All Forum Posts by: Serena Kim

@Amanda Schneider

Our 3-4br (zipcodes 34746 and 34747) are averaging close to $200 a night, 90%+ occupancy rate. For the summer it's closer to $225-250 and some nights $300+. Pre-pandemic that average was around $150. We've improved quite a bit our strategies, but still, rates are significantly higher. No HOA in 3 of them, 200 a month on the other one.

@Jeyo Punnakottil

Look for comparables and make sure your tenants are paying less than similar. This year I raised the rent on my tenants and explained that over the past year HOA and taxes went up. At the same time, since they were excellent, I wanted to make sure they were still paying less than comparable properties. They quickly signed.

@Alex Smith

If you think in 3yrs prices will be lower, then best to not buy. My personal thought is that prices will be higher. Interest rates are still low, there is a ton of cash in the sidelines, policy will remain accommodative, and taxes will probably move higher (making real estate more attractive).

Run the numbers first and if it makes sense go for it. Better to buy and wait than wait and buy real estate.

@Luke Carl

Here in Orlando/Kissimmee we’ve seen the same with the “new rich” thanks to stimulus. But at the same time we’ve done a few things to avoid issues:

- we have cameras on all of our properties

- we remind guests when they book and before check-in that we have zero tolerance for parties and guests that are not informed

- signs all over the properties with the rules and how to use things

- we know the neighbors and they call us asap if there is an issue

Back in 3Q’20 it was worse and the rates were very low.

We thought about installing the Minut noise detector, but haven’t need it so far. Haven’t had issues with reviews either. Guests are a bit messier than in the past, but we are charging around 25-50% higher rates than usual, so just call it cost of doing business.

@Shawn Green

What everyone here has said is very true. My four Orlando/Kissimmee STR occupancies' have been > 90% over the past few months, and already booked over 90% for the next two months. I keep increasing prices to levels that would have been impossible 1-2 years ago, and still getting booked. As an example, my oldest 3Br grossed $42k in 2019, $35k in 2020, and should do well above $55k in 2021 at this pace.

I self-manage my own properties, but it took a long time to get a system and people to work well. If you don't like dealing with all the minutiae that comes with working with guests and big houses, I would highly recommend a property manager. Just make sure you are listed at a minimum in Airbnb and VRBO (which used to be < 5% of my business, now growing to 10-20%). 

Now, expenses:

Towels and beddings are one of my main costs - keep 3 sets per bed/person and replace every 1-2 months

Furniture - I've been lucky, haven't had to replace any big piece of furniture (I've had guests brake entrance doors and and other wild things, but those are 1 in 100)

Camera - putting a camera in front of the house was a game changer for me! Amazing how well people behave once they know they may be recorded

Repairs - HVACs seem to have a system for breaking every summer during the hottest days. Expect $200-500 bill in August, even when you give it the semi-annual maintenance. Same with pool water heater. From our 4 houses, 2 had issues this winter (another $200-400 bill). 

Appliances don't seem to break that often. Either the washer or dryer can be expected to malfunction given the very heavy use cleaning bedsheets and towels after every check-out. And guests use it as well, and they rarely clean the dryer vents.

Maybe too much detail, but hopefully this helps out!

Serena

@Paige Hutchinson

From my experience it’s not too difficult to run some numbers. For central Florida in str houses between 250k to 350k (which is a bulk of the inventory), I run the numbers with 5 scenarios (this would be for a simple 3-4br house):

Very weak $100 a night x 20 nights per month

Weak $120 a night x 22 nights

Normal $135 a night x 24

Good $150 a night x 25

Above avg $175 a night x 27

Resort houses would have higher rates. January through May would be between Normal and good, August through October Weak to Normal, then December Above Avg.

Expenses:

HOA (varies, but assume 200)

Electricity (250-300)

Water (50-75)

Internet (60)

Landscaping (may be in HOA or 75)

Pool (80)

CAPEX (100)

Mortgage, insurance and tax (varies)

Best research you could do is imagining you are a guest, and checking the area you are looking for. Try to get a sense for the market. Are houses that allow pets charging more? What’s the premium for a pool? Game room or no game room? Etc.

Hope that helps, feel free to reach out with any questions.

Serena

@Ryan Lam in Orlando, for a first rental you should probably look at a condo as they are cheaper and wouldn't have to worry about exterior maintenance. Houses are hard to come by (better luck looking outside of Orlando. Davenport is a good area, similarly Lakeland). 

Here are the numbers on one of mine (but similar numbers apply generally):

Current Market Price: $178k (I bought it for less, but just showing how numbers would look right now)

Monthly numbers:
Rental Revenue: $1,500
P&I = $680 (20% down at 4%)
Insurance: $42
Property Tax: $192
HOA: $353 (covers water and a bunch of amenities, security, etc)

Net: $233

To that you only have to add semi-annual HVAC maintenance ($60 each time). With condos my capex expenses have been very minimal (the dryer and a plumber every few years have been the most common expenses). 

@Natasha Jansen that's probably the highest risk with short-term rentals, and you probably experienced this as well in mid-2020 when they banned them in Florida temporarily. With that being said, here in Florida it's too big of an economy to shut down abruptly like it has been done in some big cities. In the end, as long as there is plenty of affordable housing, the government won't mind taking the extra revenue. And I don't think hotels have been too impacted, since short-term rentals cater to a slightly different customer. I could be very wrong on this, let's see

@Andrew Smith I think it's the "common knowledge" that we'll see a wave of foreclosures this year (2021). I've started to see a few, but I don't think it will hurt the market. There is a ton of demand, still low inventories, and too much cash in the sidelines. My guess is that there will be some opportunities in that segment, but not something I'm actively looking into anymore.  

@Al Williamson totally true. More recently I've been playing with pricing strategies across Airbnb and VRBO and have been able to land a few 1-month reservations. As you mentioned, same income (sometimes even more), significantly less hassle. Love the idea