I am thinking about buying one in FL and curious to hear about others experience. How do you market? How profitable has it been? What do you pay for management?
@jawollbrink I have a vacation rental in Fort Walton Beach, Florida. The biggest hurdle, in my opinion, is property management. Most corporate PMs charge up to 30% in resort areas, effectively killing your profit. I have a lady who charges 15%, which is still a lot, but she has been a godsend when it comes to managing the renovations, getting it marketed on Airbnb, and communicating with tenants. Even with her fee (and the insane cost of insurance near the beach), it crushes-- I never could’ve imagined it would be more profitable than my five-plex. It even did well during COVID, as we just opened it up for the first few months to a longer-term tenant on a military training assignment. It also helped to be in a state that didn’t engage in an East Berlin-style shutdown… so in my experience, it has been great because I bought right (using a 10% down, vacation home loan) and have a rockstar manager with outstanding attention to detail.
These days, there are more and more online resources that allow you to self-manage from far away. If my manager ever closes shop, I’ll be going that route. I’m happy to answer more specific questions if you have any.
@jawollbrink I take lots of podcast notes. Apologize for the wall of words to follow, but if anyone’s interested, these are my Short Term Rental notes…
Book through Vrbo and/or Airbnb. You can use Google Calendar for appointments, as it syncs with gmail. It allows you to share booking schedules with partners, cleaning crew, etc.
Expenses to Account For:
Airbnb charges a 3-5% service fee every time a booking is completed.
HomeAway charges hosts for listing homes on the site. People planning to use the HomeAway site regularly can pay $349.00 annually to advertise their property and are not charged a commission for each booking.
Vrbo fee if you also list on that site.
Allowance for maintenance (7-10%) and CAPEX (10%). If there’s an HOA, you might add another 10% to a normal CAPEX for assessments.
When running numbers, calculate whether you could break even with a 30% management fee just in case.
Account for wear and tear, replacement of furniture, dishes, lamps, etc.
Cleaning fee (billed to tenants)
Cleaning service can be your eyes and ears.
Occupancy tax (billed to tenants and collected by Vrbo). Make sure there’s not a hotel occupancy tax.
Property insurance
You need to get short-term rental property insurance for Airbnb.
CBIZ Vacation Rental Insurance
Commercial insurance - around $770/year
HOA/Assessments
Utilities (electricity, sewer/water, cable, wifi)
“Beach service” (beach vacation rentals)
Look into door code system (Kaba, August Smart Locks, erentallock.com, ResortLock/RemoteLock)
For the state of Florida, you must pay:
Florida Transient Rental Tax - 6% of listing price
Florida Discretionary Sales Surtax - .5% - 1.5% of listing price
County Tourist Development Tax - location dependent - 2% - 5% of listing price (Okaloosa, not Bay)
On the Gulf Coast, consider hail/wind insurance.
Back-of-Napkin Approximation for Bookings (Northwest FL):
June, July, and August: 25 bookings per month
100 bookings or more for the rest of the year
November through February are slow
Furnishing the Unit:
Check out rent-to-own furniture.
Management/Data Resources:
TurnoverBnb - allows you to remotely manage cleaners from an app - they have pre-approved cleaners, or you can bring on your own
iGMS - vacation rental software - allows you to manage the vacation rental business, automate emails, guest messaging, has an app.
Wheelhouse - helps you figure out/automate pricing for Airbnb rentals and adjusts pricing depending on how far out the rental timeline is.
Smartbnb.io - property management platform - automates a lot of the messaging
Local property management - rented.com, guesty.com
Freetobook - free online booking platform
Ownerreservations.com - vacation rental software that manages your channel listings
Finding Local Cleaning Services:
Thumbtack.com
Taskrabbit.com
Handy.com
Angie’s List
Nextdoor.com
Further reading:
https://www.biggerpockets.com/blog/6-steps-started-airbnb