Turn my duplex into a vacation rental?

Question

Good morning everyone, I have listened to the podcasts on the vacation homes and read a few posts from members doing vacation rentals. I currently have a duplex in Pensacola, FL in the heart of the city about 25 minutes from the beach and 12 minutes to both universities, mall and airport. Here are the facts broken down: Each duplex is a 2b/1b 800sqft. 2 parking spaces. Mortgage is $663 monthly. One unit rented out for $725 (which covers mortgage) The other is about to be vacant. I was going to leave one tenant on a yearly lease and vacation rent the other side. 1. Rents are $70-$80 a night in the current area. 2. Have a friend around the corner from the property that will clean and help manage. If rented 13 nights a month @ $70 it will equal what I would make with someone in their with a monthly lease. ( that's including monthly water, electricity, internet) From what I can see it looks like a positive cash flow. My questions are as follows: 1. Do you think it is to far from the beach to be a vacation rental? 2. Is it worth investing in beds, sofa, towels, sheets, lamps, tables, etc. and a programmable lock to turn this into a vacation rental? How much on average does it take to set up the home with all needed supplies? 3. Is a $25-$35 cleaning fee to much to ask per stay. ( unless staying multiple nights make it a flat $25-$35) 4. Someone stated that you have to pay monthly taxes as it is not a full time rental. (How does this work) From those that have done this before what are your thoughts/ advice? Thanks!

Phillip Lee · Answer

William Allen That is good to know. My husband and I were trying to start wholesaling and we are doing lease purchases now. I have heard some good things about the training. Just haven't seen anyone that had done it. If it's that good, will definitely look into it.

William Allen · Answer

@Wendy Cai, I'm not in the vacation rental space but Gulf Breeze is a popular gateway to the beach. As I said before, I would suggest looking for VRBOs or AirBnBs that are in the close proximity of those and seeing what they charge and how full they are. Make sure the HOA in the condo complex allows for short term rentals as well. Yes, I have been through John's training and it's great. I'm a wholesaler so negotiating with sellers is what we do every day, the training was worth every dollar to me. If you are dealing with sellers regularly or doing your own marketing campaign I think it would be highly beneficial. Without knowing exactly what you are doing it's hard to say but if you need real estate sales training I would certainly recommend him.

Phillip Lee · Answer

William Allen I have a question for you. One on topic one off topic lol. Do you think I condo in gulf breeze 2-3 minutes to Oriole beach is better suited for rental vacations? Also, I saw that your company was on the website for doing John Martinez training. Was that training beneficial and worth the money?

Phillip Lee · Answer

William Allen I have a question for you. One on topic one off topic lol. Do you think I condo in gulf breeze 2-3 minutes to Oriole beach is better suited for rental vacations? Also, I saw that your company was on the website for doing John Martinez training. Was that training beneficial and worth the money?

Phillip Lee · Answer

Marian Smith Those are some good ideas as well. Will have to shop around and see what deals there are. Still debating as the duplex is kinda tucked into a neighborhood but right off the major interstate. I10. No walking to restaurants though...

Phillip Lee · Answer

William Allen I tried to look up past history but it doesn't show. I will have to investigate a little more and maybe do airdna or some site that tracks the metrics.

William Allen · Answer

it sounds like the rent is higher than you thought and with them both being booked up sounds like a good niche. Keep in mind it is summer right now so also see if you can go back and look at their history. Not sure if that's possible or not but I'd wonder about vacancy on slower months.

Phillip Lee · Answer

@William AllenThat is a solid point. I just looked and there are only 2 houses listed in that area. Rents were $80-$85 for the same criteria that I have. They are both booked 2-3 months out. Not sure if it will be a good niche or if I should just stick with traditional 1 year leases.

Marian Smith · Answer

Does in the heart of the city mean walk to restaurants...safely? Should be worth a summer's trial. Might be able to pick up some trendy ikea type furnishings from graduating students...maybe a nice 4 year old memory foam bed. Framed local art scenes and some eclectic furniture, large pots or whatever to be the opposite of a holiday inn express (my hubands fav), an outdoor bistro set (for smokers) and maybe a bbq grill. I have not done this but one trend from what I have seen, is to provide an authentic, local experience vs the usual. And spotless. You probably really need attention to detail as user recommendations have got to be paramount in this line of business.

William Allen · Answer

To answer number 4, you will collect that tax from the renter to cover it so it shouldn't affect your bottom line. My recommendation is to look on VRBO and see if there are other rentals around your duplex. If there are, look at their rates and calendar to see how full it is. If there are none around you there could be a reason for that or an opportunity for you. The workload will be high if you are managing it yourself from a distance too. If I was taking this risk and up front cost I would want to ensure my unit made close to twice as much as a vacation rental than it does as a long term rental.