All Forum Posts by: Keith Courtney

Tobey 

I am quite involved with vacation rentals here in Orlando - a great vacation spot.  If you would like some information about our vacation home market here, please feel free to contact me.

Keith

$10,268 Profit/Year – 13.7% Return On Cash Invested

3/3 townhouse vacation rental with amenities like below - In Windsor Hills Resort (Kissimmee, FL) near DISNEY WORLD, championship golf courses and other fun venues - DOUBLE WIN for you–“FREE” personal/business use and a GREAT investment from short term rentals when you are not using it

For Prospectus - http://ow.ly/a0Hz300xrrq

Jacob -

Lots of owners and property managers are going to Wifi enabled thermostats for their vacation rentals.  Huge money savers on their electric bills.  They are a great investment.

Another great idea is . . . A lot of property managers and owners have wifi enabled programmable front door keypad locks.  Great for vacation rentals where you are constantly changing the door codes from one guest to the next.

Keith

Eric -

Beyond asking about the deposits, payments and reservations on the vacation rentals, the most important question to ask is whose reservations are they.  Here in Central Florida, if the property manager of a home has secured the reservations, the reservations belong to them.  In this situation the new owners would have to stay with the current property manager to benefit from the reservations.  If the new owner chooses not to stay with the current property manager, the property manager will assign them to a different property under his management.  If the current owner has secured the reservations, then those reservations will transfer to the new owner, IF the new owner wants them.  I have been part of a number of situations where the new owners, who are going to do a number of upgrades to a property to increase the rental income of the home, do not want the existing reservations because they are booked at too low of rates.

Good luck with this.

Keith

Debbie -

I am in Orlando and do a lot of work with short term rental vacation homes in the Orlando area and on either coast from here.  What area in Florida are you thinking about?  If in my area, I can send you pro forma statements on vacation homes that will give you a good idea of the income that can be generated.  You are correct about the 14 day restriction as far as the IRS is concerned.

Keith 

Here in Orlando, FL, we have a year-round international market for short term rental vacation homes mainly due to Disney World, Universal Studios and SeaWorld, so it has the potential for being the perfect setting for very profitable vacation homes.  

But the fact is many of the vacation homes have break-even or negative cash flows.  Why?

One reason is many owners are perfectly happy with break-even cash flows.  They buy the homes on emotional highs when visiting here.  They do no analysis of their investment.  They just want to stay in their own vacation homes when visiting here and are not as concerned with cash flow.

Another reason is that the owners that are desirous of a positive cash flow make bad decisions. They don't think in terms of renters and what features that renters will want in their vacation homes. Owners buy homes that match their likes, and often those likes don't match what renters want. Small budgets also lead to bad decisions. They either buy the wrong homes (the only ones that they can afford) or, once they buy the homes, they have no funds left to upgrade the homes with the features that renters want.

The vacation homes that I witness with positive cash flows (some with 20%+ returns on cash) are in highly desirable locations, and the homes have most, if not all, of the amenities that renters want. The owners did their homework and made decisions with sound analysis.

The irony of this market is, though there is lots of competition because there are 1000s of vacation homes here, there really is not that much competition for the homes in the best locations and set up correctly.  Substantial vacation home profits are being generated, but the profits are only being generated by a relatively few of the homes.

Rich -

I advocate vacation homeowners hiring property managers that allow the owners to do their own bookings saving the 20-25% fees.  By following this strategy, a homeowner's marketing costs are only ~5% of rental income, which pays for listings on HomeAway, VRBO, FlipKey, etc., and also a separate marketing website for the home that integrates with the listing websites.  The property managers charge $250-$300 per month, which includes weekly pool cleaning.  If you are an absentee owner, paying a good property manager is money well spent.  There are just too many instances that I have witnessed when someone needs to go to a home to help a renter - he can't figure out how to use the electronic lock on the front door, a light bulb needs replacing, something breaks, etc.

Keith

Yes I do.  I sent you a colleague request.  Feel free to contact me.  I will try to help you in any way that I can.

Chuck -

I have heard very little about a crackdown.  I am certain that Osceola, Lake and Polk counties are not going to change their zoning laws outlawing short term rentals.  They are too valuable for the counties from a tax revenue standpoint.  The new and the established vacation home communities are not going to change their covenants and restrictions to stop short term rentals either - it would devastate sales and income for the homeowners or developers, and they are the ones controlling the HOAs.

You might be hearing about complaints from full time residents in areas where some owners are short term renting their homes in residential areas where the HOAs don't allow them.

Hope this helps.

Keith

Deborah -

Welcome to BiggerPockets.  

I am in Orlando, FL, and am quite involved with vacation rentals here.  It's a huge market because of Disney World, Universal Studios and SeaWorld.  If you ever would like any information about this market, please feel free to contact me.

Regarding your goal to build a retirement community in your area - I hope one day you achieve it.  It will be a win-win for everyone involved.

Keith