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Updated almost 2 years ago, 03/04/2023
Selling long term rentals to acquire a short term vacation rental.
My family and I love going to Florida off Highway 30A and have been dreaming of owning a place here for years. I am considering selling my rentals in Arkansas to be able to buy a vacation rental where we love to go so much. I have zero experience with short term rentals or buying beach properties. Any help/advice would be GREATLY APPRECIATED.
I don’t need this property to cash flow however this is a lot larger investment than I am use to and would have to have it paying for itself or very close to it. Again any and all help, advice, real world numbers, experiences, anything would be appreciated!
#5 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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#5 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
- Investor
- Austin, TX
Now is not the time to put your eggs in the STR basket, especially with no experience. It is nothing like a LTR, if it doesn't make you 3x what a LTR will make you don't even consider it.
@Eliott Elias Agreed!
Thanks for the quick response! Why do you say not to do it right now?
thanks again!
Levi - You made it very clear in your original post that you don't need this property to cash flow and that you are looking to buy a home for your family to enjoy, where the short term rental income offsets some/all of the overhead.
You have a lot to learn about short term rental investing, but the other posters missed your point here.
A short term rental is a fantastic option for doing exactly what you are seeking to do.
I recommend you spend the next couple of months here on the forums to learn as much as you can. There is a section here dedicated to short term rentals that is LOADED with great information (look to the left of your browser, the section is titled "Short-Term & Vacation Rental Discussions"
You'll learn pretty quick that by getting into the STR game you are getting into the hospitality business. Very different than being a LTR landlord. But if you hire a property manager it can be pretty passive (never 100% passive, but close).
Good morning @Levi Crawford. We live in Franklin, TN but are active in the panhandle when it comes to real estate. I would get involved with some real estate groups down there, even if it is a Facebook group. Just my opinion - 30A is very nice but not a good investment from a dollar perspective. Great place if you want to recovery most of your costs and use it for a couple week with the family. When is the next time you are going down to the panhandle? I am happy to introduce you to some resources.
Quote from @Chris Picciurro:
Good morning @Levi Crawford. We live in Franklin, TN but are active in the panhandle when it comes to real estate. I would get involved with some real estate groups down there, even if it is a Facebook group. Just my opinion - 30A is very nice but not a good investment from a dollar perspective. Great place if you want to recovery most of your costs and use it for a couple week with the family. When is the next time you are going down to the panhandle? I am happy to introduce you to some resources.
I’m here now for the next two weeks. Thank you!
Hey Levi,
First take your time and keep your LTRs for now. I would suggest taking a longer vacation down to 30A and identify the area that you would want to have a vacation home or condo. I could be wrong, but I understand that this is a place that you and your family are wanting to purchase and use and are looking for STR income to offset the price? If this is the case, I would suggest you explore options that fit your family needs. Also, you want to understand the current market supply. (I suggest using Airdna) If you purchase a studio or 1 bedroom then you not only are competing with other vacation rentals, but hotels as well. In PCB the majority of rentals are 2 bedroom so that is where there is the most competition during shoulder and slow periods. I would look at 3 bedrooms on up and see what makes sense as a possibility. I would hate to see you sell your LTRs to get into an STR especially because you would lose out on that income you are currently receiving. Not sure what others think here, but there were a lot of people that bought STRs in 2021, 2022 based on pumped up revenue due to C%vid and now many are seeing much lower revenue. There should be some opportunities to purchase at better prices down the road, but that is my opinion and there are a lot more smarter people on the Real Estate side of things here on BP.
Quote from @Levi Crawford:
My family and I love going to Florida off Highway 30A and have been dreaming of owning a place here for years. I am considering selling my rentals in Arkansas to be able to buy a vacation rental where we love to go so much. I have zero experience with short term rentals or buying beach properties. Any help/advice would be GREATLY APPRECIATED.
I don’t need this property to cash flow however this is a lot larger investment than I am use to and would have to have it paying for itself or very close to it. Again any and all help, advice, real world numbers, experiences, anything would be appreciated!
I'm in the Panhandle and would love to meet with you and offer any assistance you might need. DM me to chat about details!
Quote from @Levi Crawford:
My family and I love going to Florida off Highway 30A and have been dreaming of owning a place here for years. I am considering selling my rentals in Arkansas to be able to buy a vacation rental where we love to go so much. I have zero experience with short term rentals or buying beach properties. Any help/advice would be GREATLY APPRECIATED.
I don’t need this property to cash flow however this is a lot larger investment than I am use to and would have to have it paying for itself or very close to it. Again any and all help, advice, real world numbers, experiences, anything would be appreciated!
Hi Levi, I live on 30A. There are pockets of 30A that are offering huge appreciation and growth in the upcoming years. I think the west side of 30A or Inlet Beach has a lot of potential since it's underdeveloped compared to the east side and cheaper to buy in for the same property. Let's connect and go over a few scenarios that may make a great long term investment.
Our vacation rentals (mine as well as my clients) are all performing extremely well and I recommend proceeding with acquiring one as long as the location can support it - demand, rental pricing, year round versus seasonal business. We have a model whereby we self-manage and provide guests with a seamless experience (don't mess with someone's vacation!). The first step is to ensure that the location is right for this investment type and then to buy within valuation. Remember that these need to be fully furnished with a housekeeping surplus so if not acquiring a current vacation property, this expense and timeline will need to be added to your analysis. I've found that people will cut back on personal expenses, forgo eating out and buying luxuary items but going on vacation is something they're just not willing to miss. Ratings will make you or break you so don't go in short on cash...you gotta get it right to get the ROI you will expect and deserve.
Best...
First, you are balancing your life goals (spend more time with your family in an area that you love) with your investment goals (you simply want a property that would come close to paying for itself).
It should be doable to achieve both of these goals. During your search, make sure you find an investor-friendly realtor AND a reputable property manager specializing in vacation rentals who can assist with projections and educate you during the process. Have them help you crunch the numbers and take all your expenses into account, including HOA dues, taxes, etc. Make sure they take seasonality into account. If possible, plan your stays during the slower booking seasons so you won't compromise revenue too much.
Ask about the long term trends for the area. Are rates and occupancy holding steady? Once you are armed with all the right information to make a solid decision, go for it! If you can afford it, making family memories in a place you love is most important.
- Alice Horn
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