All Forum Posts by: Dan Maciejewski

Pinellas is in the "Tampa Bay" area and is very in-demand for vacationers. It also has the benefot of being (for now) more budget friendly that some other areas. Of course, that depends on your budget, but there are high ROI properties to be had in many price points.

Clearwater and Clearwater Beach are limited to 30 day minimums.  

Treasure Island, Madeira Beach, and other beach towns will all have their own regulations that are not really investor-friendly, as well, so be careful that you work with someone that deals with vacation / short term rentals as their business!

It can be both.  Some just use their agencies and some will want to choose their place and save, or use more than, their per diem.  

I'm in Pinellas, so I can be a little biased, but my investments are all here.  

Sarasota can be rough -- the county itself is 30 day minimum except on the barrier islands Siesta Key, Casey Key and Manasota Key.

Orlando can be rough because there is so much competition -- you will need to stand head and shoulders above your competitors, which is hard when all the properties are the same purpose-built vacation homes. 

There are plenty of areas in Pinellas that still make sense, although you do need to know where to look. You can make money in almost everywhere it's allowed, but there are definitely higher ROI areas!

I've only sold one or two long term rentals in the last few years -- the rents will need to be unaffordable for the median income to support many of the purchase prices here -- the median salary is shooting up, but a lot of the new people are renting new, luxury apartments or executive homes or condos.

You'll definitely need to talk to some brokers and get a quote for an actual house in your area.  The location matters.  In my area, the age of the roof is a big deal for insurers.  
The price of the house will also matter a lot -- you are looking at replacement cost of at least what you paid for the house.

BUT, as everyone has said, you need to actually ask insurers in the area you are looking at.

 I was just going to suggest this.  Talk to the sales department at a few of those places and see if you can find someone that focuses on this segment.  Not all will, but there should be some smart sales person that does.  Also check furnished finders -- see if there are a few mid-term places near you.

As @Joe Villeneuve said above, you have to define "overpay." 

Some people think overpaying is paying more than someone else is willing to pay.  You can't buy anything others want to buy if that's your opinion, so in that context, you have to 'overpay.'

Some people think overpaying means paying more than asking price.  I have heard people say, "I would never pay more than asking price."  The real estate market is not a retail store.  Asking price is an invitation to negotiate, not shelf price on a can pf peas.

Some people think paying more than appraised value is overpaying.  An appraisal is a tool used by banks to give them some sort of assurance that they are not overextended.  It's definitely not a determination of value.  I can talk about appraisals but this may not be the thread.

All of the above examples are times where it might be okay to "overpay."

A time it is not okay to overpay is when the numbers don't work for you.  Whatever your metrics and numbers are, you have to buy within that box.  You can never break your metrics to force a deal to work.  There are like 37 measures to judge an investment on, so not all investors will have the same needs, but whatever your metrics are, you have to make sure that the purchase fits.

 Some own, and some rent.  It does seem like a waste to leave your house(s) empty for most of the year, but that's life in a vacation market!  Some even have cars that they leave here so they can fly in/out with little stress.  Not everybody wants to be a landlord or deal with the hassle of renting out their vacation homes, and not everybody wants to bother buying.  

 Dunedin limits short term rentals to 90 days or 3 calendar months except in a very small zone near downtown.  Properties in that zone are selling very high compared to out of it.  Some people do well there renting to snowbirds, but a lot of people like you want to stay in the snowbird season -- usually Thanksgiving-ish through Easter-ish.

Yes, most vacationers do want to be near the beaches. The costal areas that allow STR / vacation rentals can have a very high ADR and occupancy.  The occupancy drop in Hillsborough isn't that much, though and people do seem to be doing fine there.

For your original question, I have a client in the sub-200k condo market, and I can tell you that not only are there slim pickings in both Hillsborough and Tampa, but finding one that allows STR is not easy. There are 2 in Clearwater that allow it (grandfathered in) that are around 200k and below, and a few all over the area -- not many that are really desirable for STR location-wise, though. The Clearwater ones don't have anyone selling, for obvious reasons! Everyone I've talked to in there wants to buy more!

As for a house in the sub-400 range, you should be grossing at least 65-75k per year in the right area, at least in Pinellas.  Hillsborough looks similar, but you'd have to talk to a PM to see about the ADR and occupancy.

Are you asking if you can put something on the MLS to see what interest it would get? If so, as long as you own it and have MLS access, technically yes -- but I would recommend against that. You would be wasting a lot of buyer's and agent's time and energy! If you don't own it, then no -- and if you don't have MLS access, I don't see anyone listing something that isn't actually for sale.

Or are you asking if you can run numbers on MLS listings? The answer to that is yes.

I suspect you're asking about seeing what a wholesale deal would get as an active listing? You just need to run more numbers until you're comfortable knowing (or estimating with a high degree of confidence) what the FMV is.

If you're purchasing in a year, you should start seriously looking after you have your funds in line -- POF and pre-approval if financing. I don't see the market shifting much in the next year. Small multifamily is moving very fast right now.

In the last 5 months:

Hillsborough Average days on market: 40
Hillsborough Median days on market: 13 (that means half of all sales were less than 13 days on market

In the last 3 months:

Pinellas Average days on market: 31
Pinellas Median days on market: 9 (half of all sales went under contract in less than 9 days)

If you're like me (and many people on this forum) you'll be looking all the time to: track cap rates overall and in certain areas, price movement, rent movement, etc. . . By the time you are ready to purchase, you'll have a much better plan, and idea of a great buy when you see it, and an idea of what the ARV will look like.

My advice is to run numbers on everything all the time!  Look all the time.  Estimate rents all the time.  Especially if you're out of area -- you need to learn rents and neighborhoods.  The more you research, the more likely you are to know an area when it comes up in 6 months.  You may say, "I know that area has very low rents," or, "I know that area can accommodate rents in a rehabbed place double what they are now!"