All Forum Posts by: Alice Horn

We're going to the https://bookdirect.show/conference, also in Miami this month October 18-19. If anyone else will be there, say hi!

Quote from @Audi Pine:

Hi! We live in Hawaii.. We're new to investing and just trying to get started. With the market being the way it is, we are looking to invest outside of Hawaii and hopefully once we get enough capital purchase something else here.  We have a pre-approval and currently working with an agent and looking in Orlando but with inventory, interest rates, and prices we're having a hard time finding "a good deal".  We committed to this area because we're somewhat familiar with it.  But now I'm second guessing if this is still a good location.  So I'm just wondering if anyone has any advice on if this would still be a good location for us, starting out, or if we should maybe start looking in to other markets.  Any advice is appreciated!

 Hi @Audi Pine! I would be curious about which communities your agent has directed you to so far. It's true that the well known vacation rental communities (Championsgate, Windsor at Westside, et al) have higher HOAs but they also have extensive amenities which will drive higher rates for a well-themed and decorated home. Happy to give you some feedback on performance on the various communities and home types, so you can give your realtor some parameters to assist with the search. Needless to say, Hurricane Ian has passed through since your original post, so everything may take a bit longer and it's a dynamic market.

Quote from @Dom Radcliffe:

Hello everyone,

I purchased a 5BR/5BA townhome with private pool in Davenport resort community for STR use and occasional personal vacation use. I am looking to self manage with a local team for ops/cleaning and some automation. I am assuming 75% occupancy at Average nightly rate of $275. I am getting a close to $1200 cash flow with 22% COC after accounting for fees and expenses. On a slightly conservative side, 70% occupancy at rate of $250 would produce a close to $450 cash flow per month with 8% COC. Using Pricelabs Comps and enemy method for 30 properties around, I have noticed similar rentals averaging $280-$300 per night (median, rather than mean) with 70-80% occupancy.

If it helps, my goal is to generate enough income so that property pays for itself. I am not looking to make a profit utilizing cashflow. I am buying and holding. 

I have two questions, and please feel free to ask any further questions regarding this situation. I can be specific with more details too.

1. Is this a reasonable strategy and do the numbers look okay?

2. Tax question: Assuming that annual gross revenue generated is $70,000. Annual expenses including mortgage/interest/op expenses is $60,000. When its time to file federal taxes, I am assuming I need to pay Uncle Sam around 20-30% of annual gross revenue, right? That is about $20,000 in taxes. So, effectively, I am actually -$10,000 in deficit when its all said and done! Or is there something else to this equation that I am missing?

This is my first experience with any RE investing. Thank you for reading and I look forward to your expert guidance and suggestions.

@Dom Radcliffe congrats on doing a fair amount of research as a first time investor. @Shawn McCormick is spot on with the pricing strategy. It may take your home awhile to "ramp up" and this is something we always explain to our new homeowners. The important thing is to establish some (hopefully positive) reviews and momentum during the first months of your listing. Price too high, and your home will not only sit empty much of the time, but it will drop to the lower end of the rankings on Airbnb and the other channels.

Also, your pricing will depend on additional factors...which resort in Davenport? What are the amenities? Does it have a pool? Rear neighbors or no rear neighbors? Most importantly, how is the home themed and decorated? One thing to consider is that s/f pool homes will often be priced quite low esp. in slow season. This means in order for your townhome to compete and achieve your goals, it has to be unique.

Good luck and enjoy your new home!

Quote from @Dave Tov:

From Canada and looking loan options to purchase STR in Orlando area. I have a house with mortgage in Canada so I am concerned I may not be approved for a second mortgage despite it being a rental. Can anyone give me some advice about loan types in my circumstance? I know DSCR is an option but that comes with higher loan rates and more down payment required (think I am correct in that assumption). Thanks.

I am not an accountant, but happy to refer you to our accounting firm - they specialize in STR and do business with an enormous number of overseas investors, especially Canadians. Shoot me a message and I'll introduce you! 

Will do!

Hi @Jared Romaine! I would add that this also depends on your family’s personal preference since you will be using the home. Windsor Hills and Emerald Island are older resorts, closer to Disney and quieter with more green space. You may be able to save on the purchase price if you find a home in need of decorating. 

Championsgate, Windsor at Westside, Solara etc. are further from Disney and have more extensive resort amenities. Homes are closer together and they get quite lively, they can feel crowded at peak times. But also very popular it depends on your preference. 

Feel free to reach out, we can send you a map and answer any questions!

Every market is different I suppose. However in the very competitive Disney/Orlando market, a washer and dryer is a MUST. Especially for a one bedroom, your will have stiff competition among condos AND hotel rooms. You need to leave no stone unturned with decor and amenities.

Quote from @Ryan Moyer:

Linda where are you getting your estimates on the electric cost being thousands of dollars just for the heat?

We have a pool in Orlando and we run it every day year round and the highest our electric bill has ever been was $750, and that was for everything (9br house included), not just the pool heat.

Granted it's a fairly small pool, how large is your pool?

That sounds exactly right. We see bills up to about $800 for a 9br. Our homeowners from up north tend to be a bit shocked, but it can be expensive to cool and operate a large home in tropical Florida!

@Arthur Chu all great responses above. I would emphasize the importance of having your home stand out. There's theming, and there is THEMING. We have seen our highly themed homes (we are talking bat caves with LED lighting, Aladdin rooms with "floating" magic carpet beds, etc.) book for literally twice the nightly rate of a home that simply has cute themed wallpaper and pillows. You'll find a wide range of decorators in Orlando, some are extremely creative and on top of the trends while others produce more "cookie cutter" homes. Predictably, top decorators are more expensive and there may be a wait for their services, but this will pay off in my opinion.

Regarding calculating rates and occupancy for a specific home, we use Key Data Dashboard, a third-party software that pulls directly from booking data. It's far more reliable than AirDNA. Happy to help with the numbers! 

@David B West hopefully your "accidental STR purchase" will turn into a happy accident! happy to crunch the numbers and run some reports (revenue, occupancy, expenses) to help you quickly assess what you've got! On a personal note, my family and I live in the Disney surrounding area and can share thoughts on schools, neighborhoods, and what it's like to raise a family around here :) Send me a direct message and let's chat.