All Forum Posts by: Shawn McCormick

STR can be tricky in a area that is based on tourism. It is ever-evolving. Orange county (most of greater Orlando) does not allow it, there are very few exceptions. All other areas allow it, but you still have to keep up on local ordinances of individual cities/municipalities and of course every individual community HOA. You can do very well with just a 'regular' house in an average neighborhood. With the growth we are experiencing, not all STR are tourists..so lots of opportunities to capture IT, infrastructure, nurses etc that need longer term housing. Then of course we have the tourist corridor near Disney that has many exclusive resort communities that are literally built to be STR communities complete with impressive amenity centers. I have sold many homes like those and most do very well, but it is more competitive and you do have to stand out.

As far as crime goes, use sites like city-data or trulia. They give a pretty good picture of whats going on. Honestly you can go to google street view and get a good idea of if it looks like an area you would want to live in, own it and if families would find it appealing to rent short term.

@Jake Mackenzie you have a solid budget so you will be able to pretty much pick any area of orlando and find something suitable. If you plan to take work all over, I would suggest staying around the 408 as it gives you access to the turnpike, I-4 and other expressways easily so you can navigate the entire city pretty well. Looking at some areas that will continue to grow and offer appreciation play would be Clermont/Minneola, Apopka, Winter Garden, Lake Nona, Davenport, St. Cloud, Sanford/Deland and a few others.

All of those areas are within 30 minutes of DT, not all have entertainment districts, but nearby areas would. Let me know if this helps and if I can answer anything else for you.

@Jake Mackenzie those are pretty open ended questions. If you are going to live here, we need to know about you too. Where will you be working, are schoold important (kids?), do you travel alot (near airport), are you Disney 'freaks', do you like to bike/hike/outdoor, house/condo/townhome...are you trying to house hack? What is your social scene..foodie, clubs, fitness. These are just some of the questions I would have to give you some direction. And that's not even getting into budget. Our median price for SFR is over $400 until you get pretty far away from Orlando. We have tolls roads everywhere, so just getting around town can be expensive, so that should play into look if you do any commuting at all.

This is 'the city beautiful' so lots of good areas for living, but since I'm licensed, I can't get into suggesting where not to go--LOL. Feel free to reach out if you want some more specific insight because some areas are just more known for being family friendly or full of renters or known for higher crime. So this will depend on where you are in your life, what is the plan to stay in the home, will it eventually become a rental etc.

Best of luck!

 Hi @Zachery Hitchcox Central Florida did see a huge increase in agents since the market starting going up. This has been steadily increasing and although I don't have a specific number, the last I heard we have around 26,000 agents just in Central Florida. It is no surprise that your are running into new(er) agents, but there are plenty of us experienced ones too. Every agent will market themselves as 'investor friendly', but so many don't really know what that means. They just sold a second home to an out of state buyer once and its easy to spin that into 'experience'. 

Happy to have a conversation about the Orlando market with you if you need. Best of luck to you!

@John Rankin Lots of good thoughts and opinions so far. Since you left the specifics of location only to the Southeast, that means a specific target area will get different answers. Say you are looking at Beach towns in Florida...a two bedroom condo may suite you very well. If you are looking at Disney, than a bigger home with great amenities is the way to go. If Georgia in/near the mountains, than a smaller cabin or something secluded with a veiw is what you'll want. Bigger is only better if the destination warrants it. Orlando for example get lots of tourist groups that rent multiple homes at once or youth sports leagues coming for tournaments or foreign families that bring multi generations, so big homes do very well here, the smaller ones far outnumber the large ones and the ADR is very competitive. 

So I would narrow your search to what appeals to you (assuming that you'll want to use it personally too) and go from there. As far as the pathway to LTR/multi, you could always 1031 into those once you are 'done' with the STR or just diversify now and get into both segments.

Best of luck to you. 

 I agree that in our market in Orlando, bigger homes will typically do better and that is just a numbers game, there are far less of 5+ bedroom homes than 2,3,4 ( you are competing against hotels, condotels, condos, townhomes and small single family). If you can get in one of the 'top 10' communities close to Disney, you can/will make money. However, you are basically running a small business and how you take care of the property, respond to guests, level of theming, cleanliness and rates will all have an impact on how well you do. Most are owned by out of state or out of country investors that may not have the time, experience or level of concern needed to be successful. 

As @Jay Breitlow mentioned, he runs a great, full service PM and is only 15% with no contracts. At minimum hire a PM to point out deficiencies in your home, get reviews logged quickly and stabalize a nightly rate strategy that will let you take advantage of peak weeks/months. Our 'season' is all year long, but we do have highs and lows, so looking at nightly rates for $69 a night like you mentioned could be in a community that is not well ammenitized, not close to Disney, not themed or simply during a period of time that was a historically slow week/month. You have to look at these (in Orlando) by the quarter, not by a small snapshot of time while you were doing your research...look at calendars for a whole quarter and average it out. STR are never 'always full' so if you and your family want to use it, you should plan your time there during periods that are slower and take advantage of the guests coming during peak times.

What is your strategy, have a place that you can come to and have it pay for itself the rest of the year, or a place to park some money for awhile or to full out cash flow? If you are looking for great cash flow, you will have to pay upfront. 

Hope this helps.

@Michael Baum I have had many clients purchase and run successful STR here in Orlando. I have a few great PM contacts that I work with and can help run pro formas on properties along with what I can obtain. Most PM's in the short term space are not licensed agents, you will find many LTR property managers will try to help sell client's homes. You will want to interview several PM's to see what they offer, some are more full service than others, some will nickel and dime you, but all will help get you the exposure you need and get you up and running.

Homes here come fully furnished (99%) and most will/can transfer the existing reservations. Some PM companies will try to force you to use them as PM to get the future bookings. That can often lead to a negative experience but should be considered if the bookings provide good revenue for you to get your algorithm and reviews a jump start.

Hope this helps, good luck!

@James R. Copeland I haven't built anything here, but I can attest to the market rents being strong. Obviously there would be considerations such as location, size of units, finishes etc, but lets just say they are 2/2 units and in descent areas. You should get $1800+ for each, so that is $5,400 right there and that would be plenty to cover and cash flow each month. 

I will say that Orange County (most of Orlando) is experiencing long delays in permits, so you will need other housing while its being built. And to be honest, I don't know if a VA loan covers construction to perm loans. You may have to finance it another way and then refi into your VA. I have some great local lenders that could help if you want to talk to them.

Good luck with your goal!

@Bruno L. I will echo the sentiments of those who posted before me. I have helped a few clients analyze some of these and the numbers never work. Unless you plan to get a lot of use out of it and really just want it to pay for itself, it will likely not be an investment, but a write off. Most in Orlando that I know of, allow guests access to amenities if you self manage and you will have to charge them a 'daily resort fee', and to me, that is nickel and diming your guests...no matter how many times you tell them that its' extra, you'll get a bad review saying "we couldn't use the pool unless we paid $XX and that will look bad on you. 

There are several other resort communities with 'regular' condos and have great amenties that I would suggest before going down this road.

Best of luck to you!

@Scott Loud If you plan to invest in your current, local market..I would join your local REIA and start networking, find others that are doing the niche that you are most interested in and take some classes & attend meet ups. There are a lot of shiny objects, some sound easy, some are best when the market is trending in one direction or the other, some are too much of a niche to pursue full time.

It sounds like you want to buy and hold, so find agents, property managers, wholesalers that can help educate you on the areas that make sense, and evaluate properties, maybe start making offers and get over the fears you may have right away. You may also want to meet some lenders or hard money people or build a network of private money lenders that can help you scale. 

Lots more advice will be coming, but hope this helps. Good luck. I'm in Orlando if you ever have questions about your old stomping grounds!