Our First STR and Out of State Investment Property

[Eric Schroeder]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $325,000
Cash invested: $32,500

Vacation home purchase in Tampa, FL that we have set up as a short-term rental.

How did you find this deal and how did you negotiate it?

I used a real estate agent we found on Bigger Pockets. She helped us locate a property that would work as a short term rental.

How did you finance this deal?

30 year fixed - 10% down

How did you add value to the deal?

Replaced the deck and some cosmetic work on the interior. Furnished it from top to bottom with Amazon and Ikea.

What was the outcome?

At the moment breaking even. Being the hottest part of the year in Florida this was expected. We're looking for more bookings in the Fall/Winter/Spring time, once we've built up reviews.

Lessons learned? Challenges?

The house is a 100-year-old bungalow. This comes with its own challenges. We had a full inspection done, but things that were okay at the time of inspection have come up since. We had to replace some pipes in the yard due to the ancient trees in the area. The A/C runs a LOT. So make sure the HVAC has frequent maintenance.
Investing out of state, we used some referrals from our investor agent and found a fantastic contractor/handyman. For some other minor issues, we've used Google search.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Agent Kristina Kuba - Tampa, FL

[J-Ryan Stewart]

You might be surprised what you could accomplish sourcing much nicer furnishings than Amazon & IKEA. Usually we spend equal or less for sturdier items just through sourcing experience. If you know what you're looking for on Amazon, about $1500 in the right silk plants alone could make this place book out for higher rates all year. 

Make sure your handyman tightens every piece of furniture in that place every couple months or you'll have dozens of bolts working themselves loose. Overall you should only expect these furnishings to last about 18-24 months before reinvesting. Our business is essentially to put residential properties & furnishings to commercial use, so make sure to budget for regular updates or your nightly rates will flounder, especially in shoulder & trough seasons. 

As far as HVAC, get a Nest or similar digital thermo that allows you (or your STR management) to PIN-lock guests from setting it below 68. This will protect the system & keep them from freezing it over & getting their money back from the booking platform for something they did.. If there's even a shadow of a plumbing issue, spend the money on new pipes before taking reservations. These guests will flush everything & you'll just keep dealing w it & losing reservations.