Daytona Beach Short Term Rental Update

[Krista Goodrich]

Four years ago me and some other vacation rental investors in Daytona Beach sued the city in an attempt to allow STR in all of Daytona Beach. We fought for this for several reasons: 1. tourism is our main economy 2. there are an incredible amount of dilapidated homes that could be renovated and made beautiful if the investment return justified it (which STR in a beach town could) and 3.this is a family-friendly, lower-cost and now COVID friendly way to travel.

Bottom line.  We lost.  And then we lost every appeal.  

I have many opinions on why we lost, band don't believe we should have and our points were solid...but that doesn't change that we lost. 

Fast forward to Nov. 2020-The City of Daytona started issuing fines up to $15k for even POSTING on any STR site, even if you never rent a single day. They recently fined one new investor $10k for posting on Airbnb and he had never even booked a reservation. To add insult to injury, he removed the listing the day code notified him of the issue (since it's very difficult to get information on where STR is and is not allowed in most cities) as he didn't even know he was violating anything. $10,000!!!! What?!? The city is aggressively going after every STR owner (my hearing is this Tuesday so I'm sure I will get whacked with a big fine) and adorable vacation homes are showing up for sale weekly.

So what's the good news? Four years ago we saw the writing on the wall on this so I started working with other cities in the area and compiling lists of where STR is legal (and there are plenty of spots to invest in Volusia county that should have great returns, you just have to know where). We are buying STR/Vacation Rental homes as fast as they come on the market and killing it on our returns. Additionally, there are pockets where long-term rental returns are also amazing and can cash flow great, you just need to know where to invest.

Florida has over 1000 people moving in a day, our supply is almost non-existent compared to the past and even condos are giving amazing returns (example: we have a new condo purchased at $270k bringing in $4k a month in short term rental income).  While the economy may dip in the future (and will at some point, when is the question), Volusia County is still poised for strong growth IMO.  Our low cost living, weather and current interest rates make for a very interesting investment in the area or in Florida in general.  Where else can you get a home with a pool a block from the beach under $500k?

We have two vacation rental investor groups starting up next month and meeting monthly. One is for women only (sorry guys, but I'm trying to help my girls invest and grow their wealth..it's my mission lol) and another that is open to anyone interested in learning about STR/Vacation Rental and LTR investing in the area. We talk about exactly how the numbers work and are looking to put together some deals for the group so that people that can't go "all-in" on a property can partner up with others with more experience and grow together. Message me if you would like to come to one of our meetings! It will be fun, we'll have drinks and meet at a local vacation rental-this is a great way to learn more if you are interested in this type of investment.

[Krista Goodrich]

Hi Ryan!  Okay, four examples from the past three months of homes/condos me or clients have purchased that are in zones where vacation rentals are legal:  Unit 1:  2 bed/1 bath purchased for $225k, currently finishing up construction to update and make it a 3/2 bath that will sleep 8-10 people.  Renovations approx $75k, will be installing a pool in September so all in about $360k.  Steps to ocean.  Unit 2:  4 Bed/3 bath pool home, purchase price $449k (with seller credit of $15k towards new roof). Purchased fully furnished and ready to rent.  Unit 3:  3 bed, 1.5 bath right near beach and restaurants, $3k reno (basically nothing) purchased fully furnished and ready to rent for $235k.  Unit 4: 2 bed/2 bath turnkey condo purchased for $270 currently renting for about $4k per month and booked completely until August.