All Forum Posts by: Jeff Smith

I sell Florida's Emerald Coast, and we have great, affordable properties that rent well.  STRs is all I do with The Short Term Shop.  

You didn't say how much money you have to invest, but I can get you small condos starting in the low $200Ks (will require 25% down), townhomes in the mid $300Ks (finance like a SFR), and furnished SFRs starting in the low $400Ks.

Hi Jeff,

I am from NYC and like your area, the prices are through the roof, but the returns are still better than the STR in Kissimmee. I start following the STR market in a number of resort areas in Kissimmee since April. The 7bd 5ba are among the best rental units in places like Solterra resort, Windsor Hill resort, Emerald Island resort, Solana resort and a few more. The price point for 6 and 7bd turnkey properties is between 650K to 750K and for the ones that need repairs and furniture, the price point is between 590K to 650K. I view ten properties last month and made over 15 offers with 40% down but was only able to get the turnkey properties down to 595K-638K. Yes, this shows sellers are gradually moving to accept the new reality and so waiting, especially in all the instabilities surrounding us right now, may be a better option.

Like so many others pointed out, Kissimmee is close to a point of saturation and very challenging to stand out. Pulte alone has about 100 new houses under construction. It is hard to be very conservative on CoC entering a depreciating market. I am not aware of how much research you have done so far but here is a quick way to understand the market is still overpriced to be a good investment in Kissimmee. The average expense for a 7bd is about $3,125. (HOA 420; INS 250; Gas, light, water 550; Taxes 510; pool 110; pest 35; full management 900; maintenance 250). If you are looking for 7% CoC and 7% for loan, then that would be (7% of 600K) another $3,500/month bringing your monthly payments to $6,625per month. The average income on a 7bd is $6,250 per month (75K per year). Now, STR is a business model where you have to pay quite a bit of taxes. This may just break even or leave you in the red.

Why are houses still going in contract for 600K plus? Many international cash buyers find this investment a lucrative way to preserve and grow their cash in places with worst economy and inflation. My suggestion is to buy a 7 bedroom 5 bath for no more than 525K in this area. I am in the same boat as you, visiting Disney twice per year and feel this would be the best way to invest but the numbers will not add up at the current price point. I hope this helps.

@Jeff Smith - It all depends on how conservative your numbers are and if you have stress tested your deal/analysis. Agree with all above regarding market saturation and decreased occupancy compared to 2020-2022 data, so it makes sense to utilize 2019 data for a better insight. As more folks move into STR space, specially in markets like Disney/Orlando, occupancy is bound to suffer. However, we also have to keep in mind that there are still new developments and properties being built in this area and for a 5BR property, the listing price is close to or above $500K for these new constructions in STR zones inside community resorts. Vacation rentals will continue to operate and flourish in these areas.

WIll folks/new owners make a huge profit right out? Probably not. 

Will folks survive the competition? Depends on time line. If thinking about long term, then probably yes, because rental nightly prices will continue to rise with inflation but your monthly PITI will be the same.

Bottomline - Please stress test your analysis using conservative numbers and have enough reserves to cushion back if your occupancy suffers for the first year or so. 

Disclaimer - We have bought a property in Kissimmee area for STR use.

If you want help in running numbers and analyzing deals, PM/DM me. Good luck. 

In the Kissimee area you can probably hit your budget, but the market is a bit saturated, so ADR is lower than you would want at that purchase price, and occupancy suffers since there's so many properties that are exactly the same.  You really want to stand out and be in the luxury space there.

In West Central Pinellas in particular, you're looking at around that price point as the median (420k) and average (530k) sales prices. That will usually mean a 3/2. Those numbers are coming down a bit as we go into winter but I don't think they are going to drop a ton -- there's still a ton of demand. And in the areas that you will want to buy for the highest ROI, there's still buyers competing. Overpriced and poorly located or maintained houses are starting to sit on the market for much longer now but these are exactly the houses that you won't want to be a successful vacation rental.

A 5+ bedroom with a pool is starting to move into the luxury market here.  That will push you above 550k, easily.  And in the best locations, well above 700k.

That's not to say 500k can't get you a great property. It will just be more like a well-located 3/2, maybe 4/3 with a pool (you need a pool). That will still look like a 9-11% cap rate and you can still get decent CoC ROI with financing.

@Jeff Smith

There are definitely great opportunities here for short and mid-term rentals in that price range. I have closed a good amount of deals in that range and the Tampa area would be a great place to visit for your family. Disney is only a 2 hr drive and I've made the trip and back the same day several times. You can expect not only healthy cash flow but high, long-term appreciation. For a 10 yr hold, something in that price range will make ~$6k+/mo in appreciation as well as $5.5-8k+/mo in revenue.

Hi @Jeff Smith, if you’re looking at the west coast of Florida in the areas that you mentioned, I suggest reaching out to @Josh Green. He knows the area well and can provide you with guidance on what it is that you're looking to accomplish in the STR realm. I hope this recommendation helps!

My recommendation is that you wait. I looked at Florida pretty heavy in the spring of 2022 and nothing made sense. It's saturated, properties are over-priced, and people were making emotional purchases instead of wise investments. I'm sure it's cooled a little, but probably not enough for me. If you're going to shop, know your numbers really well and don't base income on what happened in 2020 - 2022.

Thank you Julio, Nice to meet you.