Best STR market south of Orlando?

Question

Hi all, just wanted to get some advice on where you all think is the best place to buy a STR in Florida from a cash flow perspective.  Preferably no farther north than Orlando.

Also, do the same concepts for buying a STR apply to a LTR? If an investor buys an a property with the goal of making it an STR, and decides he/she wants to make it a LTR, is that inefficient?

Josh Green · Answer

@Armand Dufrane

Hey Armand, I would recommend the Tampa Bay area for a lot of different reasons - but in general because it offers:

-high growth and appreciation projections

-two cities with many attractions and visitors

-mild seasonality, more stable income

-good cash flow, low acquisition cost generally

-exit strategies: not too uncommon to be able to buy a SFR and it still able to cash flow day 1 as a LTR.

There tend to be two sweet spots: sub $350k and the lux space (over $800k typically) that cash flow well here. Generally over 70-80% annual occupancy and like I said, a lot of flexibility as far as exit strategy.  To your question earlier: yes you will sacrifice a lot of cash flow if you buy a property intended as a STR and pivot to LTR.

John Underwood · Answer

If you buy beach front or very close in a tourist area you should never have to worry about an exit strategy into a LTR.

Shawn McCormick · Answer

You can use the 'find an agent' feature at the top of the page. If you search for related posts to short term rentals in Orlando, you will also find several agents that are active in this area.

Dalton Lauer · Answer

Hey Armand! If you're looking for an area that is still growing and has great STR potential then I would check out Pompano beach. Its just north of Fort Lauderdale and right below Boca Raton. People love it because it gives those laid back beach vibes without being too overwhelming with city life. Everything you could want is within walking distance or a short drive.

Matthew Tregoning · Answer

Some great locations have already been talked about here! I'll add in Cocoa Beach to the conversation. I think the Space Coast as a whole has a ton of room to grow and Cocoa Beach for the most part is a bit of an undiscovered STR location and there isn't a whole lot of fierce competition.

As for STR to LTR. I think the more reasonable plan would be STR to mid-term rental. Mid-term rental would need to be marketed towards corporate travelers, travel nurses, or snow birds.

Oscar Guzman · Answer

I am currently considering strategy options (thinking either, STR, LTR shared living, or multi family) my potential second deal in the Orlando / Space Coast area and found this pretty helpful! I have not yet started doing much research on STRs, but this just pushed me to go looking!

Any recommendations on RE agents that focus on STRs?

Shawn McCormick · Answer

@Armand Dufrane depending on where exactly your STR will be will help determine answers to your question. If you have beachside condo or an 8 bedroom near Disney will be much different. I focus on the Disney area and the homes here come already furnished and generally the future bookings will convey. The communities that I recommend are all within a 10 mile radius of Disney, are guard gated and fully amenitized, so they are built specifically for STR. There are plenty of smaller neighborhoods surrounding that allow STR or LTR that you could purchase if having a second exity strategy is important to you.

For your cash flow question, again depends on where you are and to what level your home stands out and what you offer that others can't/don't. As crowded as Orlando is with STR homes, we also have over 70 million people coming thru the city a year so even people not trying very hard are typically doing well. But if you do some homework, buy right and keep up the home and on your technology, you can do very well.

Switching from STR to LTR does seem inefficient, usually, you would go the other way to improve cash flow. However, having that as a plan is not a bad idea. When the pandemic hit, many STR owners turned them into LTR because travel halted and they just wanted to cover expenses at that point, others simply sold their units.

Best of luck to you.

Michael Baum · Answer

Hey @Armand Dufrane, I can't really comment on the south of Orlando positioning.

It is not inefficient to go from STR to LTR per se. If everything is copacetic for a vacation rental in a chosen area, then you move forward. You could possibly get a 10% down loan which is a win for a 2nd home loan. You will have all the expenses of setting up the property. Furniture, linens, kitchen, mattresses etc etc. That can get up there in cost, but there are many ways to keep it nice and not go broke.

If they just make a decision to move to LTR after that is done, then you will be out that initial cash outlay for setup.

Most people looking at STR's want to keep it a STR. The main reason to covert to a LTR would be if STR's get restricted or banned in the area you own.

I guess the bottom line is to make sure everything is in order for a STR and do it. Are you thinking you might get spooked by the work or self management?

Best STR market south of Orlando?

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