Advice Please: Snowbird Wannabee Owner and Partial Year Rental/ROI

[Villager2be]

Hi All, thrilled to have found this forum, looks like a great source for exchanging ideas/info!

My wife and I are from NJ, visited last month and decided we'd love to buy a place in Eastport that we can enjoy for a couple of the snowbird months, but also be able to recoup as much of our expenses by doing short term rentals the rest of the year (most likely using a management company).

We are considering either a 3 BR Cottage or one of the Patio Villas, ideally we would love to break even after factoring in lost interest on our cash purchase (not sure break even is possible, given rental supply/demand outside of snowbird season).

That said, would greatly appreciate if those in the know, would please offer their view and possibly include thoughts on the following:

1. Does one of these models make for a better short term rental place, i.e. does one typically provide a better return on investment?
2. Is there decent enough demand in the March through December period or does supply greatly outweigh demand? Is it realistic to think we should be able to break even?
3. Do you get a good return on the added purchase cost of a 3rd bedroom, or most short term renters don't need the 3rd bedroom, i.e. 3/2s rent for similar $ as 2/2s?

(I understand and expect our first year will be challenging since Eastport is still being built)

Thanks so much! :ho:

[Toymeister]

RoI is best on a patio villa. It is simple math a designer costs 2x but yields 1.3 more in rent for the prime season. Math is similiar for larger villas and smaller 3 br homes.

[asianthree]

Hi All, thrilled to have found this forum, looks like a great source for exchanging ideas/info!

My wife and I are from NJ, visited last month and decided we'd love to buy a place in Eastport that we can enjoy for a couple of the snowbird months, but also be able to recoup as much of our expenses by doing short term rentals the rest of the year (most likely using a management company).

We are considering either a 3 BR Cottage or one of the Patio Villas, ideally we would love to break even after factoring in lost interest on our cash purchase (not sure break even is possible, given rental supply/demand outside of snowbird season).

That said, would greatly appreciate if those in the know, would please offer their view and possibly include thoughts on the following:

1. Does one of these models make for a better short term rental place, i.e. does one typically provide a better return on investment?
2. Is there decent enough demand in the March through December period or does supply greatly outweigh demand? Is it realistic to think we should be able to break even?
3. Do you get a good return on the added purchase cost of a 3rd bedroom, or most short term renters don't need the 3rd bedroom, i.e. 3/2s rent for similar $ as 2/2s?

(I understand and expect our first year will be challenging since Eastport is still being built)

Thanks so much! :ho:

So you ever plan on living in the house, or is it investment property? We have owned PV, Cottage, Designer’s and a Premier. So basically all of the house venues.

Renting all but the Premier.

PV, Cottage, Designer all rented with zero complications, and for as many months as needed. From short term 4months to long term (12) months unfurnished.

We chose to rent 2 long term so not much money start up (no furniture tenet pays utilities, you pay amenities, water, lawn care)

When selling Cottage sold 24hours to couple who were going to live in it. PV sold in 30days as investment.

If you plan on retiring in that home buy for your needs. If you plan on just investing, buy what is the best deal.,if you are only using for personal use less than couple months rent something else while you make income on investment

[Villager2be]

So you ever plan on living in the house, or is it investment property? We have owned PV, Cottage, Designer’s and a Premier. So basically all of the house venues.

PV, Cottage, Designer all rented with zero complications, and for as many months as needed. From short term 4months to long term (12) months unfurnished.
.....
If you plan on retiring in that home buy for your needs. If you plan on just investing, buy what is the best deal.,if you are only using for personal use less than couple months rent something else while you make income on investment

For now we plan to live in it at least the months of Jan and Feb for now, potentially more in future years. So it should be easy to get short term guests even in the summer/fall months, and would you guess I could break even (more or less) with those ten months of income - assuming I can buy a 3BR Cottage in the low 300s? If we instead did as you suggest and just rented a place for us and leased out our place full time, what time of ROI cash flow would you expect on a 3 BR Cottage like this? (much appreciated!)

[Villager2be]

RoI is best on a patio villa. It is simple math a designer costs 2x but yields 1.3 more in rent for the prime season. Math is similiar for larger villas and smaller 3 br homes.

Makes sense, thank you! Any idea what type of cash flow to expect on a home in the $250k-$300 range? I should have no issues renting in the summer and fall months? Would you say the demand is sufficient, even for those less busy months?

[BrianL99]

Hi All, thrilled to have found this forum, looks like a great source for exchanging ideas/info!

My wife and I are from NJ, visited last month and decided we'd love to buy a place in Eastport that we can enjoy for a couple of the snowbird months, but also be able to recoup as much of our expenses by doing short term rentals the rest of the year (most likely using a management company).

We are considering either a 3 BR Cottage or one of the Patio Villas, ideally we would love to break even after factoring in lost interest on our cash purchase (not sure break even is possible, given rental supply/demand outside of snowbird season).

That said, would greatly appreciate if those in the know, would please offer their view and possibly include thoughts on the following:

1. Does one of these models make for a better short term rental place, i.e. does one typically provide a better return on investment?
2. Is there decent enough demand in the March through December period or does supply greatly outweigh demand? Is it realistic to think we should be able to break even?
3. Do you get a good return on the added purchase cost of a 3rd bedroom, or most short term renters don't need the 3rd bedroom, i.e. 3/2s rent for similar $ as 2/2s?

(I understand and expect our first year will be challenging since Eastport is still being built)

Thanks so much! :ho:


That's great. The Villages needs more Short Term Rentals. It's wonderful for the neighborhoods. At least it's in the South, so no one really cares if there's another STR down there.

[Papa_lecki]

Pretty sure a management company will require you to rent at least one of the peak months, they dont make much money on short terms, and they are a lot of work.

[tophcfa]

If by short term rental you mean by the month, I hope it works for ya. If you mean by the week, or worst yet by the night, think about what you’re doing to your neighbors who expect to live in a quiet 55+ community and shame on you. Also, if you’re looking to snowbird for two consecutive winter months, consider either December and January, or February and March. By choosing January and February, you are blocking out two consecutive rental months during the four prime rental month season.

[Toymeister]

Makes sense, thank you! Any idea what type of cash flow to expect on a home in the $250k-$300 range? I should have no issues renting in the summer and fall months? Would you say the demand is sufficient, even for those less busy months?

With good marketing and pricing you can rent December to April, five months. With a less desirable location and average marketing you can count on Jan-March.

With some luck and fantastic marketing you could have 85% ocupancy but that is fairly rare. I have done this, it did take some work. The simple math of cash in, cash out and considering opportunity costs (forgetting appreciation and taxes) it was a break even situation.

[Raywatkins]

We are Brits - so can only stay in the US for 6 months each year. We started out along the lines of trying to cover our costs through renting year round when we were not staying.
Eventually we realised that we were getting around 80% of our costs covered from about 3 rentals per year. The first was the Jan thru March period (high season). It’s seems just now you can charge just about what you want and get someone to pay. But a word of caution, our home is situated mid way between Lake Sumter and Spanish Springs. So our success rate may be through location.
The second rental is for April.
These two periods are now regular returners so no great concern over their looking after the house properly.
The third rental is over Xmas but ending no later than 30th Dec.
We did get enough rental income during the summer, but they were all short term (normally a week). They were the least tidy, caused most damage and gave us the most headaches.
We have come to realise that over the 8 years we have owned our home, the value of the house has increased, each year, by far more than the annual costs.
We are fortunate that our income and savings/investments, allow us to take the hit on lower rentals. We also realised that our costs were lower as a result, and over the last couple of years we have only had to cover around 10-12% of the yearly costs. For us that’s about $3000 per year.
So, best advice we can give is to think about location, starting with where you want to be. Then see what rentals might be possible, by looking at the nearest developed area and what other renters are charging. You can do that by going on the various sites and looking at rates in those areas.
Once you have a fix on the possible rates at various times of the year, for the nearest locations, you can work on your costs. Don’t just take what The Villages say in their blurb. We found lots of other costs were necessary.
Then plan your strategy.
If you want to know more - DM me. Happy to help.
Ray

[karenzeee]

Explore the statistics on Rent From A Villager's site. The charts present real-time data reflecting renters' preferences over the past 30 days. It will give you an idea of the area, village, home type, number of bedrooms, bathrooms and more that renters are searching for! You might find this helpful when deciding the area and type of home to purchase for a rental. Visit rentfromavillager.com/stats (http://www.rentfromavillager.com/stats)
:thumbup:

[bowlingal]

Don't forget the very high bond and taxes in that area. Better off going further north and buying pre-owned. If you check the Daily Sun, you will see tons of houses south of 44 for sale already....you must ask yourself why???

[Altawood]

It’s simple math.
You just need to be able to carry the monthly costs plus some additional $$ for ROI. Your total carrying costs for a cash purchase will be in the range of $1800/mo plus a maintenance reserve and a 20% reduction in rental income for management fees.

For now we plan to live in it at least the months of Jan and Feb for now, potentially more in future years. So it should be easy to get short term guests even in the summer/fall months, and would you guess I could break even (more or less) with those ten months of income - assuming I can buy a 3BR Cottage in the low 300s? If we instead did as you suggest and just rented a place for us and leased out our place full time, what time of ROI cash flow would you expect on a 3 BR Cottage like this? (much appreciated!)

[Rainger99]

There are a lot of homes for rent!

Rent From A Villager | Rental Homes in The Villages Florida | Advertise Your Village Rental (https://www.rentfromavillager.com/map)

[GizmoWhiskers]

That's great. The Villages needs more Short Term Rentals. It's wonderful for the neighborhoods. At least it's in the South, so no one really cares if there's another STR down there.
Right? and "snowbirds" come down and wonder why the golf courses look like s÷@t, they can't get t-times, their yards look like hell, the insides of their houses are beat up.

My parents HAD an ABnB nextdoor up in the LSL area. It's not a "hotel" anymore. The owner recently seemed surprised by the condition of their "managed" home. Just had to LMAO on that "dah" moment.

The Villages, the largest tourist golf resort hotel spot in the US right??

[TeresaE]

Arrange to meet with several property management companies in the area and get their estimate on the potential income.

[Pat2015]

Don't forget the very high bond and taxes in that area. Better off going further north and buying pre-owned. If you check the Daily Sun, you will see tons of houses south of 44 for sale already....you must ask yourself why???
For a lot of people it’s for the profit that can be realized south of 44, and they stay down there with another purchase.

[DrMack]

There are a lot of homes for rent!

Rent From A Villager | Rental Homes in The Villages Florida | Advertise Your Village Rental (https://www.rentfromavillager.com/map)

Yes, we were able to rent out our home by just offering it at 3000 a month no problem. 2000 square feet of living space and furniture. It was easy to do. Just don’t overcharge. It isn’t a princely sum, but it does cover taxes and maintenance. South of 44 wasn’t for us. What ever you decide I wish you the best in your decision.

[Packer Fan]

Hi All, thrilled to have found this forum, looks like a great source for exchanging ideas/info!

My wife and I are from NJ, visited last month and decided we'd love to buy a place in Eastport that we can enjoy for a couple of the snowbird months, but also be able to recoup as much of our expenses by doing short term rentals the rest of the year (most likely using a management company).

We are considering either a 3 BR Cottage or one of the Patio Villas, ideally we would love to break even after factoring in lost interest on our cash purchase (not sure break even is possible, given rental supply/demand outside of snowbird season).

That said, would greatly appreciate if those in the know, would please offer their view and possibly include thoughts on the following:

1. Does one of these models make for a better short term rental place, i.e. does one typically provide a better return on investment?
2. Is there decent enough demand in the March through December period or does supply greatly outweigh demand? Is it realistic to think we should be able to break even?
3. Do you get a good return on the added purchase cost of a 3rd bedroom, or most short term renters don't need the 3rd bedroom, i.e. 3/2s rent for similar $ as 2/2s?

(I understand and expect our first year will be challenging since Eastport is still being built)

Thanks so much! :ho:

So I read through this and there is some good info and some bad. I have had 2 rentals for 10 years so I know what I am talking about. It’s pretty simple - when designers were selling for $250 and Patio villas for $180k, mortgages were 3.5%, and bonds paid nothing, it made some sense to buy a rental in TV as a diversifier to your portfolio. However, at current prices with mortgages at 7% and bonds paying 4-5% it makes no sense. Also, there are a lot more rentals now. Lastly for you - without renting out Jan-March you will lose money big time. Aa an example - high season rents form $5900 a month. Summer rents for about $1800. You MIGHT get about $3000 for Nov-Dec but Eastport area? No way. Put the $300k in bonds and use the $12000 you get per year to rent. Trust me, you will be better off. My rentals are paid for and I am moving into one and selling the other.

[Andyb]

Hi All, thrilled to have found this forum, looks like a great source for exchanging ideas/info!

My wife and I are from NJ, visited last month and decided we'd love to buy a place in Eastport that we can enjoy for a couple of the snowbird months, but also be able to recoup as much of our expenses by doing short term rentals the rest of the year (most likely using a management company).

We are considering either a 3 BR Cottage or one of the Patio Villas, ideally we would love to break even after factoring in lost interest on our cash purchase (not sure break even is possible, given rental supply/demand outside of snowbird season).


That said, would greatly appreciate if those in the know, would please offer their view and possibly include thoughts on the following:

1. Does one of these models make for a better short term rental place, i.e. does one typically provide a better return on investment?
2. Is there decent enough demand in the March through December period or does supply greatly outweigh demand? Is it realistic to think we should be able to break even?
3. Do you get a good return on the added purchase cost of a 3rd bedroom, or most short term renters don't need the 3rd bedroom, i.e. 3/2s rent for similar $ as 2/2s?

(I understand and expect our first year will be challenging since Eastport is still being built)

Thanks so much! :ho:

Not a good rental area south of 44 during off season. Look at buying north of 44.

[airstreamingypsy]

As for the how many bedrooms question. I always buy at least three. With no basements and sweatbox attics, I use the third bedroom as my storage room. All I need is two, mine and a guest room, but the third is a necessity for me.

[mrf0151]

Pretty sure a management company will require you to rent at least one of the peak months, they dont make much money on short terms, and they are a lot of work.

Yes, a lot of work for sure. That is the reason we only do annual rentals. Much less work and no "hotel tax".

[jarodrig]

r

recoup as much of our expenses by doing short term rentals the rest of the year (most likely using a management company).
:

By “short term rentals “ I hope you don’t mean the ABnB overnight or weekly rentals !!

If that’s the case , be prepared to NOT make friends within the neighborhood !!

I would suggest you also join the NextDoor forum and do some searches to see what the consensus is with that type of rental property !!

[CoachKandSportsguy]

Asking TOTV for expenses is not a complete due diligence exercise:
Whose your target market? Demographics? What's their expectations on spend? What's their repeat buying preference? What's their prefered months, what's their expected max rental rates? Different clientele for high season versus low season,
what's your targeted market repeat seasonal renter and their requirements? Golf cart included makes a huge difference in appeal, when priced in. . . Final make or break number: what's your occupancy assumption and rate for April through Dec off season?


so, real world figures from a rental in an LLC for limited liability this year:

purchased: 2018, closed 2019 about $350K, custom designer
furnishing cost pre pandemic: $15K
internet hardwired outlets 2 in each room, plus whole house wireless
Golf cart cost: $12K
current value @500K
lot purchase number out of 99 lots, somewhere between 10 and 20,
Southern Oaks nearby amenities: no rec center, no food and 1 restaurant, no 18 hole golf, 3 executives with no golf cart access and no bridge access to cross 44. ie, marsh bend was just dirt with Fenney down the road. .
annual occupancy rate from 50% to 80%, varies by year

current expenses basis for a non local owner:
$20,000 - $25,000 per year, depending upon PM percentage, repairs AND INSURANCE (ding ding!)
excluding mortgage, including bond, lawn care, watering, insurance, taxes, cable for any type of renter, heat, and electricity, home watch, repairs, and PM fees.

With 80/20 LTV mortgage, add another $15K at 4.5% commercial loan. RE tax basis increases at 7% per year, insurance increases are currently 5-50% per year, with a non zero probability of cancellation.

cash flow positive after three years, starting year 4. pandemic had a huge impact on travel and renting,
income tax still no taxes paid, and will never had taxes given loss carry forward and depreciation carrying cost.

ROI will NOT be realized from income generated from renting, especially not with a mortgage nor with a PM fee.
ROI will come from the terminal value, ie, disposal or sell value. If you plan to go from slumlord to resident, there is no ROI,
there is only expense offset while not a resident. Without income, a house is only shelter costs and there are NOT ROIs on shelter costs. if you don't understand these points, then be sure you consult with a financial expert so that you have the proper expectations for outcome probabilities.

good luck, but if you don't have a financial model set up to figure out these items, or you think that slumlording is an easy road to instant ROI riches, you might want to re-think that naive assumption.

As far as illiquid asset house flipping goes, the easy money had been made, though you can still make money if you are experienced negotiator, can find estate sales of older homes, and can rent them out with 100% availability, with a for sale sign in the background. . or buying in a brand new development and selling when the developed area has no more land left. However, if you look at the sheer amount of new houses being built, why would someone buying want to buy a used house when new ones are being released constantly and look exactly like yours?

former corporate finance guy,
with lots of investment and modelling experience.

[Dusty_Star]

So I read through this and there is some good info and some bad. I have had 2 rentals for 10 years so I know what I am talking about. It’s pretty simple - when designers were selling for $250 and Patio villas for $180k, mortgages were 3.5%, and bonds paid nothing, it made some sense to buy a rental in TV as a diversifier to your portfolio. However, at current prices with mortgages at 7% and bonds paying 4-5% it makes no sense. Also, there are a lot more rentals now. Lastly for you - without renting out Jan-March you will lose money big time. Aa an example - high season rents form $5900 a month. Summer rents for about $1800. You MIGHT get about $3000 for Nov-Dec but Eastport area? No way. Put the $300k in bonds and use the $12000 you get per year to rent. Trust me, you will be better off. My rentals are paid for and I am moving into one and selling the other.


Sensible advice!

[Lisanp@aol.com]

You need to factor in the rent you would be paying for the "Snowbird months" if you didn't own here. After factoring in that $15K or so, the ROI isn't difficult to recoup.

[DrHitch]

we'd love to buy a place in Eastport that we can enjoy for a couple of the snowbird months, but also be able to recoup as much of our expenses by doing short term rentals:

First, you should do a search within this forum because this topic has been covered many many times.

Second, in recent years, the villages become saturated with "investment" properties used for short term rentals.

Third, many other property owners distain very short term (less than a month) in their neighborhoods.

But, there are property management (watch) companies that can walk you through the numbers.

[Bitsee]

Agreed !

But not one person yet has mentioned the demeanor of the tenants that you will be subjected too as a tentative landlord.
We have had 5 rental homes in TV since 2008 and have been in the rental business for 35 years in Wisconsin as well.
Overall it has been just okay but by no means did we get " rich " in the TV rental game believe me. We were extremely lucky to have broken even for the most part.

Some tenants did do damage to our homes...red wine spilled on new carpeting and furniture, cigarette burns in our furniture, items stolen from the house, dents in the garage door, excess company on thier part filled the house and parked illegally in the neighbor driveways , dog poop left all over the yard, and constant partying day and night just to name a few considerations you may encounter...needless to say the neighbors there were not fond of us many times and they let us know it.

Overall, the big picture.. it really is not worth the expense and the headaches involved in my opinion thru our experiences.

Eastport is going to be a beautiful area to live, my suggestion is buy your dream home there and YOU live in it and enjoy it !
If you want to rent it out to just friends you know or family to enjoy, that also is an option.

[TomDTV]

Hi All, thrilled to have found this forum, looks like a great source for exchanging ideas/info!

My wife and I are from NJ, visited last month and decided we'd love to buy a place in Eastport that we can enjoy for a couple of the snowbird months, but also be able to recoup as much of our expenses by doing short term rentals the rest of the year (most likely using a management company).

We are considering either a 3 BR Cottage or one of the Patio Villas, ideally we would love to break even after factoring in lost interest on our cash purchase (not sure break even is possible, given rental supply/demand outside of snowbird season).

That said, would greatly appreciate if those in the know, would please offer their view and possibly include thoughts on the following:

1. Does one of these models make for a better short term rental place, i.e. does one typically provide a better return on investment?
2. Is there decent enough demand in the March through December period or does supply greatly outweigh demand? Is it realistic to think we should be able to break even?
3. Do you get a good return on the added purchase cost of a 3rd bedroom, or most short term renters don't need the 3rd bedroom, i.e. 3/2s rent for similar $ as 2/2s?

(I understand and expect our first year will be challenging since Eastport is still being built)

Thanks so much! :ho:

I'm an annual renter for almost 2 years near Spanish Springs in 2 BR patio villa. I pay $1825 per month. Owner has decided to sell. Asked if I want to buy. Not a chance. At 20% down and 7% mortgage, principal and interest alone will be almost $1600. From other sites I've seen, taxes, insurance, etc will probably be close to that. So likely $3000 per month. That's a huge negative cash flow. Good luck with your decision

[Dusty_Star]

I'm an annual renter for almost 2 years near Spanish Springs in 2 BR patio villa. I pay $1825 per month. Owner has decided to sell. Asked if I want to buy. Not a chance. At 20% down and 7% mortgage, principal and interest alone will be almost $1600. From other sites I've seen, taxes, insurance, etc will probably be close to that. So likely $3000 per month. That's a huge negative cash flow. Good luck with your decision

I guess there are those who like to rent & those who like to own.

I think you may have had a great deal on your rental of $1,825. You didn't mention if that includes electric & internet, so I proceeded with the figures as if they are included. I looked for 2 bedroom, 2 bath patio villas in the Spanish Springs area & found some for sale. One was asking $255,000. If they got their asking price, & the buyer put 20% down, with the mortgage, property tax, amenity fee (including water, sewer, trash), insurance, electric, internet, I arrived at a monthly payment of $2,195.
But for that monthly payment, the buyer owns house & there are some tax breaks for mortgage interest & property tax. Also, it is the buyer's house for as long as he cares to keep it, at the end of which he or his heirs will have a substantial asset, that can be sold, rented out or lived in.

I also looked at the rent from a Villager site for a long term rental for a patio villa in the Spanish Springs area & today, renting for this next year, I only found 1 & it is asking $2,000. Electric, internet, gas not included. I don't have a price for gas, but if electric is $130 (average for the whole year) & internet is $50 (high speed fiber optic), then the monthly payment would be $2,180.

For a savings of $15 a month, but no tax break for the mortgage interest or property tax & it is not the renter's house, meaning the price can rise next year & or the owner can decide to sell the house & the renter has no ownership stake in the house.

The numbers can change based on different variables. The mortgage calculation site used an interest rate of 7.883%, hopefully a lower interest rate could be found & also the owner might accept a slightly lower price for the house.

In your example, you didn't say if you need to rent another place to live soon. If so, good luck in your search. If you don't need to find another place to live and were only giving an example of buying a property to rent out, then the numbers are not as hugely negative as first supposed. But as many have indicated, breaking even is a challenge, especially in the early years.

[ElDiabloJoe]

That's great. The Villages needs more Short Term Rentals. It's wonderful for the neighborhoods. At least it's in the South, so no one really cares if there's another STR down there.

I assume this was stated with tongue firmly planted in cheek.
:thumbup:

[CoachKandSportsguy]

So I read through this and there is some good info and some bad. I have had 2 rentals for 10 years so I know what I am talking about. It’s pretty simple - when designers were selling for $250 and Patio villas for $180k, mortgages were 3.5%, and bonds paid nothing, it made some sense to buy a rental in TV as a diversifier to your portfolio. However, at current prices with mortgages at 7% and bonds paying 4-5% it makes no sense. Also, there are a lot more rentals now. Lastly for you - without renting out Jan-March you will lose money big time. Aa an example - high season rents form $5900 a month. Summer rents for about $1800. You MIGHT get about $3000 for Nov-Dec but Eastport area? No way. Put the $300k in bonds and use the $12000 you get per year to rent. Trust me, you will be better off. My rentals are paid for and I am moving into one and selling the other.

correct answer in my opinion

[Villager2be]

By “short term rentals “ I hope you don’t mean the ABnB overnight or weekly rentals !!

If that’s the case , be prepared to NOT make friends within the neighborhood !!

I would suggest you also join the NextDoor forum and do some searches to see what the consensus is with that type of rental property !!
I had not determined the best renting approach yet for our situation, but it is good to know that weekly rentals have such a bad rap here. We have done weeklies back home for a several years already and have never had a bad experience that impacted our neighbors (if anything, something inside the house got damaged). We did a weekly rental for our stay this year and the place was immaculate in and out, I just presumed that most short term guests would be senior couples who respect our place like we respect others places (more or less). Is it really that bad or have a a couple of bad apples soured everyone to this way of thinking?

[BrianL99]

I had not determined the best renting approach yet for our situation, but it is good to know that weekly rentals have such a bad rap here. We have done weeklies back home for a several years already and have never had a bad experience that impacted our neighbors (if anything, something inside the house got damaged). We did a weekly rental for our stay this year and the place was immaculate in and out, I just presumed that most short term guests would be senior couples who respect our place like we respect others places (more or less). Is it really that bad or have a a couple of bad apples soured everyone to this way of thinking?

Just because you're not aware of any impact your "weekly rentals" have had on neighbors, doesn't mean there wasn't impact. Personally, I wouldn't by a home that was abutted in any way, by a home/unit that I knew was used as a STR. That's impact, whether you acknowledge it or not.

Short Term Rentals have no place in a residential zoned neighborhood, in my opinion. The Villages is not regulating them in any way and (& won't, because it works to their benefit) and current Florida Law makes it almost impossible for a city or county to regulate them.


In general, they (STR's) de-stabilize neighborhoods and put increased burden on the infrastructure and in the case of The Villages, the amenities.

Just my opinion, everyone else's mileage may vary.

[CoachKandSportsguy]

I just presumed that most short term guests would be senior couples who respect our place like we respect others places (more or less). Is it really that bad or have a couple of bad apples soured everyone to this way of thinking?

This is where your customer based business plan identifies the customer base, and the drivers.

What's the biggest draw to FL? Orlando and the entertainment parks. If you are looking for a cheap version of rentals for school vacation and still get to Orlando for a day or two and have access to pools, etc. . is TV competitive? a viable alternative with lower affordable accomodations to renting hotels in Orlando?

of the rentals we have, there are two major categories:
1) retired couples looking for their retirement house, or waiting on building completion
2) younger generation visiting grandparents with children. . .

The third category, we haven't had any, are school vacation types, wanna get away by SWA to FL . .

Friend of ours had one of these in NH, and threatened to call their higher education institution about their college visa for all the damage done if they didn't pay. .

[shaw8700@outlook.com]

In my current HOA, they had a vote last on year on whether to get rid of STRs. This year we have seen a significant slow down, and lots of houses slashing their prices. Even the condos, which normally sell very quickly are sitting.

Now, I’m not saying that getting rid of STRs is the reason, probably the rise in interest rates has something to do with it, but we rented four different houses over three years for one/two weeks while we got to know this area, and if not for STRs we would’ve never had that chance.

[BigDawgInLakeDenham]

Let us know where you buy so all the dogs can sh!t on your lawn. That way you'll be like the rest of us even though you're not actually here. Best wishes

[MrChip72]

1. Does one of these models make for a better short term rental place, i.e. does one typically provide a better return on investment?
2. Is there decent enough demand in the March through December period or does supply greatly outweigh demand? Is it realistic to think we should be able to break even?
3. Do you get a good return on the added purchase cost of a 3rd bedroom, or most short term renters don't need the 3rd bedroom, i.e. 3/2s rent for similar $ as 2/2s?


We are going into our third year as Villagers. We are "snowflakes", meaning we go back and forth throughout the year but we do rent out our place during certain months like Feb-March where you get top dollar compared to the other months. That alone covers around 75% of our annual costs.

1. Designers are by far the most popular for non-short term rentals, like renting a month or two at a time. Also, I would highly recommend against offering short term rentals that are under a month. You will not make that much money due to fees going to AirBnb/****, plus your neighbors will all despise you. Personally, we value our neighbors and don't want them to feel like they live next door to a hotel. You get a VERY different type of renter from AirBnb vs sites like Rent from a Villager.

2. The easiest to rent are Feb/March. April and May you can get some interest if you're priced right and have a nicely furnished place. June-Nov is a crapshoot in getting any renters at all.

3. A 3 bedroom you're getting slightly higher rent but probably not enough to say the 3 bedroom is more "profitable", although the higher the price, you're generally getting a more desirable renter than someone that's trying to rent at a bargain basement price.

I would also caution against using a management company. Many charge 25-30% or more and you're at the mercy of them finding renters for you, some try less hard than others. Some try to rent your place without you knowing so that they can pocket 100% of the rent. I belong to a Villages Landlord group, and almost every anecdote I get from talking to other landlords that have used management companies in the past is very bad.

[MrChip72]

Aa an example - high season rents form $5900 a month. Summer rents for about $1800. You MIGHT get about $3000 for Nov-Dec but Eastport area? No way.

Eastport area is likely to become one of the prime areas. It seems likely to be the best Square out of all of the existing ones. Aside from that, I'm south of the turnpike and we get $3000 for Nov or Dec. $6500 for each the prime months. I'm sure Eastport designer homes will get more than that once it's completed.

I agree though that as a pure investment, there's several better options than buying a home in the Villages just to rent out.

[Sandy and Ed]

That's great. The Villages needs more Short Term Rentals. It's wonderful for the neighborhoods. At least it's in the South, so no one really cares if there's another STR down there.
Thank you for saying that. Who would want to encourage a hyper-transient community. Place is becoming a ghost town out of season as it is.
Carpetbaggers!!

[Sandy and Ed]

Agreed !

But not one person yet has mentioned the demeanor of the tenants that you will be subjected too as a tentative landlord.
We have had 5 rental homes in TV since 2008 and have been in the rental business for 35 years in Wisconsin as well.
Overall it has been just okay but by no means did we get " rich " in the TV rental game believe me. We were extremely lucky to have broken even for the most part.

Some tenants did do damage to our homes...red wine spilled on new carpeting and furniture, cigarette burns in our furniture, items stolen from the house, dents in the garage door, excess company on thier part filled the house and parked illegally in the neighbor driveways , dog poop left all over the yard, and constant partying day and night just to name a few considerations you may encounter...needless to say the neighbors there were not fond of us many times and they let us know it.

Overall, the big picture.. it really is not worth the expense and the headaches involved in my opinion thru our experiences.

Eastport is going to be a beautiful area to live, my suggestion is buy your dream home there and YOU live in it and enjoy it !
If you want to rent it out to just friends you know or family to enjoy, that also is an option.
Amen. We wa owned three rental condo’s in Smithville NJ just outside Atlantic City. Renters paid them off for us and yes we made some good money over all but factor in all the headaches and the turnover due to AC market, we might as well have broken even. Buy your home and enjoy life here. Forget about chasing the $$$$$

[LuvNH]

If you really want to have your home trashed try renting to spring breakers for the month of March. I have rented on the beach and seen spring break in full swing, and I believe it is starting to happen here.

[Normal]

From an investor’s point of view, buy when prices are low. They certainly are nowhere close to bottom here yet. Real estate is all about timing, location and risk exposure.


Even money markets are safer than real estate right now.

[CarlR33]

Just because you're not aware of any impact your "weekly rentals" have had on neighbors, doesn't mean there wasn't impact. Personally, I wouldn't by a home that was abutted in any way, by a home/unit that I knew was used as a STR. That's impact, whether you acknowledge it or not.

Short Term Rentals have no place in a residential zoned neighborhood, in my opinion. The Villages is not regulating them in any way and (& won't, because it works to their benefit) and current Florida Law makes it almost impossible for a city or county to regulate them.


In general, they (STR's) de-stabilize neighborhoods and put increased burden on the infrastructure and in the case of The Villages, the amenities.

Just my opinion, everyone else's mileage may vary.It’s on some HOA’s radar outside of TV as our Midwest HOA wanted us to consider amending the Bilaws against rentals.

[Normal]

It’s on some HOA’s radar outside of TV as our Midwest HOA wanted us to consider amending the Bilaws against rentals.

Airbnb is being sued by multiple agencies. There isn’t any clear place where everything will land because there are so many suits. They have been flooding Florida campaigns with cash. I’m not sure where it will get them.

[Daddymac]

So you want “THE BEST MONTHS” for yourself!! So no, it will not pay for itself. Remember you have 5000 other people looking to rent at the same time, “The off months”. Just something to think about, Don’t let people bull$hit you… If you don’t have the extra $$$$ to hold the house, Don’t do it…

[BrianL99]

Airbnb is being sued by multiple agencies. There isn’t any clear place where everything will land because there are so many suits. They have been flooding Florida campaigns with cash. I’m not sure where it will get them.

AirBnB is winning all over the country. Read one of the VCA's they negotiated. The cities, towns, counties got virtually nothing from AirBnB and many are trying to void the VCA's.

AirBnb has lawsuits going against numerous cities & states and have been dumping millions into fighting against any regulation or attempt to make them collect taxes and insure advertised rentals, meet local ordinances.

RIght now, their huge advantage, is the taxing authorities, can't afford to fight them. If the IRS opts to wade into the battle, that could change the dynamic. No one beats the IRS.

As of right now, AirBnB vs the USA & State Zoning Regulations, is like Uber vs Taxi companies on steroids. We all know who won the Uber/Taxi battle.

[Jalane]

FYI -Villagers north of 44 will likely tell you to buy a short-term rental south of 44 and vice-versa because everyone hates them for various reasons. If you must rent but want to keep your neighbors happy, 1yr leases are the only way to go.

[Papa_lecki]

I would be worried that any local government at any time can ban short term rentals. It can happen in any of the cities TV is in, i.e. Leesburg.

It can happen on a whim. Coronado, California banned STR and the enforcement is tough. In TV, you know neighbors will report STR if they are banned.

So be prepared to support the property without rentals.

If you think it can’t happen or won’t happen? All it takes is one election.

[Normal]

I would be worried that any local government at any time can ban short term rentals. It can happen in any of the cities TV is in, i.e. Leesburg.

It can happen on a whim. Coronado, California banned STR and the enforcement is tough. In TV, you know neighbors will report STR if they are banned.

So be prepared to support the property without rentals.

If you think it can’t happen or won’t happen? All it takes is one election.

Or a couple nice hotel chains who scatter cash. Wildwood is building a pickleball court with a nice 120 room luxury hotel. The pickleball court is on four acres are part of an 18-acre project expected to include a 120-room hotel, 70 pickleball courts, 21,250 square feet of retail space, 10,000 square feet of restaurant space and 5,000 square feet of office space. It’s located directly behind the Village of Lake Deaton near the Baker House.

[Villager2be]

We are Brits - so can only stay in the US for 6 months each year. We started out along the lines of trying to cover our costs through renting year round when we were not staying.
Eventually we realised that we were getting around 80% of our costs covered from about 3 rentals per year. The first was the Jan thru March period (high season). It’s seems just now you can charge just about what you want and get someone to pay. But a word of caution, our home is situated mid way between Lake Sumter and Spanish Springs. So our success rate may be through location.
The second rental is for April.
These two periods are now regular returners so no great concern over their looking after the house properly.
The third rental is over Xmas but ending no later than 30th Dec.
We did get enough rental income during the summer, but they were all short term (normally a week). They were the least tidy, caused most damage and gave us the most headaches.
We have come to realise that over the 8 years we have owned our home, the value of the house has increased, each year, by far more than the annual costs.
We are fortunate that our income and savings/investments, allow us to take the hit on lower rentals. We also realised that our costs were lower as a result, and over the last couple of years we have only had to cover around 10-12% of the yearly costs. For us that’s about $3000 per year.
So, best advice we can give is to think about location, starting with where you want to be. Then see what rentals might be possible, by looking at the nearest developed area and what other renters are charging. You can do that by going on the various sites and looking at rates in those areas.
Once you have a fix on the possible rates at various times of the year, for the nearest locations, you can work on your costs. Don’t just take what The Villages say in their blurb. We found lots of other costs were necessary.
Then plan your strategy.
If you want to know more - DM me. Happy to help.
Ray

This is really helpful Ray, thank you very much. I will DM you, just had a couple of follow-up questions

[BrianL99]

I would be worried that any local government at any time can ban short term rentals. It can happen in any of the cities TV is in, i.e. Leesburg.

.


Florida law prohibits cities & counties from banning STR's. There's zero chance of it happening in Leesburg or anywhere else, that didn't have the law on the books, prior to Florida adopting the original legislation in 2011.

[Villager2be]

So you want “THE BEST MONTHS” for yourself!! So no, it will not pay for itself. Remember you have 5000 other people looking to rent at the same time, “The off months”. Just something to think about, Don’t let people bull$hit you… If you don’t have the extra $$$$ to hold the house, Don’t do it…
Yes, the main reason for the purchase is to have an alternative to paying rent as snowbirds, initially live there for at least 2 months, and increase that gradually over time, maybe eventually become near 100% residents if we love it as much as we expect to. We don't want to just pay rent and watch as prices appreciate every year. We can afford the full carrying costs without any rental income but it will make a dent in discretionary spending if I had to carry the full load of a 2nd home and not offset it with any rent, and otherwise keep it empty (which also seems like a waste). It is also cash that we are taking out of other investments so it would be nice to break even to help justify that decision, as well as to help cushion short term depreciation risk.

[Normal]

Florida law prohibits cities & counties from banning STR's. There's zero chance of it happening in Leesburg or anywhere else, that didn't have the law on the books, prior to Florida adopting the original legislation in 2011.

They can’t ban, but they can manage and regulate. Rental periods are unapproachable, but city codes can stipulate on site residence of management, fire codes etc. Where there is a will, there certainly is a way.

I found this article interesting on a new AI approach to busting and fining those not compliant with laws. Those who tried to skirt laws will find it much more difficult if they aren’t registered and paying every dime in taxes. Isn’t technology grand…
Here’s how AI can help find illegal short-term rentals in Central Florida (https://www.clickorlando.com/news/local/2023/10/31/heres-how-ai-can-help-find-illegal-short-term-rentals-in-central-florida/)

[Villager2be]

Airbnb is being sued by multiple agencies. There isn’t any clear place where everything will land because there are so many suits. They have been flooding Florida campaigns with cash. I’m not sure where it will get them.

I am by no means an expert, but I would imagine that TV would be a very different place (and not necessarily better), if STRs got banned. What will that do to property values? Many snowbirds and snowflakes could either be forced to sell, or just choose to sell, and many of your future snowbird/flake buyers and investors would no longer be interested in buying. Not to mention all of the snowbird renters who would no longer be able to stay short term. There go your crowds, for better or worse, and the huge influx of money they bring to the area, and a ton of participants for all the activities, I imagine a lot of what makes TV such a vibrant and wonderful place. Maybe I am wrong but just saying IMHO, be careful what you wish for... it could have a huge unintended impact.

[BrianL99]

They can’t ban, but they can manage and regulate. Rental periods are unapproachable, but city codes can stipulate on site residence of management, fire codes etc. Where there is a will, there certainly is a way.

I found this article interesting on a new AI approach to busting and fining those not compliant with laws. Those who tried to skirt laws will find it much more difficult if they aren’t registered and paying every dime in taxes. Isn’t technology grand…
Here’s how AI can help find illegal short-term rentals in Central Florida (https://www.clickorlando.com/news/local/2023/10/31/heres-how-ai-can-help-find-illegal-short-term-rentals-in-central-florida/)

It's an interesting concept, but somewhat misleading. AirBnB does not collect hotel/accommodation/vacation taxes in all jurisdiction. They only collect in areas in which they have VCA's in place. Not only that, but AirBnB has is constantly changing its platform, to make it more difficult for 3rd party vendors, to track locations. If you'll notice, the vast majority of AirBnB listing, no longer contain and address. This is a conscious decision by AirBnB to thwart programs like the one described.

It's a battle that's going to play out over the next few years, but given how much money AirBnB has committed to the battle and how much their spending to elect friendly legislators, they have the upper hand, so far.

[Dusty_Star]

I am by no means an expert, but I would imagine that TV would be a very different place (and not necessarily better), if STRs got banned. What will that do to property values? Many snowbirds and snowflakes could either be forced to sell, or just choose to sell, and many of your future snowbird/flake buyers and investors would no longer be interested in buying. Not to mention all of the snowbird renters who would no longer be able to stay short term. There go your crowds, for better or worse, and the huge influx of money they bring to the area, and a ton of participants for all the activities, I imagine a lot of what makes TV such a vibrant and wonderful place. Maybe I am wrong but just saying IMHO, be careful what you wish for... it could have a huge unintended impact.

Do you have any evidence at all for your imagination of The Villages? Hopefully some snowbirds will contribute, but of the snowbirds I know personally & I know quite a few, they spend the winter months here in Florida & those months vary depending on the people but generally late fall to early spring, then they close up their house & travel to their house up north. No unintended impacts. It is quieter here in the lovely summer months & busier in the lovely winter months. I'm fond of our snowbirds & look forward to seeing them return in the fall.

[Papa_lecki]

Florida law prohibits cities & counties from banning STR's. There's zero chance of it happening in Leesburg or anywhere else, that didn't have the law on the books, prior to Florida adopting the original legislation in 2011.

Florida Senate approves vacation rental regulations as websites like Airbnb, **** become more popular (https://www.wctv.tv/2024/02/01/florida-senate-approves-vacation-rental-regulations/)

2/1/24…

Short-term vacation homes are closer to having new rules. The Florida Senate approved a proposal Thursday putting new regulations for vacation rentals.

[Villager2be]

Do you have any evidence at all for your imagination of The Villages? Hopefully some snowbirds will contribute, but of the snowbirds I know personally & I know quite a few, they spend the winter months here in Florida & those months vary depending on the people but generally late fall to early spring, then they close up their house & travel to their house up north. No unintended impacts. It is quieter here in the lovely summer months & busier in the lovely winter months. I'm fond of our snowbirds & look forward to seeing them return in the fall.

Just look at all the replies from owners and investors in this thread and many others who say they have had many rentals and continue to rent... search the Villages on Airbnb now across all dates and see how many there are out there. What will happen if the rules are changed for them in the middle of the game and for others who had planned to buy (or buy more) and do the same? I agree that none of us has those numbers or can 100% foresee the true impact; but some impact, surely there has to be, great or small. All I am saying is that a STR ban would not be a risk I would be willing to take if I am generally content with the current state of my Villages, whether I am full time or not, err on the side of caution. It is a formula for success (as everyone here has to admit) and I would not mess with it.

[BrianL99]

Florida Senate approves vacation rental regulations as websites like Airbnb, **** become more popular (https://www.wctv.tv/2024/02/01/florida-senate-approves-vacation-rental-regulations/)

2/1/24…

Short-term vacation homes are closer to having new rules. The Florida Senate approved a proposal Thursday putting new regulations for vacation rentals.

The bill that was passed, merely gives locals the ability to identify and impose some standards. It doesn't give them any more right to control the availability or duration of short term rentals. If I'm not mistaken, similar legislation has been passed by the FL Senate almost every year and then gets bogged down in the House.

In the past, DeSantis has said he'll veto any such regulations. I'd be surprised if it makes to law, as Florida has such dependency on vacation rentals.