All Forum Posts by: Dan Maciejewski

I would think somewhere between STR and LTR occupancies. I'd keep 70% as a base and shoot for 90%+ on the high end.

I think I'd be pretty happy with 90%.  If you're wondering if rates are too low, raise them a hair in advertising and see if your number of inquiries drop.

I tend to agree. In almost all investments, you should have a solid base of reliable, cash-flowing, and hopefully appreciating assets before striking out into something new or riskier. Like Having a great base of index funds and a fully funded IRA before throwing savings into crypto or the newest AI quantum-powered dog walking business! In real estate, that would look like some solid LTR and maybe commercial tenants

That being said, there are still many opportunities in STR in many areas. I would suggest a good PM to start if you don't have a solid background in hospitality or at least something in the service industry.

Self-managing can save a ton of money if you know what you are doing.  If you don't, it can cost you everything!

I make sure they have enough TP, DIsh pods, Laundry pods, and Trash Bags for the entire stay.  The only issue I've had is a small period where the laundry pods would always be empty at turnover.  That stopped when I stopped using third-party cleaners, but I also started to only leave enough for the stay.

I use a small Dawn hand dish liquid that I fill between guests and larger hand soap dispensers in the bath and kitchen that I fill between guests.  They have never run out.  I want guests to do their laundry throughout the stay and keep up with the dishes and trash :-).

I also fill my K-cup dispensers between guests. Most don't use them all; some fill them themselves with their preferred coffee or tea.  

I've also had guests buy their own TP and trash bags and leave the extra.

As for toiletries, I leave the traditional "Starter Set" of shampoo, a little bar soap, conditioner, and lotion  (the tiny hotel bottles).  I have yet to have a guest ask for a refill or mention the quality (I tried to pick a nice-looking, not-too-expensive brand).

Be careful with the scents -- I had a run of people pulling out and hiding the scents and one or two people complained that they were scent-sensitive in private notes.  As an aside, my laundry pods for the guests and liquid for the turnovers are "free and clear" and have never gotten a complaint.

I have had guests break into my owner closets, but oddly never steal (they were kids probably looking for liquor).  I still wouldn't give people an all-access closet.  I'd let them ask or reach out to them after a week or so for longer stays.  I'd automate the email/message so I don't forget, too!

What you want to do is compare ADR between pools and no pools for similar properties.  Also, try to see if pools have a higher occupancy rate.  In my area, it's been around 30% ADR difference and a slight (<10%) occupancy increase. But, we are 4-season pool-use rentals.  A lot of people come here in the winter and want to use the pools.  In a region that only uses the pool for 1-2 seasons, it may not be worth the cost.  I don't know what your winters are like so you'd have to look!

It may be useful to chat up a few (local) property managers to see what they think.

With the rent demand in our area, you don't really need to put it in the MLS. It would feed out to all the other sites that prospective tenants will be using but you should get enough traffic from just using Zillow Group and maybe FB Marketplace.

I tell all my clients that it's not worth it in the current market to bother with the MLS. There are enough qualified tenants that want good housing that they WILL find you!

In almost every area of the US, I think buying for appreciation is going to be on hold for quite a while.  

Appreciation has slowed to 2-3% in the Tampa Bay area that's still seeing some of the country's highest inflow of buyers.  Some areas are definitely seeing some backward price growth.

Buying for appreciating has always been speculative and riskier than buying for cash flow.  It can still be done, but I would be very careful and make sure you know the area VERY well!

FYI:  After the initial month of killing yourself furnishing it and getting it up and running (scheduling furniture deliveries, decorations, pics, getting the listing published, finding cleaners, etc.... ) , it doesn't really take much time to run at all.  Barely more than a regular rental.  You'll just be playing with the descriptions and making sure it's getting booked.  

If you already bought it as an STR, I would say just do the work to get it ready. It will be a VERY busy month, but you can get it going in a month.  

Also, I'm sure most furniture stores will be more than happy to help you furnish a whole house!  You'll pay a lot more than just piecemealing it on FB marketplace, but you either pay in time or money -- I usually pay money to save my time.

 Definitely second that.  A lot of Pinellas near the beaches should get you around 100k+ with that budget.  That will put you in the above median and into the average price point for the area -- so nice houses with pools.  

Orlando can be tough because there is so much competition that is all very similar product.  There were a lot of purpose-built vacation rental communities on top of all the subdivisions that were put up fairly recently (last 10-20 years).

There are a few ways to look at these.  

First -- LTR is way less hands-on and more on the passive side once you're leased up. You can think of an STR as a small, luxury, one-suite hotel -- in other words, a business, not a passive investment (even if you're under property management). The returns are usually better with STR, but for a first investment, I would normally recommend a long-term rental. But, it's been really hard to make the numbers work on a long-term rental in most regions recently.  If you're a flipper with access to great deals, then that will change things a bit from a normal retail investor.

Next -- I can't answer what's best for your region, but I can tell you why I shy away from condos in my region.  

1.  The condo fees are always going to go up, and you can't control the capex like you can in a detached home.  That can hit numbers a lot

2. If you're in a building that allows STR, the board can usually change that at any time. Some places limit turnovers, the percentage of owners that can rent out units, the max/minimum days per stay, the number of guests per unit, etc... All of that can usually be changed by a vote. Unless:

3. You find a building that is built for STR. In this case, almost all of the owners will be investors, and will likely always be an investment complex. This will make it harder to finance. It will be a non-warrantable condo, which will make financing harder.  But even more than the financing:

4.  You will run into the problem of returns.  You will be buying into a condo a today's prices, while most, if not all, the other owners will have bought at much lower prices.  They will be making fine cash flow with much lower rent rates than you will need to charge to make your numbers work.  This is a much bigger problem than in a house because you can't differentiate yourself by location, floor plan, amenities, etc...  The best you can do is spend more money to update and decorate to higher levels, but you won't get a whole lot more rent just because you have a sexy shower, hood vent, or a new fridge.  The other owners all having basically the same product puts downward pressure on price because that's all they are competing (at least against each other) on.  Apartments will have the same problems on this issue.

I'm not sure what one has to do with the other but here's my 2 cents on both:

1.  Disclaimer -- what follows is barring a nationwide economic collapse.  IF we have a nationwide economic collapse, there will be a lot more to worry about, like food rations and Venezuela-like runaway inflation.  

It's been a year since I looked at houses, houses under mortgages, and delinquencies, but based on appreciation being so high, I doubt there are many people underwater enough to force a short sale or foreclosure when they could just sell at market value.  Births are outpacing deaths still (thankfully we're not falling off the demographic cliff like Japan or Germany yet), and we are a growing country.  All reports keep saying that we are in a nationwide housing shortage of 6-7.5 million homes.  That means that demand is still outpacing supply - the recipe for higher prices.  As long as property values stay up, appraisals stay up and prices stay up.  When prices are higher than when you bought, there's no need to short-sell or get foreclosed on.  This is a slide from a mortgage broker but it tracks what my research says:

2.  The new rules that were passed were just to keep residents off the politician's backs.  The 2011 State preemption law prevents cities
from “prohibiting” short-term rentals or regulating the duration or frequency of the rental.

The rules about parking and quiet hours are already the County rules, so they are a waste of words.  The $400 registration fee may be seen as putting an undue burden on property owners -- if that's the case, the city would lose all rights to regulate STR. We'd have to see it challenged in court. And does anyone honestly think that a $400 registration fee is going to make someone making cash-flow sell?

The limit of 10 people per household will also probably be challenged in court.  There are plenty of non-rental houses with more than 4 bedrooms, and all of those are now limited to 10 people!  If I spent 2-8+ million on my 5-10-bedroom beach house, only to be told I can't host my own family, I would be livid!  There will likely be selective enforcement -- only on STRs, and that will likely provoke a lawsuit that I'm not sure the city is funded for.  It only takes one litigation attorney owner or a well-heeled owner to sue the city

The only way that regulations with teeth could be put into effect would be the State deciding to allow cities to have home rule again. And that would mean turning their noses up at the millions in additional tax revenue from the 6% "bed tax" on transient rentals that the STR boom has produced. I don't see that happening. Anything's possible, though. ¯\_(ツ)_/¯

Your other questions:

There is definitely intimidation.  You see the "Homes, not Hotels" signs in every other yard.  At least a few people are tracking owner information and harassing them IRL.  FB groups are rampant with renters throwing fits about home affordability.  I have seen this firsthand from clients sharing with me.

A lot of STR investors are from out of town. They can't always fly in to present their arguments and wouldn't due to the mob mentality at the town halls. And a business plan is no way to fight an emotional mob, anyway -- why would I care about anyone else's business plan if I'm complaining about the lack of street parking on my block?