How to start with a vision

12 Replies

I have a duplex that I live in that is in a hot market, there is also another duplex next door that the older owners (out of town) are considering selling.    The properties are blocks from the many amenities of the area.   Both properties required major updates to meet the potential of long term vacation rentals.   My questions, how do I start?   I have a vision of the properties end state, but I do not have the experience on how to go from potential to end product.      Thank you!

First check to see if it is legal for you to have a vacation rental in this area.
Then check other properties on VRBO and Airbnb and see how other people are doing in this area. Keep in mind just because they are there doesn't mean it is legal.

You mention long term vacation rental. Is this all this allowed? If so this will be tougher to find enough people who can take a long vacations to keep your place rented enough to make money.

You will need to renovate and decorate to make it into a vacation rental. make sure you have the funds to do this. You can always start off with quality used furnishings for some items to get you going.

Is "blocks" = 2 or 8?  If only a few then people can walk which is a huge plus.

I would think someone that can afford to have the money and time for a long term rental will be older so take this into consideration.

What's a "Long Term Vacation Rental"?  I've never heard that phrase before.  Can you hip me to the definition?

In my area short term rental requires a license granted by the local government, these license are limited and expensive.  Short term rentals are 28 days or less, long term rentals are 28 days or more.    "Vacation" can be removed, but identify why most visit the area.

Gotcha.  If someone can afford to take a 28 day vacation, they can probably afford to own their own vacation house.  I don't think there is a big market for 28+ consecutive day vacation rentals.  You might be better off with a LTR. 

Or just buy the STR permit and build the cost of the permit into the rent. It's much easier to rent out a place like that for 7 days instead of 28 days.

@James Karch I think, similar to what @John Underwood and @Paul Sandhu implied, the first step is to figure out the demand.  It's Key West, I presume, where it wouldn't surprise me if there is a healthy market for >28 day stays, but you need to *know*.  Where are they advertised?  What rates are commanded by units comparable to what yours would be?  See if you can contact owners/property managers to ask about occupancy rates.  You really want to get a feel for what a realistic income potential is before you make a move.

If all of that checks out, look at your monthly expenses.  You've already got one duplex so you should have a really good idea of current insurance costs, utilities, etc. (ask your insurance company what kind of additional coverage you'd need for these mid-term stays)

If it looks like there's a nice bit of cash flow in there and you want to move forward, get a couple of licensed contractors to go through both the properties and give you quotes on a rehab.  

If everything still looks good, work on getting the financing and making the deal happen!  But the above is the order in which I'd approach it, and if at any point the numbers don't make sense, walk away.

Hi @James Karch !  My name is Krystal Thomas an I am a real estate broker with Preferred Properties in Key West that specializes in vacation rentals (both long term and short term).  There absolutely is a market for 28 day rentals and I'd be happy to be your real estate resource and guide you through the process.  Shoot me a private message and we can connect to talk about your vision and how to get there. 

It would be useful if you guided him to the evidence and proof there is a strong 28 + Market. Before being a resource to get him to buy something.

be leery of a salesperson looking to "help"

In every business transaction one party ends up richer and another ends up wiser.

Took a look at Craigslist Florida Keys vacation rentals.  Holy moly, there's a lot of properties listed.  At least 30 just today.  I looked at Southeast Kansas vacation rentals and there has been only 1 ad in the last 45 days, mine.

What I'm implying is that if there are that many people advertising their places on CL for rent, it implies there are that many, if not more, vacant vacation rentals in the Keys.

Originally posted by @Paul Sandhu :

Took a look at Craigslist Florida Keys vacation rentals.  Holy moly, there's a lot of properties listed.  At least 30 just today.  I looked at Southeast Kansas vacation rentals and there has been only 1 ad in the last 45 days, mine.

What I'm implying is that if there are that many people advertising their places on CL for rent, it implies there are that many, if not more, vacant vacation rentals in the Keys.

 Putting The 'ville and SEK on the map. I respect it.