Short term rentals in Jax

[Josh Norell]

Howdy, I'm looking to invest in a short term rental property in Florida. Namely Jacksonville, but I'm not set on this. I've read/heard about the significant returns over long-term rentals that can be had, however I'm having a hard time putting together numbers that play out this story. So I'm looking for advice and input from those with STR experience, or at least in the know.

What interests me is a moderately priced property, targeting the normal folk. Not a luxury rental. Here's what I came up with, using what I feel are somewhat conservative assumptions:

180k - purchase price

4k - closing

10k - furnishing / rent ready cost

Potential income

$3000 / mo(@$100/night)

Expenses

$900 - %30 vacancy

$150 - capex(5%)

$300 - maintenance(10%)

$100 - water/sewer

$150 - electricity

$60 - insurance

$160 - tax

$750 - management(%25)

$660 - P&I(25% down, 30 yr, 4.2%)

The bigger-pockets calculator break-down is attached. Add it all up and it comes to -7.5% CoC, and a 1.94% cap rate. Quite underwhelming in my book.

Can someone poke holes in my assumptions? Tell me what I'm missing? Most people must be doing much better than this, or no-one would be doing it. Maybe I could get a bit lower vacancy in the long term, maybe a bit more than $100 a night, but I think my assumptions are in the ball-park.