Orlando? How can out state break into that market?

[Craig Oram]

It seems Orlando is hot right now.  Don't see any major turnkeys in the area.  How can an OOS investor get in on this market and keep risks low and returns high?

[Wendy Schultz]

@Courtney Bass We are just in the process of buying so I can't give you a true evaluation yet. I do believe that there are good returns to make there though and agree that the closer the better. We are property managers for short term rentals so we do all our own bookings centralized for all the properties we own and manage and then partner with boots on the ground cleaning, maintenance, etc. We also charge 20% of gross but I like to be on the lesser side so that the owner makes more and we also strive to get the highest nightly rate that we can for our owners and optimize their properties for max ROI so 20% is sufficient for us at this point. I am also a property owner and investor so I know how big a hit property management that can be. I paid 48% at our in house rental manager at a condo! We never made a dime. Ridiculous. That's how we got started on this crazy property management journey. Now our property and the properties of other owners who were fed up make good returns. Clearly not all property management is created equal.

I tell my owners that I don't like to compete on price or be the cheapest in town. That's a losing battle. We want to be unique enough that  visitors will pick our property on how beautiful or cool it is rather than it's the least expensive. I've noticed that almost all the properties look the same with deep reds and golds when light and bright interiors is what's popular now. We will be doing theme houses and/or brightening up the interiors a ton on whichever places we choose. Also, I'd rather have 50% occupancy with $60,000 gross than 70% occupancy with $60,000 gross. Less wear and tear on the property, less maintenance requests, etc. 

We have the advantage of seeing side by side comparisons of the properties we manage and I tell my owners that the more updated properties go first and the less updated properties go last (shouldn't be a surprise) but it is also interesting to see that the updated properties will have an advantage over less updated properties even if the less updated property has an advantage such as a water view. They tend to make more gross as well. It's been fascinating to see. 

If they go with a property manager, be sure that they are actively marketing their property rather than just putting it on their website. Also, work with someone who offers a consultative approach and can optimize the property.