So just wondering if anyone out there owns short term vacation rentals in Florida? Looking into Treasure Island and Madeira beaches...

I've seen the condotels, but not sure about returns after the management fees. I own a long term SFH rental but haven't tried short term yet...

I've thought about purchasing a place on Anna Maria Island for 15 years. I'd have to 1031 exchange one of my multi-unit apartment buildings in Pittsburgh area to do it.

What always stops me is the fact that I have no idea how anyone makes any money on these properties after paying for the property manager, service providers(handyman, cleaning staff ….), flood insurance, mortgage, property taxes, utilities and a thousand other items. In fact, owning one of these rental homes seems to be an easy way to start down the road of financial ruin.

Common sense always tells me that I make very good money off of my local Pittsburgh rental building so why sell a winner to purchase a, seemingly guaranteed, loser. The Florida realtors will give you an inflated amount of what your expected rental income will be and how they can deal with all of the stress and headaches of managing the property. They forget to mention that the cost of their service is 30% of the gross rental income they just quoted.

I still go down to AMI for a two week trip every November, rent a beautiful home for about $1500 / week (off-season rates) and can just kickback and relax. If I owned down there, kicking back and relaxing is not what I'd be doing.

Just noticed that you are located in Florida. If you are local and plan to do your own property management, maybe, just maybe, you can make this work. With weekly renters, expect to spend much more time on this rental than the long term rental you currently own.

Rich/PA when we first started looking on the OBX, our realtor was pushing us towards the million dollar rental machines, but DH constructed a simple spreadsheet and NONE of them cash-flowed. At BEST they paid SOME of the expenses. MAYBE some of the older ones, bought before the run-up, made money for their owners, but those were now listed for sale at bubble prices.

The hype was all based on appreciation, and when the downturn hit...

Be aware of your local laws regarding hotel-motel tax. A number of communities are drafting ordinances regulating peer-to-peer rentals and short-term rentals, because they're losing out on significant income.

Thanks for the feedback everyone!

I live about 1 1/2 away from these locations, so I would have to hire a PM...and from what I can tell, they charge about 30-40% of the gross rents due to the frequent turnovers, housekeeping, etc.

It's still interesting and I'd like to connect with anyone that does short term rentals or AirBNB...but I'm less inclined to do this...thanks!

Connect with Al Williamson on Facebook, "AirBnB for Landlords" group. He has a whole course, a whole group doing this but NOT by buying. They RENT regular rentals at regular price, spiff them up and furnish them and then rent them for double as short term rentals. The deal is worked out with a landlord who doesn't want to deal with maintenance and such. Some do short-term but others are renting 30-60-90 days to nurses, other professionals depending on the area.

30-40%?

When we had a ski house in VT before VRBO we had a realtor that would do the renting, inspecting, hand out keys, deal with issues so he earned his 30%. I think we did pay the cleaning person directly. If you are doing Air B N B or VRBO, unless this PM is booking the rentals for you, what are they doing to earn the 30-40%? 1 1/2 hours away, you are close enough if you have a major crisis, otherwise meet and get handymen, cleaning company, plumber, electrician, AC company on board with you and your property. Use a lock box for keys. We have a ski condo in CO we do this with. The condo property manager helps connect us to reliable people. If renters are causing issues, he calls us. We just hired a new cleaning person and he wanted 30% but was going to do everything. We already have a system so agreed to 5% because he will actually respond to renter issues like the direct tv isn’t working or gas fireplace won’t turn on instead of us talking them through it by phone.

Al, we have a former residence in St Pete that we have been renting out for 30 years. Our biggest expense for it is the flood insurance--higher than the taxes and the reg property insurance combined. And it is inland! Coastal insurance for the areas you mentioned--whole west coast--is 3x the normal cost. We have a friend who has property north of Clearwater paying insurance almost $6 THOUSAND per year. Pinellas County coast line is one of the highest cost areas--as high as Miami. You'd have to buy low and make a he11 of amount of money on it to justify paying the insurance.