected occupancy especially in the first year. Owning vacation rentals on the beach is great if you put in the time, the research and attend to your guests. They have many options to choose from.
Congratulations on your new venture! I love the short-term rental industry....it has been a fun and exciting experience for my husband and myself.
1) Our first vacation rental property was a condo in Summit County, CO (about an hour and a half from where we live.) That one did so well that 2 years later we bought our first condo on Okaloosa Island (Fort Walton Beach, FL) in a small beachfront building. Two years later we bought a second condo in the same building and (true to form) two years after that we bought our third in the same building (this past January.) We also bought a stand alone home to rent on the short term market last year in Lynchburg, VA, the home of our alma mater. (I guess we agree with @Jon Crosby's suggestion to buy in places you like to visit!)
Our FL condos are our most successful rentals (which is why we keep investing there). However it has been our experience that all of our rentals have "paid for themselves" (mortgages, HOA fees, utilities, advertising, and any other expenses) after our initial investment of down payment/closing costs & the cost of all of the furnishings/bedding/linens/etc needed to get the property up and running.
2) We only owned 2 of our condos on Okaloosa Island during 2017; one of them was rented 236 nights and one was rented 279 nights. We used each condo ourselves several weeks during the year.
3) I do "self-manage" our own properties. I also handle the marketing and bookings for some other owners in different areas of the country. My experience in this industry began when I was employed by the original founders of VRBO. One of the first things they taught me was how to handle their vacation rental property in Maui, HI, so you could say I "learned from the best". I continued working for VRBO after it was sold to Homeaway in 2006; I retired in 2013 which is when I started my own marketing & booking service for owners of vacation rental properties. I am so thankful for the experience of working for VRBO in those early days and under the tutelage of the original founders; that experience has impacted my life in ways that I would have never dreamed.
You've received some good advice from the other contributors of this conversation so I won't repeat it. I will say that I consider my housekeeper the key to our success and could not be successful without her! I never miss an opportunity to praise and thank her for her work on our behalf. I pay her more than her original quote for the service and she gets a $20 bonus any time one of my properties receives a review that mentions how clean the guest found the property.
Best wishes to you & your wife in your new venture!
@Matt J. Most people who own vacation rentals in Florida don't live here, yet many self-manage very successfully. All you need to do is look at listings on VRBO that are owner managed and read the owner bios. You'll see that many people from the mid-West and all over own and self-manage, especially is you personally like visiting the area occasionally for "supervision". There are many very knowledgeable and helpful people on these forums. I learn stuff every time I read through post. So ask away. Do you have a particular area where you would like to own?
That's awesome to hear. Right now I'm more focused on putting together some more long-term rental properties, have a couple up in Duluth, MN, but would definitely like to get a place in the Tampa/St. Pete area. Ideally in St. Pete Beach, but think Treasure Island or Clearwater would be great as well. Is that a pretty solid area for short-term rentals?
Thanks for the offer @Luke Carl! I'll send you a connection request. Very helpful advice throughout this post!