Luxury Vacation rental single-family home new construction
Developer · Clearwater, FL · Member since 2022 · 10 posts · 4 votes
Luxury Vacation rental single-family home new construction
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4yYou want a luxury vacation rental, but you don't know if it should be in a nice area???
Real estate is all about location.
You would probably be better off waiting for the market to cool, then buying something existing and fixing it up. I don't think it makes sense to build a brand new, luxury vacation rental when purchase prices and building costs are so high.
The DIY Landlord Book4.7243 Reviews
20 Replies
- 4yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Lot's of options when you start new @Artem Pustovar. I would look at having each bedroom with an ensuite bathrooms. Would be pretty cool for each bedroom to have it's own bathroom. Especially if you expect to get multi family visitors.
Frankly you never want a house to standout as completely different than the others in a neighborhood. Here is our home town there is a turn of the 19th century neighborhood with one square modern design house there. Sticks out like a sore thumb. I don't mean to build boring, but at least keep it in style with the rest.
- 4yDan SlaughterPro MemberDeveloper · GA · Member since 2019 · 74 posts · 42 votes
I started with finding the builder. Once I found the builder (and vetted him through multiple sources), he gave me a few options for floor plans. We modified the plans a bit to meet our needs then he was able to price it out.
We designed our house to allow for multiple families. 5BR/5.5BA, large bunk room for kids, 4 bedrooms each with their own full BR.
If you build a home like this, understand when you go to sell, this set up will not likely appeal for someone looking for a primary residence or as a long-term rental but that is market dependent.
- Investor · Nortnern Colorado · Member since 2020 · 170 posts · 132 votes4y
@Artem Pustovar from what I hear so far sounds like you've got a good plan. Make 100% certain that you are allowed to rent this as a short term rental given HOA and city code. Include a lockable owners closet for you and your cleaning team. You can design your house purpose built, but don't overlook the possibility it may need to be sold as a single-family home. You don't want only one exit strategy in a market that is not 100% tourist.
- Interior Decorator · Charlotte NC · Member since 2022 · 48 posts · 32 votes4y
From my experience, you'll do well renting larger homes and the en suite bathrooms are a plus, but not mandatory for secondary bedrooms. For a home that size, I would just make sure that you have at least 2 master suites that can both accommodate king beds to ensure 2 families can travel together. Additionally, you'll want to make sure the living and dining spaces for a home that large can comfortably fit the number of occupancies you expect. Figure a very large dining table and large sectional with ample seating options.
For the secondary bedrooms, expect at least one to be a youth bedroom with multiple bed arrangements. Also create an inviting outdoor space so the group can dine outdoors together and socialize.
Overall my advice would be to make sure you have larger bedrooms vs every bedroom having its own bathroom.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes4y
You want a luxury vacation rental, but you don't know if it should be in a nice area???
Real estate is all about location.
You would probably be better off waiting for the market to cool, then buying something existing and fixing it up. I don't think it makes sense to build a brand new, luxury vacation rental when purchase prices and building costs are so high.
The DIY Landlord Book4.7243 Reviews - Westerville, OH · Member since 2018 · 11 posts · 11 votes4y
Quote from @Nathan Gesner:
You want a luxury vacation rental, but you don't know if it should be in a nice area???
Real estate is all about location.
You would probably be better off waiting for the market to cool, then buying something existing and fixing it up. I don't think it makes sense to build a brand new, luxury vacation rental when purchase prices and building costs are so high.
Location Location Location. You'll want it to be close to whatever is drawing the guests to the area. If they're looking to spend $600 - $1,000+ per night and you're seeking quality bookings, you want to put yourself in the shoes of these folks.
They'll want a safe, clean area they feel comfortable in. A relatively short trip to the local attractions, stores, etc. Look at the other properties listed for rent at your desired price point, that's who you'll be competing with. The ones with the most bookings will be telling of what the target guest pool in that area wants.
To Nathan's point, do what you can to quantify the total cost to build in the area you're trying to compete in. Then look at all the listings to see what you could buy something similar for today. Factor in any likely rehab too. Unfortunately with all of the storm damage, it seems like contractors and materials will be in especially high demand. I'd look for homes with value adds, maybe a smaller house on a big lot. You could add to the existing home or have a new home with the original property also available.
- Developer · Clearwater, FL · Member since 2022 · 10 posts · 4 votes4y
Quote from @Erik Stenbakken:
@Artem Pustovar from what I hear so far sounds like you've got a good plan. Make 100% certain that you are allowed to rent this as a short term rental given HOA and city code. Include a lockable owners closet for you and your cleaning team. You can design your house purpose built, but don't overlook the possibility it may need to be sold as a single-family home. You don't want only one exit strategy in a market that is not 100% tourist.
thank you!
- Developer · Clearwater, FL · Member since 2022 · 10 posts · 4 votes4y
Quote from @Toni Escuder:
From my experience, you'll do well renting larger homes and the en suite bathrooms are a plus, but not mandatory for secondary bedrooms. For a home that size, I would just make sure that you have at least 2 master suites that can both accommodate king beds to ensure 2 families can travel together. Additionally, you'll want to make sure the living and dining spaces for a home that large can comfortably fit the number of occupancies you expect. Figure a very large dining table and large sectional with ample seating options.
For the secondary bedrooms, expect at least one to be a youth bedroom with multiple bed arrangements. Also create an inviting outdoor space so the group can dine outdoors together and socialize.
Overall my advice would be to make sure you have larger bedrooms vs every bedroom having its own bathroom.
thank you!
- Developer · Clearwater, FL · Member since 2022 · 10 posts · 4 votes4y
Quote from @Artem Pustovar:
Hi everyone. I am general contractor and thinking to build my first vacation rental.
I absolutely unexperienced in field of short rentals I have several questions.
1. Is it important you have vacation rental in Nice area and the house to be similar to houses in the neighborhood?
2. I'm thinking to build SFH with 5 to 6 bedroom with all en suite master bathrooms 2500-3000 sf AC area with 2 car attached garage, swimming pool, large covered rerar porch and nice entertaining outdoor space. Budget is 700 to 800k including land with final market value about 1 million. Projecting daily rent $600-$1000 a night.
3. Is there any special platforms or I can get for plans for the houses which is specially designed as vacation rentals?
4. Does it make sense to build 5- 6 bedroom home for the purpose? My opinion that I can comfortably accept larger groups of people and maximize price per night.
5. I'm trying to figure out the best type and size of house I have to build in terms of ROI.
thank you!
- Developer · Clearwater, FL · Member since 2022 · 10 posts · 4 votes4y
Quote from @Nathan Gesner:
You want a luxury vacation rental, but you don't know if it should be in a nice area???
Real estate is all about location.
You would probably be better off waiting for the market to cool, then buying something existing and fixing it up. I don't think it makes sense to build a brand new, luxury vacation rental when purchase prices and building costs are so high.
thank you!
- Developer · Clearwater, FL · Member since 2022 · 10 posts · 4 votes4y
Thank you guys everyone for your replies. If you have other advisors please feel free to comment.
- Developer · Clearwater, FL · Member since 2022 · 10 posts · 4 votes4y
The idea to build new instead of Remodel existing is to create something nice that will be much more attractive than old houses with low ceilings and without two or more in suite bedrooms. Second point is to avoid expensive and unexpected repairs. When full structure is new and as I don't plan to sell it and want to keep it nearest future it doesn't need any major maintenance at least 10-15 years. As I am general contractor I will save at least 25 to 30% compare with market value of what I'm going to build. When I'm saying Luxury it doesn't mean it is multi million dollar mansion. I think I will be able to maximize structure comfort ability for guests building you compare with Remodeling or adding to old one. Please correct me if I'm wrong. Nobody knows how market and if it will cool down. I see much better situation with prices for materials and leadtimes compare with one year ago and it become better as many national builders are canceling their huge subdivisions now. I consider locations within 10 minutes driving to Pinellas County Beaches only- that is my main attraction and it should be within minutes driving to stores and restaurants.
- 4yJosh GreenBusiness MemberRealtor · Tampa/St Pete/Clearwater/Bradenton · Member since 2020 · 397 posts · 353 votes
@Artem Pustovar
As others may have alluded to, there's no clear cut right or wrong. You have good points in building for yourself and like you said, if you can still get it within the right location then that's a big plus because typically new construction is rare in places like Pinellas County.
Some things to weigh in too is opportunity cost. There are opportunities on the market to buy into and quickly make a profitable STR in Pinellas vs the lead time to build. If you're building, then like you mentioned it's worth going the extra mile and do something more unique or experience-based to capture a higher ADR relative to the competition.
I'm happy to offer my opinion on whatever project you're considering in the areas around Tampa to go into more specific pros/cons anytime.
Impact Realty Tampa Bay.4.962 Reviews
Suncoast Vacation Homes4.959 Reviews - Developer · Clearwater, FL · Member since 2022 · 10 posts · 4 votes4y
If I buy now existing house I will pay market 100% value and need to pull out of pocket 20% down for old house which doesn't have any instant equity. Unless you can help me to find something for 70-80% of value If I build new I will earn instant equity 20-30% and will refinance it with 0 down as I usually do and will return all cash investments within 1st year of operation. Then cash flow only. Yes, to build I have to pull down about 30% of ARV but in 1 year I have brand new custom structure for 70-80% of ARV and I will return those 20-30% at the time of refinancing and will reinvest it to another project. I think it doesn't make sense to buy something existing unless for 70-80% of market value. But which idiot will sell it to me with 20-30% discount if house is in good condition? And major remodel option will take same time as new build. Additionally any old house which is not completely just fully renovated will need endless maintenance which pulls money out of pocket non stop.
- Developer · Clearwater, FL · Member since 2022 · 10 posts · 4 votes4y
Quote from @Josh Green:
@Artem Pustovar
As others may have alluded to, there's no clear cut right or wrong. You have good points in building for yourself and like you said, if you can still get it within the right location then that's a big plus because typically new construction is rare in places like Pinellas County.
Some things to weigh in too is opportunity cost. There are opportunities on the market to buy into and quickly make a profitable STR in Pinellas vs the lead time to build. If you're building, then like you mentioned it's worth going the extra mile and do something more unique or experience-based to capture a higher ADR relative to the competition.
I'm happy to offer my opinion on whatever project you're considering in the areas around Tampa to go into more specific pros/cons anytime.
You can call me anytime and we can talk what kind of help you can offer.
- 4yAndrew SteffensBusiness MemberTampa, FL · Member since 2022 · 4k+ posts · 3k+ votes
@Artem Pustovar - Im also in the Tampa area. You are definitely on the right track. We manage around 50 properties and are best are:
1 - New Construction
2 - Nice finishes/furnishings
3 - Unique as possible.
4 - Well located. In Pinellas that means as close to the beach as possible and in Hillsborough it means close to attractions/highways.
Shoot me a DM with any questions I would love to help
Andrew Steffens
Vacation Rentals of Florida53 Reviews - New to Real Estate · San Luis Obispo CA / Tampa Area, FL · Member since 2018 · 7 posts · 1 vote4y
@Artem Pustovar I am getting married in Dunedin next month and it is a destination wedding for many of our guests coming from NY state and Canada mainly. Many of our guests looked for houses for short-term rental with the capacity to sleep 12-16 guests or so and there really wasn’t many options in the Dunedin/Clearwater area so I can see an opportunity for these types of houses for short-term rentals.
- 4yAndrew SteffensBusiness MemberTampa, FL · Member since 2022 · 4k+ posts · 3k+ votes
@Nicholas Doyon Those areas are great for STR but the laws prohibit over 90% of them unfortunately.
Vacation Rentals of Florida53 Reviews - Property Manager · Kissimmee, FL · Member since 2019 · 446 posts · 266 votes4y
Quote from @Artem Pustovar:
Hi everyone. I am general contractor and thinking to build my first vacation rental.
I absolutely unexperienced in field of short rentals I have several questions.
1. Is it important you have vacation rental in Nice area and the house to be similar to houses in the neighborhood?
2. I'm thinking to build SFH with 5 to 6 bedroom with all en suite master bathrooms 2500-3000 sf AC area with 2 car attached garage, swimming pool, large covered rerar porch and nice entertaining outdoor space. Budget is 700 to 800k including land with final market value about 1 million. Projecting daily rent $600-$1000 a night.
3. Is there any special platforms or I can get for plans for the houses which is specially designed as vacation rentals?
4. Does it make sense to build 5- 6 bedroom home for the purpose? My opinion that I can comfortably accept larger groups of people and maximize price per night.
5. I'm trying to figure out the best type and size of house I have to build in terms of ROI.
Hi @Artem Pustovar!
Here in the Orlando/Disney market, the type of home you're describing is absolutely the standard in communities like Championsgate, Windsor at Westside and many more. Our market caters to large family groups, multigenerational travelers and friend groups. A minimum of 5-6 bedrooms is a must with at least two masters with king beds and ensuite bathrooms. Additionally, another bedroom with a queen bed or two full beds, one with two twins and one with bunk beds (twin over full is nice). One of the bathrooms could be Jack & Jill, and one separate bath. Importantly, one of the masters should be downstairs to accommodate elderly family members or those with special needs.
If you have a pool, it should have a screen enclosure AND a child safety fence. The downstairs master bath could face the pool, with a door opening to the pool to make showering easy for swimmers.
Since a lot of these homes are build by builders like Lennar or Pulte, you may be able to find floor plans online.
Of course it's important to be in a nice area, even more important is the proximity to local attractions. If you can find a lot with a conservation or lake view from the pool area, even better. And it is imperative to make sure the zoning will permit STR use.Instead of the 2 car garage, consider a game room with a pool table, maybe foosball, even video games. Having a game room will again boost your rates, at least in our market.
Since you're right in Clearwater, I would strongly suggest visiting some of these homes near Disney, or even spending a weekend. You'll learn a lot! Good luck! - Real Estate Agent · Member since 2019 · 569 posts · 257 votes4y
Quote from @Artem Pustovar:
Hi everyone. I am general contractor and thinking to build my first vacation rental.
I absolutely unexperienced in field of short rentals I have several questions.
1. Is it important you have vacation rental in Nice area and the house to be similar to houses in the neighborhood?
2. I'm thinking to build SFH with 5 to 6 bedroom with all en suite master bathrooms 2500-3000 sf AC area with 2 car attached garage, swimming pool, large covered rerar porch and nice entertaining outdoor space. Budget is 700 to 800k including land with final market value about 1 million. Projecting daily rent $600-$1000 a night.
3. Is there any special platforms or I can get for plans for the houses which is specially designed as vacation rentals?
4. Does it make sense to build 5- 6 bedroom home for the purpose? My opinion that I can comfortably accept larger groups of people and maximize price per night.
5. I'm trying to figure out the best type and size of house I have to build in terms of ROI.
I think you can achieve those numbers on the west side of Panama City beach or Inlet beach with 900k to 1.125 million valuation and 90-120k in gross rentals to be safe.
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