Strong Florida Short-Term Rental markets?

Question

Hello All,

I live in Orlando and I'm wondering if there are STR markets in Florida with strong rental income. Orlando/Kissimmee market looks very competitive so I'm trying to avoid it.

I've read in Evolve article that Destin rentals shows very strong rental income. A 2-bedroom Destin property grosses $43510 whereas Smoky Mountain grosses $34622 in average. Would appreciate other investors can share their experience in Destin (or other Florida markets)

Best,

Maan

Villy Ellinger · Answer

@Maan Najjar I'm in Fort Walton Beach/Destin, FL and I mainly work with vacation rental STRs (mine and those I manage for others). Yes, the market here has very high occupancy/constant tourist demand and high gross rental amounts per year. There are some 2/2 on Okaloosa Island (for example in the Waterscape complex) that gross well over $60K. That said... STRs are very hands-on and very dependent on management, unit set up, marketing and the type of financing that you can get. It's not a "if you build it, they will come" situation. I like it here and I make money. But again, anyone that tells you "it's a sure thing" is not being reasonable. Also, if there is no risk there is no return, lol. There is always the risk of hurricanes, etc here. But... there are 3b/3b on the beach grossing close to $100K. My one-room studio (my smallest unit) on the Sound (Intercoastal Waterway) in Ft. Walton, which is 325 sq ft grosses $24K per year. However, it "turns" every few days and is quite labor intensive when it comes to management. Every coin has two sides. If you do it right and can put in the time and the initial investment, you can do really well with STRs in FL in my opinion. But it's not a magic money-maker.

Paul Sandhu · Answer

@Maan Najjar  If there is a market, nobody that has a property in the market will tell you about it.  They would be cutting in to their own business, because you would be their competition.

Matt "Roar" Gardner · Answer

@Maan Najjar - I'm an investor and Realtor in the Destin market.  I have STR and plan on buying two more in 2019.  As a gross generalization, these properties will create 15-30% ROI before management fees.  Most STR management along the Emerald Coast charge 20-25%, so you'd essentially be breaking even most of the time when you use a management company.  A lot of people are okay with this setup because they can also use their investment property in the off-season with their family without hurting their bottom line (because our peak months are March - August).  While it is possible to cash flow with a management company, you'll be much more likely to cash flow self managing, if you can swing it.  It's definitely possible to self manage remotely - I know plenty of people who do that.

I also recommend reading "Get Paid for Your Pad" by Huzefa Kapadia and Jasper Ribbers.  They do a great job of breaking the AirBnB world into actionable steps.

I'd be more than happy to help you out on the realtor side of things!

@Eric P. - Thanks for the shout out.  I'm still looking for someone to help you out with the lease to STR gameplan.

Ken Latchers · Answer

The best VR is one you live close to in a reasonable market. Evolve doesn't mention that they also charge your guest like 20% in addition to your 10% or so. And you still need to do the in person stuff.

Prop mgrs can make or break you and take a huge cut

There is many ways to automate a VR especially if you are nearby.

I have a duplex with 9/10 bedrooms and cost $135,000 and I project $60-65,000 annual gross in a good tourist town.

Making $100,000 means a lot less when you are 100 miles away and it costs $400,000

Eric P. · Answer

@Matt 'Roar' Gardner

Ryan Good · Answer

@Villy Ellinger thanks for your input this is very helpful

Wendy Schultz · Answer

We have two STR's in the Orlando area. I think it can be competitive if you're not marketing them in other ways than VRBO/Airbnb, websites. We market the properties that we own and ones we manage for others through those sites but also market via social media, to charity auctions, and in areas outside of Orlando. We work our networks a lot. We also buy unique properties that don't look like all the rest!

Wendy Schultz · Answer

I didn't know Evolve charged guest fees. How did you find that out?

Strong Florida Short-Term Rental markets?

Most Popular Reply