Beachfront Vacation Rentals

[Craig Fitzsimmons]

My wife and I are interested in a beachfront vacation rental and I have two initial questions that I’d appreciate some feedback on. 1). Where is your beachfront rental? 2). How many days was it rented in 2017? 3). Do you self-manage? Thanks in advance! Craig

[Villy Ellinger]

@Craig Fitzsimmons I have three vacation rentals in Fort Walton Beach, FL (near Destin, FL on the Panhandle). I self-manage and I live here. I know that is a bit more difficult for people who don't live in the area where their rentals are located. I have found out that paying a full-service rental management company can certainly provide peace of mind and a totally "hands-off" experience for out of town owners, but the 20% to 30% of gross rental income fees pretty much eradicate any potential profits you hope to make. My two established properties were rented about 300 days last year. I usually have very little vacancy. The third property I just bought, so can't give stats for 2017. Occupancy really depends on several factors. One is obviously the area. Down here in Florida we have the beach season, but we also have the "snow birds" in the winter. While off-season is slow for many rentals here too, there is definitely potential to fill the units. Most of my vacancy is usually in November (except for Thanksgiving), early December and the 1st week of March. The other factors that play into occupancy is the quality of the property (good upkeep, well decorated, amenities, etc), the pricing (needs to be competitive off the bat, pricing too high only to offer constant "deals and discounts" is a turn-off for many guests, pricing too low or not in keeping with the season leaves profit on the table), and the management style/response (whether self-managed or otherwise). Prompt, professional response, attentiveness to every guest and all their questions, etc is key. I know that many people find it very daunting to manage their own vacation rentals from a distance, but you should really consider it or at least consider managing your own "partially". I don't want to promote my business here because that is against the rules of the forums (which I respect), but if you ever have questions about various "hybrid" programs and assistance to VRBO owners who manage themselves, I will certainly be glad to discuss further as I provide some of those assistance services down here in Ft Walton Beach.

Wherever you choose to buy, it's a good idea to visit in the off-season as well. Also, when you do your "rental income pro forma analysis" be very conservative with expected occupancy especially in the first year. Owning vacation rentals on the beach is great if you put in the time, the research and attend to your guests. They have many options to choose from.