All Forum Posts by: Serena Kim

@Eric Alvarez

For long-term rentals I personally like the Lakeland area. It’s between Orlando and Tampa, it’s a strong rental market and has been steadily appreciating.

I own 3 properties there and have all done very well. You can still find deals with the 1% rule without too much trouble.

Happy to share more information if needed.

Serena

@Louis Zameryka

STRs are for cash flow primarily. As Alice mentioned, if you buy an older one and remodel it then you can build some equity.

Unfortunately in Orlando the multi-family market is very limited, and extremely expensive. You’ll have to look 1hr away from Orlando to find any at a decent price.

@Louis Zameryka

The houses that I own for STR are all in the 220-245k range, 3-4br in no or low HOA communities. But, I also manage them myself.

Regarding a 250k no-HOA house vs a large 5 to 9 bedroom resort house/community, it just depends on your market view. There are 2 schools of thoughts when it comes to STR in FL:

1. Low or no HOA houses - these are usually 3-4br houses in communities with few to no amenities. They are cheap to maintain, fixed costs are low and hence give you a lot of flexibility when it comes to pricing. The disadvantages are that since they are smaller and "cheaper", you have more competition (including hotels at that point), hard to find a property manager that will manage them (they are higher maintenance, you have to take out trash and recycles, etc), and there is a limit to how much you can charge since there is so much competition. With that being said, since most people now prefer Airbnb houses to hotel, they tend to do well as long as your place is well remodeled, unique, and well managed.

2. Large houses in rental communities - these are usually the 5+ bedrooms. I see them as a levered play on the STR market. They usually start in the mid 300s and can go as high as 500k as you well noticed. The monthly HOA fees can be substantial, but you can charge more. On the other hand, your competition is just those other resort houses. Big families and groups will usually prefer these, and can seem more attractive to the "resort" style traveler.

They both have pros and cons, that's why it will depend on your view. Want a starter house that you can manage yourself? Go with a no-HOA one. Want to go "big" on the STR market theme and have a professional property manager? Go with the resort-style house.

Serena

That's awesome! Congrats!!

@Reese Newell I agree 100%. A 5-10min video walkthrough should do it, and easier than taking a bunch of specific pictures 

@Reese Newell

I like this idea a lot. Our goal is to be able to manage the business from an iPad anywhere in the world, and for that we have to remove ourselves form the equation.

Luckily we now have a great cleaning team. Over the past 20+ reservations everyone has loved the cleanliness.

I’m going to speak with our cleaning team to see how best to implement.

Thanks Reese!

Hey Paul - interesting strategy, guessing your view is that interest rates will remain very low for the foreseeable future and real estate properties will do well in the Orlando area. I have the same view, but would be curious on your motivation.

To better understand your goal:

• What's your budget for the SFR?
• Neighborhood (class A, B, C D)
• Are you open to condos/townhomes? (I've found them to be great long-term buy-and-hold due to the minimal maintenance)
• Do you have a zipcode you've looked into?
• Any preference for the property? (for example, I tend to buy only SFR with pools)

Serena

@Raymond Santos @Giancarlo Sarmiento

I did forget the PMI and Taxes in my calculations. But the Capex and Maintenance do seem high. Are they pre-populated as in they are the historical numbers for the property?

At least for my properties (STR houses), the maintenance expenses are not even $200 a month:

• Lawn maintenance: $60-75
• Pest control: $30
• Pool (which I don't know if it would apply to your property): $65-90 depending
• HVAC maintenance: $70 every 6 months (~15 a month)

Capex of $3,000 a year means a bunch of appliances are breaking down continuously, or the house is in dire conditions. Vacancy of over 2k means you have turnover of tenants almost every year and takes close to a month to find a new one. That has definitely not been my experience in Orlando (tenants have to give me at least 30 days heads up that they are moving, I put it up on Zillow and usually by the time they leave I have a new tenant coming in. Of course, a PM company would charge you a leasing fee).

Conservative numbers are always recommended, you want to hope for the best and plan for the worst. 
  

@Raymond Santos

Numbers seem a bit too conservative

I don't know the conditions of the property, but if I was running the numbers, I would use the following:

Monthly:

Revenue = $2,550

Expenses:

• Mortgage: $1,347 (300k at 3.5%)
• Insurance: 150 (1,800 a year)
• Maintenance: 200 (should cover lawnmowing, pest control, hvac, and a few other things)
• CapEx: 200 (this one is a wildcard, but 200 is very conservative from my experience)
• PM: 250
• Vacancy: 107 (half a month a year)
• Total Expenses: $2,254

You net $250 a month. Not great, not terrible. If you were to manage it yourself then it would be closer to $500 a month

Hope that helps. 

Serena

@Michael Stokes Thanks for your comment. I'm curious, what systems do you use to manager your STR?

The STR that I have are fairly large houses (3–4br) with pools. What I've noticed is that back in 2018-2019, when I was managing them from NY through my phone as well, people were ok with little details not being perfect. Now in the COVID world, guests are extremely detail oriented.

This year I spent a ton of time remodeling the homes, creating a system (checklists for cleaning team, signs everywhere in the house), switched cleaning team, and eventually preparing to allow the business to run by itself. For now I personally inspect after each check out, and make sure that everything is up to the highest standards. No one cares about your home like you do.

I use the following to automate as much as possible:

August SmartLock

Nest Thermostats

Smartbnb for communication with guests and cleaning team

BeyondPricing for calendar pricing