Florida's Gulf Coast is a popular vacation destination, most known for its beautiful beaches and numerous attractions. If you're considering buying a short-term rental property on the Gulf Coast, there are a few key things we learned when we went through this process and ultimately bought our first short-term rental property in Palmetto, Florida.
Location: Before we put in an offer on our place, we were very skeptical about the location of our property. It's about 25 minutes to the beach, in a pretty rural area between Sarasota and Tampa, Florida. To put our minds at ease, we researched other short-term rental properties in the immediate area on Airbnb and VRBO. We found that there were, in fact, a handful of other nearby properties that had several reviews, indicating that people had stayed there before. We also found the silver lining of the more remote location and wrote it into our listing. It's quiet and away from the trafficky hustle and bustle nearer to the beaches. It's centrally located between Sarasota and Tampa, so guests can easily get to either metropolitan area, rather than being confined to one. We have not found the location to be problematic in getting bookings. In fact, our occupancy rate is much higher than either of us were expecting, especially during year one.
We never tire of these beautiful Gulf Coast sunsets.
Property type: One very important thing to keep in mind as you look for a short-term rental investment property is that you can't do a short-term rental just anywhere. In fact, there may be legal requirements or even prohibitions for short-term rentals in the area where you are considering buying a property. Research and understand any local ordinances or regulations that may impact your investment. Even if short-term rentals are allowed in a specific jurisdiction, it may not be allowed in your desired neighborhood - especially if there's an HOA (home owners association). HOAs have the authority to enforce rules and regulations that are designed to maintain the appearance, safety, and value of the community. These rules may cover a wide range of issues, including property maintenance, architectural standards, and the use of common areas. One of those rules might be a ban on short-term rentals (and maybe even on long-term rentals). While some HOAs might allow short-term rentals, we didn't want to risk it. So we set our Zillow filter settings to weed out any properties with monthly HOA dues to ensure we were only looking at properties not under the jurisdiction of an HOA. But not having an HOA comes with risks, of course. Would the neighbors do crazy things, like build a small chicken farm in their front yard or practice the bagpipes outside between 7am and 10pm? If there aren't really any rules for how neighbors conduct themselves and no easy path to resolving conflicts, are we getting in over our heads? Bad neighbors are a risk, no matter where you move. And, if we're being honest, buying a home and deciding to use it as a short-term rental comes with some risk. What we've come to find is that short-term guests aren't fixated on what our neighbors are doing. They are there to make the most of their vacation, so if the neighbor has an RV in their front yard, guests aren't likely to be offended by that, because they're planning to leave in a week, anyway. In other words, what your neighbors are doing is probably way more of a concern for you than it will be for your guests. Within reason, of course.
Property management: We decided that we wanted to manage our property ourselves. That means we: -Set up the entire house (bought all of the furniture and amenities, on a set budget) -Build all of the furniture -Make improvements to the physical property to ensure it's ready for guests (painting, changing out locks, changing out plumbing and fixtures, etc.) -Arrange to have someone accept deliveries for us when we aren't there (99% of the time, since we live 17 hours away from our short-term rental) -Keep track of all our expenditures -Set up all accounts (business checking, business credit card, LLC, insurance, etc.) -Set up our listings on booking sites like Airbnb and VRBO -Hired an on-location host to help us manage our property virtually -Hired lawn and pool maintenance services -Hired a cleaning service -Coordinate our teams' schedules (landscaping, pool, housekeeping, etc.) and pay them -Handle all routine house and property maintenance -Handle all unanticipated house and property maintenance (things break!) -Set up house rules -Communicate with guests before, during and after their stays -Troubleshoot with guests -Handle all marketing and advertising for our property (website, listings, social media, communications, visual assets, etc.) -Pay taxes -And so much more! As we're typing this out, it's actually becoming quite mind-boggling how much we do! Getting this first property under our belts has taught us so much and put us ahead of the learning curve as we set out to expand our portfolio of short-term rentals management. But we can totally see how this list is intimidating, and you might decide you're not ready to manage the property yourself - at least, not right now. If you want to invest in a short-term rental but you want to outsource the day-to-day tedium, you'll need to find a property management company who can do all of this for you while you still make enough of a profit to make it worth your while.
When you manage your own short-term rental, you have to do the unglamorous work, too, like building this full-over-full bunk bed (with a rolling trundle underneath [not pictured]).
Buying a short-term rental property on Florida's Gulf Coast has been such a rewarding investment and adventure for our family, but it's important to do your due diligence and carefully consider these factors to increase your chances of success.
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