All Forum Posts by: Karl McGarvey

Quote from @Jeff Murray:

Good Morning,

I am looking at this market for STR and was hoping to get some first hand feedback from investors who are currently using this market and how successful it has been.

Jeff Murray

I have clients who lean toward MTR in Houston, though STR renting can be a great way to try and fill a calendar in between guests. The majority of my clients (and myself included) look farther South to Galveston for beach rentals for STR. While the market is crowded, as STR travelers return to "normal" levels, you see many furnished units popping up onto the LTR listings with owners who aren't doing well pivoting. There is still great opportunity in Galveston, but its really more of a management/customer service game than a real estate game and I think a lot of people forget that and end up realizing they are not cut out for it.

Quote from @Latrisa Wyatt:

Quote from @Karl McGarvey:

Quote from @Ashley Tocco:

Hi! Looking for any feedback regarding short term rentals in Galveston, Tx. My husband and I are looking to invest in the area, beach or lake house this year and curious how others have done in the area. Also looking to build a team as we are out of state in California. 

 Hi Ashley!

Galveston has a great market for STR whether it be in a single family home or condo, there is something for everyone and a wide range of budgets. There was a dip in business this year but that was consistent with most national numbers. @Holly Brown and I have owned multiple on the island as well as long term rentals and love the market. We also work with out of town investors to help others do what we do. Feel free to shoot me a message if you would like to deep dive on the island and learn about it, always willing to help!

Hello! I appreciate this information. I was wondering how I would find out if STR are not allowed in certain parts of Galveston?

Shoot me a message. Would be happy to show you what areas are not allowed to have STR.

Quote from @King White:

Does anyone know why the average rental income of STR in Galveston is almost half of what it is in other nearby markets like Port Aransas and south padre island. It is really low given when compared to other beach towns.

 Are you using Pricelabs or AirDna to find that Galveston is "half" as much revenue? I never take that data at face value and here is why. Properties on either of those websites do not have to be available for a full year to be factored into the overall data. This means homes that are available for only a few weeks a year and make close to nothing, skew the numbers. When I am analyzing the data I make a spreadsheet with the top 20-30 properties that have 4.85 star reviews or better to find out what a comp property could make. I think you'll see when you start looking at the data without the outliers who never actually have their property available for rent, the numbers look much better and will give you a more accurate picture of what you can make in Galveston. We have clients that buy every year who are still doing fantastic. 

Quote from @Jules Simon:

Thank you Karl. We are especially concerned with the insurance prices since they seem high to us.

Jules

If assuming the policy is not an option, try local agents as opposed to big name. Local agents who are actually on the island can insure your needs way better since they understand the area (or so we have found with our rentals there)

Quote from @Jules Simon:

Hi 

I'm new to this thread but the questions and replies have been very helpful. My wife and I just had our offer accepted for a house in Galveston that we found for $380,000. We are now in the final stages of inspection and calculations and our most important considerations, at this point, are the cost of insurance and getting reliable housekeeping service for the two bedroom/two bath elevated house. If possible, can anyone provide us with names/companies of reliable and good housekeeping service for Airbnb/VRBO STRs? Also names of insurance companies that specialize in Island insurance would be very helpful. We got quotes from Farmers Insurance which insures our home in El Paso not their total estimate was for more than $8,000 per year—$2500 home, $1550 flood, and $3,500 for wind. Can anybody address those two big issues for us and provide us with some suggestions of housekeeping services and insurance companies? The house is in a FEMA AE flood zone and roughly in the middle of the city. Thank you.

 Hi Jules 

Your local realtor who is helping you buy the property should be able to help you with these resources! Those insurance numbers are high, but not unrealistic. Texas insurance rates went up significantly this year and Galveston was not immune. I would try seeing if the sellers policies are assumable to make the policies a little cheaper for now.

For Cleaners, ask your realtor and join the Galveston STR and real estate facebook groups… people in their advertise a lot!

- Karl

Quote from @Trent Reeve:

Quote from @Ben Jimenez:

Hi all,
this is my first post on bigger pockets! I am a realtor/engineer with a couple of short term rental properties in the Dallas/Ft worth area. As of recently, I've wanted a change of scenery. I am looking for recommendations on good beach cities in the US to invest in for a STR. I have the ability to work remote, so my plan was to pick up a property on a beach (been browsing Florida lately). While I furnish it, I was planning on living in it throughout the process of prepping it. So that my cost of living could be going towards my investment. Plus I'd fulfill my dream of living by a beach for as long as I please.

Any recommendations?

 being in Texas, have you looked at Galveston?

I will second that one. We have had great success in Galveston both in personal LTR/STR and helping clients purchse STR. Galveston is booming with a ton of money being brought to the island through tourism, development, and the cruise lines. Happy to chat about what the island has to offer anytime!

Quote from @Matt Fabian:

I currently own 2 LTR properties. Was thinking about a STR. I live about 1.5 hours from Galveston, usually visit once a year. How accurate do you find AirDNA site to be? I plugged in a million dollar ocean front property 3 bed and it estimated about 44k revenue a year, 42% occupancy rate. I then plugged in one of my LT rentals in a small town and it came back as 105k revenue. I live in a small town that has very little tourism. I just cant fathom that a house on the beach in Galveston, an hour away from Houston, one of the biggest cities in the country, would get half the revenue of a house in a sleepy small town. Or maybe I should quite thinking and just trust Air DNA numbers.

 I prefer PriceLabs for Galveston, personal preference, and you should 100% NOT just trust any software's numbers.

The software just takes averages of the properties like yours from the pool you ask it to pull from. In Galveston, where there are 4000 STR units, there are a significant amount generating $0 that skew the numbers. On the opposite side of that there are VERY high performers that drag numbers up as well. When I get the data, and one reason I like PriceLabs, is that it gives me all of the properties in the pool it is pulling from. I snag the top 20 or so and do a deep dive into their reviews, revenue, listing etc to gauge what a property can actually make compared to the top performers.

IMO, if you are making even close to breaking even on a house hack while you are living in it, you are winning, big time. I also factor in the amount of mortgage/rent you are not having to pay when I run my numbers. Those savings are HUGE if you get a house hack right.

You know how lenders make you show them basically everything about you before they give you money? Think of it like that. You protect your investment by being educated on what and who you are investing in.

Hi Maria, welcome to BP! If you're searching for properties to wholesale your best bet is to hit the streets and get hands on finding properties. Real estate agents may strike a deal with you to help you sell it or assign the contract on the back side, but for the most part, if they are looking for a property that someone wants to sell, they want to sell it themselves and not give up their commissions to a wholesaler. The Texas Real Estate Commission is also working at the State level to start controlling wholesaling, I am interested to see if they start requiring wholesalers to get a real estate license.