Airbnb & Kissimmee? Are they a Good Fit?

Back in September of 2019 when I had to cease operations on my first NY-based Airbnb, I was all about where can I find a location that expressly permits Airbnb?

One morning while reviewing an email from Airdna.co they mentioned that Davenport is an up-and-coming market for STRs. After looking at listings in Davenport, I noticed that the homes in Kissimmee were a tad nicer and just slightly more in price. I got into contract with an existing Airbnb that was really beautiful and grossing $5-7K a month. A couple of weeks in the bank came back with their appraisal at $267K when I offered $319K. I was like "doesn't the bank understand the potential of this place"? This place was a cash machine.

(It ended up being sold a year later for $285K. Looks like it took the owners a year to come around). 

A few weeks later I found a house just around the corner. Were in February of 2020. A house that was in contract came back on the market. The buyer was from Canada and due to COVID travel restrictions, they were unable to fly down to FL and finish the sale. I was unsure why they couldn't use a notary to do the transaction.

Amazingly, I got my current home in Kissimmee under contract for $240K and had the seller carry the closing costs. For a fast-paced market like Kissimmee, the timing was everything. The world was reeling from Covid and no one knew what the future would bring. Travel was coming to a halt and frankly, it wasn't the best time to purchase a short-term rental. Not with Disney being closed down. 

We closed, got the place painted and freshened up. I found a couple of young guys that were willing to truck my furniture from my previous NY-based Airbnb that was sitting in a storage facility in NY down to FL. They were so excited to get a free trip down there. They came down, dropped my stuff off, and set up the house. 

I was so nervous about getting bookings as there are thousands of listings on Airbnb in Kissimmee-Davenport. My property manager was telling me to stop worrying "Jacob, you will get bookings". Sure enough, the bookings came in at $90 dollars a night:( 

After filling up the immediate 6 weeks ahead I was able to raise the price to about $140 a night. 

I did have some rough guests at the outset. I was vacationing with my family in New Hampshire when I got a message through VRBO. It was my next-door neighbor complaining bout the partying that was going on next door. My manager went down to take care of the situation. 

Per my manager's recommendation, we have since avoided parties by making a 4-night minimum. We do allow 2 night stays only when there is a gap of 3 nights or less between stays. 

One-night gaps are priced at a premium of 200% of the going nightly rate. This ensures that our listing shows up in random 1-night searches as people may be searching for 4+ nights but just didn't bother entering exact dates.  

My view on investing in Kissimme is as follows:

You don't have to worry about low occupancy rates. By lowering the price you will get someone immediately in the door. Even if you have a last-minute cancellation, you are sure to get someone to rebook if you come in at $100/night.

In the last 12 months, home prices have risen about 50%. A house selling for $240 back in 2019 is worth about $360K.

New Airbnbs are at a disadvantage as they cannot simply come in at a lower nightly rate, since their mortgage payment is higher than older established listings. 

Having said that, prices are not necessarily coming down any time soon as the average credit score in the USA is higher than it was n 2008. Inflation isn't going to help either. 

Sometimes it's time to look forward to the future and not worry about what the past looked like. 

Check out this article from Business Insider on the real estate forecast.

https://www.businessinsider.co...

This is the story of my 2nd Airbnb in a nutshell. If there are any topics you would like me to share regarding real estate and Airbnb.

Its been a short 2 years but I have learned a lot and I continue to learn more about this exciting opportunity that we have.