Residential Real Estate Broker · Houston, TX · Member since 2008 · 68 posts · 3 votes
I'm looking to purchase a STR in Galveston. I'm a real estate broker and I live in Pearland. I've run some numbers and seems as though it's a great opportunity to get some decent cash flow and personal enjoyment. Below is what I've come up with. What am I missing. Are there any experienced investors out there that would like to meet to discuss?
There are a few things to take into account not mentioned. First is going to be HOT taxes on rental income. Here in Galveston, the total taxes are 15% (6% state & 9% city).
Another thing not mentioned is insurance on the property. Depending on the property, you typically need flood, windstorm, & liability.
Also water bill & sewage from the city.
One important question: you mentioned HOA in your cost. Do the HOA bylaws allow for STR?
I'd be happy to help a bit with numbers if you can give me an idea of the property and its location
Everyone covered everything. I only have a few suggestions-
1. Get a 3M Security film for all your windows. It makes them nearly impossible to smash through and I have had lawn chairs smack them in a wind and not break my windows. 2. Use stainless on anything you replace outside. Make sure you inspect the plumbing hangers under the home as they tend to be galvanized (not even hot dipped) and those don't last. The Stainless cost a bit more but you never have to do it again. (Make sure to use stainless screws to attach the hangers and replacing deck screw slowly with stainless is a great way to invest a little at a time for a long term ROI)
3. Use it yourself once in awhile, and offer people who you know a chance to enjoy it with you. No point it making money if your times not spent enjoying it.
Having impeccable house cleaning service is essential. After suffering bad reviews for cleanliness issues on Port Bolivar, we found a great company in Galveston who has completely changed our cleanliness reviews to “sparkling clean”, every review.
Do not underestimate how critical this is for guests and how it can hurt your business even if you’re doing every thing else right.
Thanks Andrea, i know it is not proper to asking any detail service company name , and if i can get my beach hut as my wish, i will turn to for more information, hope you can share with me.
Many thanks to all you guy's helped me, another uncertainty is the occupancy rate, my calculation is 180 days, as @Luke Carl said it's too conservative, what should i apply for a neutral forecast? 240 days? And also, according @Gregory Wesley 's spreadsheet, his project is a bigger and better house than mine, my budget for house is 280-330k, which means i can't be very picky on lists on HAR, is there any information regarding the return rate on different house type (2br 3br 4br) , for example, which type is most popular in Galveston?
Below is my plan please help me to find my fault(???):
3br new house, not far from water, viewing of sea will be the best .(no matter from which window)
During perk hour:May to Sept, daily rate 450 dollar/day(???), occupancy rate: 120/150(???);
Normal time: March/April/October, daily rate 300(???), occupancy rate: 60/90(???),
Then total rental income 80k, occupancy rate 220/365=60%, average rate:363.
If we ignore daily maintain cost(utility, cleaning fee, insurance),is this ratio 24%(80k/330k) practical? I am an idiot of airbnb investment, if i was wrong on the above assumptions, please tell me.
I wish I could get those occupancy rates. I am buying across the ferry in Crystal Beach. I should close next week. I am planning on about 180 days. I am a little off the beach, but have car and pedestrian access from the hood. There are obstructed beach views and I am buying a very nice place under 300K. It's pristine, has rental history and is only a couple years old.
You are wrong about being picky at that amount. You cannot afford to not be picky. For me, this is a place I want to spend some time in. I am not necessarily going to use it as a main revenue stream, but I want it to make some money. So, it needed to be a place I would want to go to. And, I assume, others would also want to go to. My wife is extremely discriminating, so we must've looked at 100s of properties to find this one. 3 bedroom, 2 bath, garage, better flood zone rating, access to the beach, very nice with little work needed to get it operational. I'll do most of the maintenance myself, keeping up on all the exterior items.
In looking at some of the places for sale, the prices were the same (or higher). Or in some cases lower. But all required a lot of work to make it a place I'd want to spend my time at. In some cases it was floors or poor workmanship, in others it was heavy damage and dead roaches on the floor.
I missed out on a fantastic deal. I didn't pull the trigger fast enough. The new place is more expensive, but it is a little nicer, a few years newer and a little closer to the beach. As such, I may be able to pull more money for the rentals.
The previous owner would not rent to certain people. In fact, he would ONLY rent to families. No Jeep or motorcycle weekends. So he was leaving some money on the table. In my case, I'll cater to them to pull in additional revenue and include amenities like towels for wiping down the bikes and jeeps.
For me, I want to have repeats. Perhaps I am naive but I think it can happen. A number of reviews for the house on VRBO had comments about wanting to return. I will take the feedback from those and make adjustments. He has a 4.9 rating and I want to make mine a little better.
And, at least in Crystal Beach, VRBO gets more business than AirBnb.
In Galveston, you should get a higher occupancy rate than I am shooting for, but I'd rather not spend my time in Galveston proper when I am on vacation.
This thread is very helpful! We are closing on our STR next week. It has been a rental for years and we have stayed there numerous times over the past few years. The owner knew that I had been looking for a house for years so she finally offered this one to me. (she has a few).
My question is; any recommendations for cleaning/maintenance crews? I could keep her current crew but sometimes it's not as clean as I would want it to be if it were mine.
I live in North East Texas so I will need boots on the ground on the island.
@Leisa Neal Congrats!! As far as cleaning crews, I use 3 Broads & a Broom for most of my properties but have tried a few others with varying results. One of the main things is to focus on people with multiple cleaners vs a single person. With the summertime and quick turnovers, it can sometimes be more than a single person can handle if they are doing multiple properties.
Also, make sure your cleaners are willing to stock all goods needed so you can buy in bulk and keep them in an owners closet. 3 Broads & a Broom do this as well as buying me new linens or small things that need replacing!
@Timothy Church Thank you! That is good to know. I was wondering how they can possibly manage all those turn-overs in such a short window of time.
Do you have in town or beach properties? I am a bit apprehensive about mine since it's mid island. But I'm shooting for girls' trips/couples get away and it's centrally located so I hope that's a draw. I'll need to spruce it up and make it more appealing.
@Leisa Neal My personal ones are in town. I was managing quite a few for a while but we have our first little one on the way so I had to cut down on the workload. Mine have stayed well occupied! If you have questions about yours, I subscribe to AirDNA for the island and be happy to show you potential performance as well as other tools I use. Just PM me and we can grab coffee sometime!
@Timothy Church Congrats on the new addition! I may look you up next time I'm down. I have some updates to do and a walk-thru of the house may help me know better where to put money!
......do you have a favorite contractor that you use for updates and repairs? I went to look at my new investment and see some things I'd like to have done but I have no idea who is trustworthy down there!