All Forum Posts by: Shawn McCormick

@Armand Dufrane depending on where exactly your STR will be will help determine answers to your question. If you have beachside condo or an 8 bedroom near Disney will be much different. I focus on the Disney area and the homes here come already furnished and generally the future bookings will convey. The communities that I recommend are all within a 10 mile radius of Disney, are guard gated and fully amenitized, so they are built specifically for STR. There are plenty of smaller neighborhoods surrounding that allow STR or LTR that you could purchase if having a second exity strategy is important to you.

For your cash flow question, again depends on where you are and to what level your home stands out and what you offer that others can't/don't. As crowded as Orlando is with STR homes, we also have over 70 million people coming thru the city a year so even people not trying very hard are typically doing well. But if you do some homework, buy right and keep up the home and on your technology, you can do very well.

Switching from STR to LTR does seem inefficient, usually, you would go the other way to improve cash flow. However, having that as a plan is not a bad idea. When the pandemic hit, many STR owners turned them into LTR because travel halted and they just wanted to cover expenses at that point, others simply sold their units.

Best of luck to you.

 Hey @Steph Prince, there are literally dozens of posts concerning STR in Orlando. I chime in on as many as possible and hopefully provide some valuable answers and things to consider. Let me know if there is anything in particular you want to know about. I am 15 minutes from Disney and do a lot in that area.

Best of luck!

@zach 

@Zach Martin congrats on taking steps toward controlling your freedom and financial future and welcome to the forums. You can search for just about any topic here and find local meet ups and REIA's (happy to suggest a few).

I can echo what some of the others have said as far as theming, but that really comes into play based on what community you are in and how many bedrooms you have and if there is a garage. You wouldn't theme out a 2 bedroom condo and most townhomes don't have garages, so you would be quite limited...so then it comes down to budget. Prices have stayed stagnet in the STR market here, but the cost of entry is still fairly high. You will have to run numbers based on the size of home you desire/can afford and then consider how marketable it is in its current condition or if you need to infuse some cash to get it well themed and stand out. The STR homes will come fully furnished and you usually get to keep all future bookings, so that will help with having cash flow from day one, but can make it difficult to schedule renovations or theming projects.

I'd be happy to go over more from my perspective if you would like. Best of luck!

@Joe Stout I am in the camp of going there and doing it yourself to get a feel for the house and spend a few nights in it so you learn where things are by memory for when a guest calls and you can guide them what is where and how it works..even simple things like light switches (label them). You should also clean the house after you've stayed there so you know how to price cleaners.

In my market, most units already come furnished if they are in the tourist district. But in your case, I would have everything at your house or in a storage facility so you can get in there, get set up and get your listing live as soon as possible. I would also suggest hiring a local photographer (ask your realtor) to shoot quality photos, that is essential! Your agent may also be able to point you to a professional home stager that could consult. The relatively small upfront cost of those two things will give you time to focus on all the behind the scenes stuff to get up and running (cable, remotes, alarms, door locks, yard maintenance, pool cleaners, house cleaners, handyman, calendars, pricing and all of the other things you need to get done. 

Best of luck! 

@Nhi Le Welcome and congrats on getting started. I can only speak of Orlando out of the two you mentioned. Cash flow is tough here, although rentals rates are high, purchase prices have outpaced rents. We are fighting a rent control bill right now. If you go to outlying counties like Volusia, Polk and Lake, you could pick up some decent properties for your budget, but the tenant pool would be much different. Anything you find in your budget here will likely only be a duplex, not a tri or quad and be prepared for a big cap ex budget due to age and condition. 

Short term rentals here do very well if you have the right mind set and willing to work at it, but again, for you budget, you will only get condos and some townhouses that will be in well-performing areas near Disney. Single-family will be in the high 400's to start.

Hope this helps, best of luck!

@Alexis York. Your best bet would be to talk to a local lender where you plan to purchase and have them look over your income and how much you are actually claiming. I spent many years in the restaurant business and I always tried to teach my employees to claim more tips for reasons you are experiencing, but the temptation of quick cash was generally too much. 

It may take some time to get you on track to do conventional financing, but there are options out there like DSCR, bank statement and income only that may be options. They do come with higher rates typically, but fit the bill for what will get you off the sidelines and on to your second property. I have a few great lenders that would be happy to at least have a conversation with you to get things started.

As for the market, the best time to buy is always 5 years ago. So waiting for the market gods to align with better rates, more inventory, less competition and falling prices is never a good strategy. I'd be happy to go over whats happening in the Central Florida market (Orlando and surrounding areas) if that is something you are considering. 

Best of luck to you!

I agree with Ryan. When covid first started, many of the owners of STR here either put a long term tenant in there just to cover their nut or sold them (and are now kicking themselves!!...double the value now). Yes, most all of these communities do allow for LTR, but the infrastructure is not conducive to it. Most have a CDD to help offset the fact that there aren't full time residents contributing to the local economy so less grocery/retail stores, schools are further away and especially with the bigger homes...you will usually have a few kids, but no neighbors to play with or socialize.

I actually have one client that has a LTR in a 9 bedroom in Solara that is allowing his tenant to arbitage his home for Airbnb. He is getting $4200 month. Like @Ryan Moyer said, at that price, it just doesn't make sense. The flip side is that at least if you have a bigger home, you can always fill it up with guests. So if you have an 8 bedroom, you can list it as a 3, 4, 5, 6, 7 or 8 bedroom and keep it full, but at a lower ADR. If you have a small unit, its a race to the bottom with the thousands of others that are just trying to stay afloat.

@Arthur Chu There are a ton of threads in here about the same as you are asking, your questions and more will be answered. As Ryan said, we have quite a few STR only communities with amenities and locations that are made for tourism and are zoned specifically for rentals. If you go outside of those, you're going to risk losing the attractiveness of why people come here. They want to be close to the theme parks and have a well themed house. Since we don't have ocean/mountain views or unique locations, the community should have great amentities (like Championsgate, Solara, Solterra, and Storey Lake to name a few) and also have themed bedrooms and a converted garage.

To address your saturation issues, yes, we do have tens of thousands of STR homes, but we also get over 70 million visitors a year. Finding the niche size will also be important, smaller ones (2-4 beds) will be competing against hotels, time shares, condotels, and townhomes and sometimes it can be a race to the bottom with ADR. So keep a clean home with amazing photos that is close to Disney and is well themed and you won't get caught in that trap.

Best of luck!

@Serge DuLaudAllemans I will send you a message

@Endory Neves Looks like you are in Orlando. You are in the middle of one of the absolute best places to be. You could pick up units beachside, East or West and/or stay right near the theme parks. The Disney area has many STR communities that are purpose built for that reason and it is proven, not nearly as much data to collect or city/county rules to sift through. You will have to figure out what your budget allows and make sure that specific size/type/location of home performs well and isn't in a more saturated field.

Best of luck to you.