Urgent Help needed navigating Investment Decisions for My Orlando Property

[Maxwell Banton]

Hey everyone! Really need your advice and a big thanks to those who weighed in on this previously. After weighing all my options I have more detailed information. Quick backstory: I ventured into Airbnb in Orlando with a 5 bed, 3 bath place aimed at Disney-goers. Last year, I ended up $12k short. It wasn't about lack of bookings but rather the rates were lower than my initial projections. Come November, I shifted gears towards long-term rentals. Got some interest, but offers were either too low or applicants didn't qualify. Opting for a lower rental price would mean a yearly loss of about $6k-$8k, which oddly seems more appealing than continuing with Airbnb.

I'm now listed the property. At the asking price, I'd just about cover my mortgage. However, realtors believe it's worth $25k less than my asking price, which means I'd still be $25k short post-sale. Another path is to double down, make the place stand out, and stick with Airbnb, hoping for a return on investment.

It's a tough call for a newbie investor like me. What do you think? Also, could anyone ballpark how much I might need to invest to make my Airbnb unique? Appreciate all your insights!

(My current listing)

https://www.airbnb.com.sg/hosting/listings/editor/7920496580...

[Chris Rich]

Hey Maxwell, just FYI, the link wouldn't work for me.

As for what to do... have you discussed any of this with a real estate experienced CPA? I can tell you I've had quite a few owners calling me in the last few months looking to transition their STR into LTR for the same reason, and like you, many are stuck. There are a ton of houses for sale in the Disney area and based off competition I think a lot of people are going to sell at a loss just to get out from under the house.

I don't think any of the options are good, but have you thought about what the plan is for 3 to 5 years from now? And is the house currently themed?  I think you either sell or go one of two routes.

1) Plan to hold for at least 5 years.  Turn into a LTR and then Cost Seg the house so you can get some funds as reserves.  Then hope the rental losses help with it comes time for tax season.

2) Double down on the STR and theme the house (if it isn't already). There is so much competition in the area and the well-done themed houses generally command a higher ADR. This is an example of what I am talking about - https://www.homethemeorlando.com/ .  It's not cheap to do ($10-15K per room), but Marc Younger (owner of Home Theme) has quite a few themed STRs in the Disney area and makes a killing. 

Hope this helps.  Good luck!