All Forum Posts by: Erica Muller

Hi Eric, 

Keith is absolutely right. To elaborate on that and bring up another point, if you don't get the email addresses and past guest info of everyone who has stayed at the home you are also not getting the full details that should be included with the sale. Any time a vacation rental is sold turn key (with booking and marketing) it should be a situation where they can turn everything over to you so that with or without management you can begin marketing the home. If you have to start from scratch (build your own website, online listing etc) than it's not turn key. It's also important that you research the reviews on that home before buying it. It could have terrible reviews online and those will transfer to you and affect your ability to rent it. One last important point is that IF the bookings belong to management, find out if they are retail or wholesale bookings. That's huge. Most management companies put wholesale bookings in place and they are half the price of the retail value. It's not even worth taking them. That's a ton of wear and tear on your home and you won't even net any money from it. 

Here is a link to a good blog post to read about interviewing VR management companies: http://www.thepinkflamingo.info/10-questions-you-m...

Good luck! 

Hi Chad! Congrats on this decision. Vacation rentals are a lot of fun to own and use. My biggest thing I would tell you is do the right research before you buy. I just taught a workshop on this in Canada last month and I was shocked to see how many people don't even know how to research vacation rentals. I'm going to suggest a website to you, it's called AirDNA.com. They charge a fee but you can get all the data on the average vacation rental incomes per area that you want to invest in. Once you have that data, you'll want to use a spreadsheet and factor that in with the other expenses such as liability insurance, management, cleaning etc. There are about 10 additional expenses associated with owning a vacation rental that you won't see on a traditional rental. I just urge you not to buy the first thing you fall in love with and make sure that it's a good move financially also. Use Airbnb and VRBO to see what rates your potential competition is charging and check their calendars to see how often they're booked.  Most people can be guaranteed at least 12 weeks no matter where they buy because of holidays. Above and beyond that is up to you or the manager you hire. There is definitely a strategy to it. 

Good luck! 

Hi Andy and Meghan, 

Just be aware that Cape Coral isn't vacation rental friendly in terms of the county or city allowing it everywhere. It's important to make sure whatever you buy is legally allowed to be rented short term. I have been seeing a lot of people getting shut down in Cape Coral for renting their home as a vacation rental. 

As with any coastal vacation rental in Florida, it's always MUCH slower in the summer. Florida is seasonal and our big season is Oct-April. After that on the coast it's incredibly slow. The only exception is Orlando which is year round because of Disney. You will most likely need to cut your rates in the summer. 

If the income year round is important to you, I would recommend considering a more active part of Florida. If you love the coast, maybe try Miami or Ft. Lauderdale because they are busier than the West Coast in the summer (but also much more expensive). 

Good luck! 

Hi Luke! 

Regarding insurance, you must have this. Not regular insurance but liability insurance which is an addenda added to your regular policy typically costing between $500-800 a year depending on the size and location of your home. The reason you MUST have this is because if someone gets hurt in your home they will sue you, the HOA and the property manager. Because of this if an HOA finds out you don't have a liability policy you will get fined and/or banned from renting short term. Also management companies will NOT take your home into their program without it. This is basic knowledge in the vacation rental industry no matter where in the country you invest.

Other expenses will be your licensing from the county/state in order to legally rent short term. This is usually about $150 a year in Florida. You will need to look into it where ever you buy. In Orlando what most people also pay for is property management. They book the home for you and oversee it. They typically charge about $120 per month as well as take a commission on the bookings they put in place but not on the ones you do (owner bookings). 

You will also pay a lot more for things like pool heat (if you have a pool) because renters use this like crazy when it's not hot out. 

If you get a single family home, try to get a South facing lot as this cuts down on pool heating expenses. 

Remember to factor in things like credit card fees (every time someone books you get charged), marketing expenses for listing online and creating your property website (if you plan to do it yourself) and things that typically need to be replaced such as light bulbs and little odds and ends. Believe it or not, you will go through a ton of these little things which adds up so make sure you factor in at least one month of income for reserves. 

As for furnishings, in my experience dealing with vacation rentals, a two-three bedroom condo (furnished to rental ready standards) will run you about 15K. On a single family home you're looking at about 25K for a 3-4 bedroom. 

My advice is to buy one already furnished with bookings already in place so it's turnkey. All you have to do is take it over. 

Good luck :)