All Forum Posts by: Melissa Wesling

Where is the potential STR located? I agree with Colleen, these numbers will depend a lot on your market, competition, and how many guests you can sleep. For example, if you are buying a property near Disney you will want to spend much more for updated/upgraded decor and likely items to make the house a theme.

@Karina Oliveira I highly recommend Avery and the Short Term Shop, she is amazing! It sounds like you have a great plan! 

Happy house hunting! 

@Karina Oliveira Thank you for reaching out!  

This is a tough question to answer because there are many variables that come into play. The best markets for short-term vacation rentals are hard to pinpoint because it can depend on the time you buy, where you buy, and how much you spend. There are studies out there that analyze the best vacation rental markets and the answer somewhat varies based on what is being measured.

I think there is an opportunity for high return in every market. It is often dependent on the home you select. You want to look in a market that has legal approval for short-term rental and draws visitors (are there reasons to visit such as attractions, nearby cities, outdoor life, lake, beach, mountains, etc?).

Short-term vacation rentals are also a lifestyle investment, so if there is somewhere you enjoy visiting, I recommend starting there, it doesn’t have to be completely about the financials.

Nevertheless, where you invest is also highly dependent on your budget. Destin can have very high returns, but you also need a higher budget to enter the market and have a successful vacation rental property. Gatlinburg is on fire because the properties can accommodate nearly any budget and it’s a great place to visit due to many reasons like the rural aspect. Rural or naturistic areas that are within 300 miles from a guest’s home/drivable are popular markets right now due to the pandemic (I don’t think this will change anytime soon). Orlando draws international, multigenerational families for the parks (it's good that your brother purchased a 6bed/5bath home, because 5+ bedrooms is highly sought after by guests there). 

I personally invest in short-term rentals in southwest Michigan because I live in the Midwest, it is an area that I frequently visit, we find our returns are strong, and they have approval for short-term rentals .

You mentioned tax implications when selling a rental property--you may consider a 1031 exchange to defer capital gains.  Consult your attorney first as there are many rules with it.  You would also have to purchase another investment property within the United States, so properties in Mexico wouldn't qualify.  Best of luck! 

  

I'm not a tax attorney, but I'll offer what we did personally with LLCs. We obtained a LLC shortly after we purchased our first vacation rental property, but before we began renting it (this was in 2007). We have since added two more STRs to that LLC (all in the same state). We also have a separate LLC for our long-term rentals. I do know some investors prefer to have one LLC per property. A tax attorney is the best person to consult with about the transfer, some LLC rules vary per state.

@Wyatt A Brady the recent studies are predicting that travel tends will stay the same, at least through the summer, with shorter distance domestic travel to remote locations rather than urban.  Vrbo reported that 62% of respondents plan to travel to a "outdoorsy" location (I assume this means both beach and ski), 82% of families have already planned their 2021 vacations with a 25% surge in remote locations.  

I personally don't think the bookings will drop-off.  Even if some begin international travel, the people who weren't traveling at all last year will begin to ease back into travel to domestic markets.  I think the remote working trend will also continue for many at least through the first half of the year, keeping the "flexcation" trend going.  I think you are safe in a "ski/outdoorsy" market, especially if it's an area that is already drawing in tourists!  

@Kristyn Morgan @Michael Stokes searching for a property to use as a short-term vacation rental property in the Disney area can be complex, so it is recommended to use a Realtor that is experienced and knowledgeable about the rental rules and regulations in the area to help you find a property in a rental friendly neighborhood.  You have requested Realtor contacts, and I have a recommendation so reach out if you are still looking!  To compete, you'll need a property that has updated amenities and located within a few miles from the parks and a property with a south facing lot seems to book at a higher rate :) 

@Patrick Enright Great choice, the FL panhandle was recently voted #1 for best ROI on short-term vacation rental properties in a study completed by Rented, Inc. I am not aware of a platform for wholesaling vacation rentals, but I am happy to chat about the number crunching if you'd like to reach out!

@Michael Stokes in the Orlando area, anything within a few miles of Disney is considered prime real estate for vacation rentals. If you are concerned with the maintenance factors of a private pool, you may want to consider a resort-like neighborhood that has pool amenities included. However, as mentioned above, be aware of the HOA costs, rules and regulations. There are certain neighborhoods in the Orlando area that are not rental friendly. It is important to have a realtor that is knowledgeable of the short-term vacation rental rules and regulations in the area to help you find the right property that meets your investment goals. I have a recommendation if you are looking! Best of luck with your search.

I would add an extra bedroom as long as you currently have a common living space already.  We charge more for our homes that have more bedrooms.