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First short term rental!
Hello all,
After much analysis paralysis on my part, my girlfriend and I have just purchased our first investment property. To mitigate risk, we decided to house hack a 3/2 home with a detached 1/1 MIL suite to rent. We are set to close late February, and we're getting more excited for our new journey by the day! We are minutes from Panama City Beach, FL and have decided to use the MIL suite as a STR, with a LTR as a plan B. The property is mostly turnkey, with the exception of furnishings and we really want to have a game plan down to hit the ground running after we close. Where should we focus our efforts in the meantime? Should we form a legal entity? What kind of insurance should we carry on a STR? Which platforms are best? So many newbie questions....
@Bryan Crawford
Airbnb and VRBO tends to be the biggest two . I'd start by making a list of furniture you'll need, networking with a good local photographer, finding a cleaner/handyman, and starting to research some Airbnb hosting software that is out there. Also make sure to check with your local city regarding STR regulation and if you need permits.
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Real Estate Agent Ohio (#2020001277)
- 614-363-2787
- https://marc.reafcorealestate.com/
- [email protected]
@Marc Rice Thank you
@Bryan Crawford You definitely need to form a legal entity and exit plan. Not to rain on your parade but I have seen it happen all too often when things don't work out for a couple what the property gets stuck in a custody battle. Hear me out! I know you guys love each other and it will never happen to you but it's good practice regardless. If you guys were married the courts would be there to ensure a split of the assets should you guys not be able to continue life together, but without being married they will not intervene nearly as readily, and what about the event of someone's untimely passing? Then families and heirs get involved along with banks and probate.
I always tell people "good documents make good partners and let's draw up those documents while we are still in love" and this advice has never hurt me!
Agree that VRBO & Airbnb will cover most of your bases for sourcing travelers. Try to get pro photos, look up SEO optimization for listing keywords, do some research on comps in the area for pricing throughout the year paying attention to seasonal & holiday shifts
The 3 pillars of success for every vacation rental property: 1) Location (which sounds like is already picked). Hopefully you're within striking distance of the beach since PCB that's a big deal. 2) Sleeping capacity. What's the most amount of people you can comfortably get in there? More heads in beds, the higher rate you can charge and 3) Interior Design & Amenities. Maybe go with a beach theme, make it feel like vacation. Good luck sir!
I am a local in PCB and specialize in short term rentals. Will be happy to get you connected to all the right people to get you rolling!
Originally posted by @Shannon Robnett:@Bryan Crawford You definitely need to form a legal entity and exit plan. Not to rain on your parade but I have seen it happen all too often when things don't work out for a couple what the property gets stuck in a custody battle. Hear me out! I know you guys love each other and it will never happen to you but it's good practice regardless. If you guys were married the courts would be there to ensure a split of the assets should you guys not be able to continue life together, but without being married they will not intervene nearly as readily, and what about the event of someone's untimely passing? Then families and heirs get involved along with banks and probate.
I always tell people "good documents make good partners and let's draw up those documents while we are still in love" and this advice has never hurt me!
I definitely agree with this. The 250 dollars to have an attorney file an entity and draw up a partnership document is worth it AND ot forces you to think of business things you probably haven't yet.
It's always best to think of these as a way to ensure that IF things blow up, cooler heads though of a fair exit strategy.
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Real Estate Agent Florida (#SL3364820)
- 727-288-7325
- https://danmacrealtor.com/
- [email protected]
@Shannon Robnett
@Dan Maciejewski
Definitely something to think about and look into. Thank you for the wisdom!
Thank you for the advice! @William Beck
Originally posted by @Bryan Crawford:What kind of insurance should we carry on a STR?
Whomever you end up getting insurance with, be sure to check the insurance provider/underwriter requirements for minimum stay.
Congratulations, & best of luck!
@Bryan Crawford we run an Airbnb in Portland, OR. A few notes from experience, it’s a lot of work and the cash flow is not super consistent. We converted on of outs to a Furnished short term rental which has worked out really well. So something to consider. They are sites like https://www.furnishedfinder.com where you can list rentals.
Photos
If you go the Airbnb/VRBO route I don’t think I just need any extra software if you’re starting out as the websites/apps work really well. Also, after you get a few bookings Airbnb generally offers photography for a cheap subsidized price and the quality is pretty high.
Bedding
Invest in a decent mattress and pillows. You would be surprised how often guests comment on this! We got this one from Amazon and have gotten great guest feedback on it. Olee Sleep 13 inch Galaxy Hybrid Gel Infused Memory Foam and Pocket Spring Mattress (Full) https://www.amazon.com/dp/B010GO33LW/ref=cm_sw_r_cp_api_glc_fabc_o37.FbWGGS3BV
Insurance
You will need short term rental insurance and for liability a lot of mortgages won't let you transfer the property to an LLC so if that's the case study you can get an umbrella insurance policy to cover yourself.
@Jason Goretzki thanks! We’ve started getting insurance quotes this week
@Shona Lepis I like the furnished finder suggestion. That gives us yet another option if we need to pivot. And thanks for the bed suggestion also. I know how important that will be!
@Bryan Crawford
Congratulations!
And welcome to the neighborhood. My wife and I are over by Deer Lake State Park on 30A.
We are looking to get into other investments down here now that we are full-time residents.
We moved into our previous investment, and plan to lease it for our next move. Then we'll have another investment, and so on.
I think what's scary or intimidating about the local market is it is highly competitive, there's tons of cash offers, price-point is high, and there is low inventory. But that doesn't mean deals don't exist!
I saw a meet up for real estate investors posted. It's in Niceville. Could be a good start. It looks like they meet monthly.
@David A Lisowski
Congratulations to you as well!
We have been attending a meetup in PCB on the first Wednesday of every month at Fishale’s. You guys should definitely check it out! I’ve been wanting to visit the one in Niceville, but my current work schedule just will not cooperate with me!
@Bryan Crawford
Oh Awesome. I'm glad I mentioned it. I'll have to check it out. What's the usual time?
That's much closer for me
@David A Lisowski 6pm every first Wednesday
@David A Lisowski 6pm every first Wednesday
@Bryan Crawford
Congrats on the property. Don't stress too much or try to be all things to all people. We've had our STR rental for 4 years now—it's mainly just a summer rental at the beach in Delaware. We only have it listed on VRBO and have had good success with that platform. VRBO also offers a $1M liability insurance if booked on their platform. I did just pick up an umbrella policy this year to protect myself because we were renting it off platform in the off season.
Our biggest win was finding a phenomenal local cleaning and handyman team. They have my back and keep a close eye on the property.
@Darrell Negley Thanks for the encouragement. I tend to get caught up in wanting everything to be perfect from the start, even when I know it’s totally unrealistic. I appreciate the info!
@Bryan Crawford
- Furnish your place using STR best practices (make attractive and no clutter)
- Get STR insurance (proper or travelers are my recommended)
- Automate checking (use a keypad)
- Follow airbnbs prompts for info, house manual, photos, etc. Using airbnbs photographer will help some on the SEO but they don’t take the best pictures ... it’s a good place to start tho
- Don’t use airbnbs dynamic pricing, you’ll lose money. Either do it manually or use tools like Pricelabs
- There is a TON of info in these forums, read through them. I also like the STR success stories podcast by @JulianSage
Good luck!
@Bryan Crawford congrats on pulling the trigger! You'll have to fill me in at the next meetup! I usually get most of my furnishings from the Facebook marketplace. We have gotten amazing deals on there and it's a good way to get started on the cheap. For insurance in this area, STRs are usually an additional $50 to a premium. If it's more than that reach out to Holloman or Affordable Home Insurance. Also start with Airbnb and as you build up reviews you can try out listing across all the platforms, but in PC about 90%+ of bookings come from Airbnb so it's best to build reviews there first. No LLC necessary, between being highly leveraged with a new purchase, having homeowners insurance with STR coverage, and the Airbnb host guarantee you will be in good shape in any worst-case scenario.
@Bryan Crawford I look forward to seeing you at my Niceville meetup. @Blake Dailey's meetup in PCB is also a fantastic event that I highly recommend!
I'll echo the sentiments above -- keep it simple and setup your systems early. Personally, I tested my systems on a few family members and friends with some test bookings up front. Personally, I use IGMS and Pricelabs as my main two systems.
Between AirBnB and VRBO, you can crush it with both. It seems like whichever one you start getting momentum first will be your bread and butter. Where I own, there are people who are exclusively AirBnB and others are exclusively VRBO with similar performance.
You have a great network of support within BP, so continue to utilize it to the max extent~
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Real Estate Agent
- eXp Realty
Bryan, these are all great questions and there has been some great recommendations already provided. I would be happy to connect with you to share tools we use to manage short term rentals that may help you get started as well as companies we use for insurance etc. Feel free to shoot me a DM and connect.
@Sofia Sharkey Thank you for the helpful info on insurance and pricing! The forums ARE a wealth of information
@Blake Dailey Thanks for the kind words! We’re definitely excited! We’ve already been scouring marketplace, Amazon, and others. And thank you for the insurance leads...affordable is one we’ve already been in contact with. We’ll definitely have to catch up at next month’s meetup!