How to find the best short term vacation rental?

Question

Hello BP! Recently my husband have been discussing the idea of investing in a beachy vacation rental (VRBO or Airbnb) investment. Short term, we would like to use it once a year when we visit family in Florida and rent out through the remaining year. Long term we would like to have it as a"landing pad" half of the year once we retire (10yrs). Travel and real estate are 2 things we love! (Hoping they can go together hand in hand for a good investment!)

I have been searching at mostly condos etc...(for a lower maintenance property)but find that most HOA's dont allow short term.

Does anyone have recommendations on websites or other sources to find these hidden gems?

Pros and cons?

Pointers?

Thanks BP fam!

I have been searching at mostly condos etc...(for a lower maintenance property)but find that most HOA's dont allow short term.

Does anyone have recommendations on websites or other sources to find these hidden gems?

Pros and cons?

Pointers?

Thanks BP fam!

Paul Sandhu · Answer

Corpus Christi or Galveston.  Here is my standard plug:

Those are refinery towns.  The refinery in my town is 115,000 barrels per day.  Those 2 towns each have the refining capacity of 600,000 bpd.  There are always contractors at refineries doing scheduled maintenance, emergency repairs, capital expansion, inspection, turnarounds, etc.  Those jobs are temporary.  2 weeks to 6 months.  The guys doing the jobs need a place to stay.  In my town I rent my 23 STRs to refinery contractors.  A motel room with 2 beds is $400/week.  I charge $600/week for a 3 bedroom house.  I buy bank foreclosures.  Most 3 bedroom foreclosures go for $9500.

You can do your STRs to contractors and tourists.  The nice thing about contractors is that they get a per diem, and they are going to be there longer than a tourist.  Two of my STRs have been rented by the same contractors for over 12 months, and I'm getting weekly rent from them.  There needs are pretty basic, a place shower, do laundry, cook food, drink beer and sleep.  It doesn't hurt to decorate your places like Hugh Hefner would decorate his own.

John Underwood · Answer

Where is your family in Florida?

I would want to find the best location that was close to where your family is.

Paul Sandhu · Answer

@Christina Colon  Coffeyville Kansas.  If you Google "worst town to live in Kansas" we were #1 in '17 & '18.  This year we are #3.  This town also has the lowest average mortgage payment in the country, $206.  In '17 our per capita homicide rate was right behind Baltimore and Chicago.  Drive down any street and you'll see dishevelled people wandering around and talking to imaginary people (they are whacked out on meth).  Leave a ladder, grill or anything of value in your yard and it'll get stolen.  Some people call this town Hades, and I'm holding the pitchfork.

Justin Ellis · Answer

@Christina Colon I don't have STR experience in Scottsdale, I just moved here from Tucson a few months ago and all my units are there. I have however heard that the market here is strong for STR so I've been poking around.

There's a realtor on here @George Mevawala that just posted about that as his focus and providing investors double digit COC returns. Look at my profile under my recent activity, I commented on it. He would be a good place to start.

Not that this fits your strategy, but there's also a group that focuses on Luxury STR's (Lease options) and their main market is Scottsdale, so I know those properties do well here for sure (I'm talking 6+ bedroom multi-mil type of homes). Just a testimate to the strength of the market. Tons of that in the Paradise Valley area which is adjacent to Scottsdale, just FYI.

Avery Carl · Answer

Make sure you are looking in a true vacation rental market, most of the HOA's in those markets are going to be receptive to short term rentals because the area has been dependent on them for decades. Destin, 30a, Siesta Key, and many others. You shouldn't have a problem finding condo buildings that allow STR's!

Christina Colon · Answer

@Chase Cline thanks I will give it look

Jon Pazevic · Answer

Christina:

The panhandle of Florida has been very receptive to STR's, and we have bee investing there for 25 years, with 5 homes. We started with condos, but it is hard to break even with current prices and the high HOA costs. most property managers will charge 25-28%, but a few will charge 20%. We currently have a Property management company, Sand Dollar Vacation Properties, but we only manage our properties currently in Miramar Beach and scenic 30A. Prices: Pensacola/Ft. Walton Beach less, Destin and Miramar Beach more, 30A a lot more (mostly homes with few condos). Sweet spot is a 2 bedroom condo, or 1 bedroom with hallway bunks across the street from the beach with pool and beach access. These are best value for money. For homes, sweet spot is 3-4 bedroom 3-4 bath, with community pool or private pool, 3 homes to 3 blocks to the beach. Homes on the beach or across the street from the beach will be in the range or 1 million to 10 million. Homes in Seaside, Watercolor, Rosemary and Alys Beach all start around 1.5 million, even if they are 3-4 blocks from the beach.  Recommendations for property managers in destin/30a area are gulf tide vacations, dune vacation rentals, and my vacation haven. They are not the biggest, but I believe they give good service and value. For a realtor, Contact  Diane Green or her daughter , Heather Green at Newman Daily in Miramar Beach--Diane helped us with 7 transactions. Always ask the realtor for past rental information on a property, and rental projections. Best of Luck!!!

PS, I think Orlando is great value, with demand actually exceeding supply (60 Mill tourists annually), eg home 3/2 with pool 6 blocks to Disney, 260k-300k., or St. Augustine on North East Coast.

Jon

Chase Cline · Answer

I would check out Corpus Christi and North Padre Island as well. The prices are half of that of Florida and rent almost as well. We bought a 1/1 condo for $135k and it did $28k revenue last year.  You can just about cover the cost of the place during the prime summer months and then live there the other extremely peaceful and quiet 9 months! Feel free to shoot me a message if you have any questions.

Christina Colon · Answer

@Justin Ellis thanks so much! We have family in the Scottsdale Area as well. Do you have any experience  with  STR's there? If so any comments to share?

Christina Colon · Answer

@Paul Sandhu Oh wow ha! Glad you are thriving in that environment! Good work.

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