All Forum Posts by: Carson McGee

 Hi Scott, 

I own and manage short-term rentals in the Kissimmee/Davenport area. I would say that there is absolutely a sweet spot, the market has an abundance of 3-5 bedroom homes. Even with top-tier theming and design, it can be tough to stick out from the competition at this level. All of the homes that my company owns are 8 bedrooms or larger. This is just the specific niche that my team has found to generate the best return on investment. This varies based on your specific goals. The larger the home, the higher the purchase price, cost to furnish/theme/design, etc. The larger homes have less rental competition than the average home and can yield a much higher rent premium in peak season. This is mostly due to our homes comfortably sleeping 15-20 people and being able to target multigenerational groups who can split the rent. The larger homes can be more difficult to manage, with all that square footage, there are more amenities and general upkeep needed. Ultimately, it is up to your personal goals and what you desire to achieve. Despite all the competition, you can be successful at any level if you run the numbers and put effort into the design. If you would like some real data on how annual revenue fluctuates in these different communities feel free to reach out! 

Our favorite tool to use is Pricelabs market dashboard. This is $10-$20 per 50km radius around a given city. It gives you insight into direct competitors annual revenue, occupancy, location etc. A pretty accurate and affordable tool to know what areas are worth the time to research further.

You should definitely check out Furnished Finder, they are a marketplace with a pretty broad audience of travel nurses, traveling professionals, insurance companies etc. I would also consider simply using Airbnb/VRBO as an advertising platform but setting your minimum stay to 30/60/90 days. The tenants would still be those expecting medium-term stays but the reach on those platforms would help your exposure.

I currently only have STRs in Maui. I saw a recent bill (41) that extended the Oahu STR limitations in residential areas from 30 days to 90 days. Currently, the only areas in Oahu I am aware of that allow STRs are resort zoned. These are primarily the three you mentioned; Waikiki, Ko Olina, and Turtle Bay. There was also a previous bill (89) that capped the number of vacation rental permitted units to 1,700. If you can find somewhere for sale that generates a good return, with the lack of STR inventory, it would be a good long-term investment.

I own three STR condos in Maui. They can be very profitable and are often in a more desirable area, our complexes are oceanfront. The biggest downside is HOA fees, they can get pretty steep. They do include Wifi/Cable, Amenities (Pool, Suana etc) Grounds Upkeep, and one of our complexes includes electricity. It all comes down to location, yield, and personal preference.

Investment Info:

Condo buy & hold investment.

Purchase price: $675,000
Cash invested: $168,750

This is a one-bedroom condo at an oceanfront resort in Lahiana. It is a zoned short-term rental and had value add opportunities. This condo was a partial BRRRR, I purchased it with cash and made some updates. With market appreciation and a slightly nicer unit, I was able to refinance at a higher value than the purchase price. The annual gross revenue is $110,000-$125,000. View the listing at Elevated-Stays.co

What made you interested in investing in this type of deal?

This was an opportunity to get a high cash-flowing short-term rental in a prime location. We already had a successful unit at this particular complex, we were confident in the performance potential.

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

I found it on the MLS and negotiated with the seller using cash and waiving inspections.

How did you finance this deal?

I found it on the MLS and negotiated with the seller using cash and waiving inspections.

How did you add value to the deal?

We added some value to the average daily rate through updated design (furniture/art). We also had confidence in our ability to manage and operate better than our competition, increasing annual revenue.

What was the outcome?

The outcome was a very successful short-term rental that has generated over $46,000 in revenue in three and a half months.

Lessons learned? Challenges?

A challenge was getting lenders for non-warrantable condos. I found a way to successfully pull our equity out and benefit from market appreciation.

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

We used a licensed team member and a DSCR lender who used AirDNA revenue estimates to qualify. Feel free to reach out for their contact info.

Investment Info:

Single-family residence buy & hold investment in Kihei.

Purchase price: $875,000
Cash invested: $218,750

This is a one-bedroom condo in Maui, it is zoned for short-term rental. This condo was purchased with cash and equity pulled out with delayed financing. The annual gross revenue is $135,000-$150,000. View the listing at Elevated-Stays.co

What made you interested in investing in this type of deal?

This was an opportunity to get a high cash-flowing short-term rental in a prime location. This particular complex has lower HOA fees than the average oceanfront unit.

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

This deal was found on the MLS and a cash offer was submitted at asking shortly after listing. We negotiated with the seller using our cash advantage, waiving inspections, and flexibility with a quick closing date.

How did you finance this deal?

I bought the deal in cash and completed delayed refinancing. This allowed me to repurpose the equity in more deals.

How did you add value to the deal?

We added some value to the average daily rate through updated design (furniture/art). We also had confidence in our ability to manage and operate better than our competition, increasing annual revenue.

What was the outcome?

The outcome was a very successful short-term rental that has already generated over $34,000 in revenue in three months.

Lessons learned? Challenges?

A challenge was getting lenders for non-warrantable condos but we found lenders that allowed us to successfully pull our equity out.

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

We used a licensed team member and a DSCR lender who used AirDNA revenue estimates to qualify. Feel free to reach out for their contact info.

Investment Info:

Condo buy & hold investment in Lahaina.

Purchase price: $1,100,000
Cash invested: $275,000

This is a two-bedroom condo in Maui, it is zoned for short-term rental. This condo was purchased with cash and equity pulled out with delayed financing. The annual gross revenue is $165,000-$170,000. View the listing at Elevated-Stays.co

What made you interested in investing in this type of deal?

This was an opportunity to get a high cash-flowing short-term rental in a prime location.

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

I found it on the MLS and negotiated with the seller using cash and waiving inspections.

How did you finance this deal?

We bought the deal cash and refinanced after the fact to repurpose the equity in more deals.

How did you add value to the deal?

We added some value to the average daily rate through updated design (furniture/art). We also had confidence in our ability to manage and operate better than our competition, increasing annual revenue.

What was the outcome?

The outcome was a very successful short-term rental that has generated over $46,000 in revenue in three and a half months.

Lessons learned? Challenges?

A challenge was getting lenders for non-warrantable condos but we found a way to successfully pull our equity out.

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

We used a licensed team member and a DSCR lender who used AirDNA revenue estimates to qualify. Feel free to reach out for their contact info.

 Thanks Joshua!

We purchased it at a "condo-hotel" so the entire complex is zoned for short-term rentals. A few of the older complexes have been grandfathered into the regulations, search "Minatoya List" if you want to see the specific zoning. As far as single-family homes, it is a very long and difficult process to get a permit.

Hi!

I own 11 STRs in three markets, and we have found great cleaners through Facebook Groups and other property owners. Other STR owners and operators are often very friendly and willing to share their vendors. Also, make sure to join local Facebook Groups to get new contacts. You should always vet and interview them to ensure they are a good fit. We have our cleaners do a variety of management tasks for us as well. Best of luck!