All Forum Posts by: Brandt Fanion

@Neil C Stark there's many great suggestions on this thread. Be sure to use the "Enemy Method, which can be found on YouTube." I've found that Rabbu can also be a great resource to quickly filter and narrow down comparable units by reviews, min. occupancy, min. nightly rate, and distance.

@Mary Ciccarelli Here in Orlando, we have resort communities that are master planned developments. Being that the floorplans are very similar in these communities, it's much easier for us to calculate the cost of furnishing a unit based on bedroom count.

Professional interior designers in this market will generally quote somewhere close to $10k per room, which also includes furniture for the outdoor patio and living areas, as well as 1 uniquely themed room, all with hotel quality furnishings.

So a typical 5 bed might cost around $45-50k for everything down to linens and utensils.

Of course, labor is involved in this cost as well. If you're doing the furnishing and sourcing yourself without theming, it might cost half this amount in your market.

Kissimmee is known as the "The Vacation Home Capital of the World." In Osceola county, there's short term rental overlay districts with master planned resort communities that are specifically designed for short term rentals. These resort communities include clubhouses with concierge service, shuttle service to the primary attractions, splashpads, movie theaters, arcades, etc. With the exception of condos, most properties in these resort communities qualify for conventional financing. Our local economy relies heavily on tourism. However, in the Orlando market, there's an added benefit of also being a major city with high demand from population growth.   

The city of Orlando in Orange County only allows for STRs if the property is your primary residence, and you can only rent out less than half of the unit. This can be problematic if your goal is to maximize cashflow. You'll find the majority of STRs are located in resort communities in Kissimmee/Davenport. However, there are also some units in Clermont that do quite well. Kissimmee has STR overlay districts that are areas specifically designed for STRs. Here are 4 important factors to maximize cashflow with STRs in Orlando:

- park proximity ( > 10 miles)

- number of bedrooms

- resort amenities /private pool

- Theming

This is exactly why so many investors are turning to short term rentals. The capex expenses are basically the same, but your cashflow can be substantially better. 

@Cody Gray

One method is to message experied hosts in these markets on Airbnb. You'll likely experience some resistance, but a few will be willing to share their contacts with you. Another option is through turnoverbnb.

@Alexandre Medeiros, John is correct. For the majority of situations, self management for STRs is the way to go. You'll save anywhere between 10-35% of your gross revenue.

Self management also gives you the ability to pay close attention to the details that have the biggest impact on your cashflow. For example your nightly rates, leveraging cleaning fees as secondary cash flow, overall guest experience, quality/quantity of photos, and property condition.

@Taylor Celestin with so many great automation tools available, you may find that hiring a property management company is unnecessary. In fact, managing STR properties yourself could result in a significant increase to your CoC. Most property management companies charge anywhere between 10-35% of your gross revenue.

@Brennan Clayton congrats on finding the deal. Buying your first STR can seem a bit intimidating and it's natural to want to avoid making any mistakes. Of course, we're in a really hot seller's market right now, but it all comes down to your numbers, your goals, and what you want to get out of the deal. Something to consider when running your numbers is that you can use your cleaning expenses as another form of cash flow by raising your cleaning fee slightly above what your cleaning crew charges you. So if it costs you $150 per cleaning, you might charge your guest anywhere between $175-$200. That small extra charge can make a difference on your annual cash flow.

I'm looking to purchase a vacation rental in the Central Florida area, most likely somewhere within an hour of Disney. I've been working closely with a couple different lenders too finance the property as a second/vacation home, to be used primarily as an investment throughout the year.

My mother is looking to retire in the next 5 years, and really hasn't developed much of a strategy for retirement. We decided we would partner together to purchase a property to build a strong STR portfolio which would serve as a retirement vehicle for her. I would manage the properties and eventually take them over, and leverage the equity to buy enough units to replace my W2.

Right now, we both make decent money and we have about 60k to get started with good credit, but not much credit history. I just purchased a primary home 2 months ago that I will use as a rental in about 12 months.

On her own, she is pre-approved for 350k. In the Kissimmee area near Disney, 350k in a community that allows STRs, we would likely be looking at SFRs older than 10-15 years.

With all of this information, to me it seems like it wouldn't be too difficult to get started in STRs, but even with 60k and the pre-approval, one lender told us it would take all of our cash to close which would leave us nothing for furnishing and reserve capital.

Based on all of this information and knowing what you might about the market, inflation, and interest rates, what would you suggest for financing options? Should we wait to save up more capital before purchasing a property? Are there better options for getting started?