best fort lauderdale real estate agent

Jim Esposito

Intercoastal Realty

954-336-3776

Own Short Term Vacation Rental

 

How Much Money Can You Make?

Buy & Operate an Airbnb or VRBO

 

 

best fort lauderdale real estate agent

 

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Financials, Projections, Answers to FAQs

 

Everything You Always Wanted to Know About Owning & Renting Out Short Term Vacation Rentals

 

But Didn't Know Who to Ask

 

Short Term Vacation Rentals have become big business in the United States. With the worldwide Pandemic creating so many problems with oversea travel it has created quite an investment opportunity in the tropical paradise which is Fort Lauderdale, Broward County and South Florida, one of our country's premier resort destinations. The popular Vacation Home Rental websites like Airbnb and VRBO all feature hundreds of listings in Fort Lauderdale and its surrounding communities.

Many astute real estate investors are taking advantage of this trend to make serious returns, while others wonder how this process works, exactly how much money is in it.


How Much Money Can I Make?

 

Hey, let's not beat around the bush, right? That's the Number One Question. It's only natural, after all. Trouble is, we must go through all the answers to all the other questions before you can start making any intelligent projections.

The quick answer is - that depends. On many factors. The approach you choose. The choices you make. An intelligent real estate investor knows that's the only answer I could offer.

To start letting you get a handle on the numbers we have outlined several of theoretical scenarios, which you can view by clicking on the "Scenario" buttons below.

One thing I should mention, one important factor to remember, you must think beyond the money you can make operating a property as a short term vacation rental. Do not ignore the potential appreciation, which in Fort Lauderdale these days, can be significant. Many Real Estate Investors only keep these properties for three to four years, after which they sell, lock in their profits.


How Often Will It Be Rented?

 

The Number Two Most Important Question. The crux of the entire equation. Once again, it all depends. The standard within the Vacation Home industry is an average of 60%. But remember, that's an average, which means some properties will rent more frequently, some less, and that depends on factors such as location, features, how nice of a property it is. A house by the Beach will rent more frequently than a home further inland. A house with a pool will be rented more often than a home without.

As you start crunching numbers you might be wise to work up a spread, maybe work up projections based on the property being rented 50% of the time, 60% of the time, and 70% of the time.


What Kind of Property Should I Buy?

 

Another key component, the typical vacation rental around Fort Lauderdale is usually a Single Family Home. They certainly offer the best capital appreciation. In South Florida, most Condos do not allow Short Term Rentals. Any prospective tenant in a Condo which is being rented must apply to the Association. You can't do that every week. In addition, most Condominiums across South Florida typically have restrictions governing how they can be rented. Many require the Condo must be owned for a year or two before they may be rented. Some may only be rented once in a calendar year. Some have 3-4 month minimum terms for any rental. Townhomes might be a viable option. A Townhouse (or Villa) are either a Condo Unit or a Fee Simple Property. You might be able to do a Vacation Rental with a Fee Simple Townhome. In addition, multi-family properties like a Triplex or Fourplex can often offer extremely lucrative returns when operated as a Vacation Rental.


How Much Can I Rent It For?

 

To arrive at the proper number you must either do some extensive research, see what comparable properties in the same neighborhood are renting for, and you can also consult an expert in the field. The fact of the matter is you must have a handle on what the proper market rent of a property should be before you start coming up with projections.


Who Takes Care of It?

 

To me, this is the most important question of all. Operating a Vacation Rental is not easy, and the vast majority of Real Estate Investors contract the services of a professional vacation rental management firm who oversees the entire operation. You are basically in the hotel business. The big websites will rent the property, take their fee, but you still need some way to give your tenants the keys, get them back when they leave. The property must be cleaned between tenants, linens and towels washed.

A professional vacation rental manager can also give you an idea what the property should rent for, and they will make sure your vacation rental is totally turnkey. You need sheets and towels, dishes and glasses, silverware, pots and pans and coffee makers. In addition, they can help with interior design so you can get the maximum rental rate, do light maintenance (light bulbs, remote batteries and A/C filters), and be there to oversee any other more involved maintenance issues which might occur.


How Do I Find the Right Manager?

 

Fortunately for you, that is the easy part. Simply contact Rene Grajales and Matty Soler of iTrip Vacations, Fort Lauderdale. Click on the button below. It will take you to their website, where you will find their contact info.

 

iTrip Vacations is one of the world's leading Vacation Rental Management companies. Rene and Matty run their Broward County office. They will help you negotiate the twists and turns of this operation every step of the way.


What Does That Cost?

 

iTrip manages your vacation rental for 25% of the gross revenue, with no nickel and dime extra charges for the day to day, week to week management. You can consult Rene and Matty when considering a property; they can advise you how much you can charge for daily and weekly rent, and any repairs and/or capital expenditures the property might require, furniture and design, to maximize your investment. They will help you stock your Property with linens, towels, plates and silverware, anything else which may be required. Of course, any supplies, remodeling or repairs will be paid by you.


How Much Will Property Taxes Be?

 

You can find a Home Buyer's Property Tax Estimator on the website of the Broward County Tax Appraiser at BCPA dot net, which you can access by clicking on the button below.

 

The BCPA (dot net) website is a great resource for anybody interested in Real Estate in Broward County. You can type in the address of a property, call up the Tax Records, see a map demarcating property boundaries, check what other homes have been selling for in the neighbrohood.


How Much Will Insurance Be?

 

Another simple questions with a difficult answer. Homes in South Florida require Homeowner's (Liability) and Windstorm Insurance. Some may require Flood Insurance if they are in a designated Flood Zone. Only you can determine how much Liability Insurance you wish to carry. How much you pay in Windstorm Coverage depends on structural features of your property. If the property has Impact Windows and Doors, Garage Doors, it will save you money. When you Inspect the property during your Due Diligence you will get a 4-Point Inspection from your Home Inspector. This will affect how much you pay.

I have a list of Insurance Agencies I give to customers when we start making offers. I will be more than happy to forward that to you once we start shopping.


How Much For Electric, Water and Trash?

 

Trash (and Municipal Sewer) is included in your Property Taxes. I'd add in at least $400 per month for Electric, and $125-150 per month for Water in a Single Family Home. These numbers should be considerably less per unit in Multi-Family.


How Much For Lawn and Pool Maintenance?

 

Somewhat negotiable, but for your budgets and projections I would add in $100 per month for Lawn and $175 per month for Pool Cleaning. Pools require more than Cleaning. Pools filters and pool heaters run constantly and will require occasional repair. To be through I'd either add in another $1,000 annually or add another $100 to your monthly.


Is There Any Special Permitting?

 

Yes. There is paperwork. This may vary in different municipalities. Fort Lauderdale requires: Proof of property ownership; A current license for a transient public lodging establishmen from the Florida Department of Business and Professional Regulation (DPBR; a current license with the Florida Department of Revenue for Sales Tax collection; A current Broward County Business Tax Receipt; Proof of registration for Broward County Tourist Development tax collection; A City of Fort Lauderdale Business Tax application submitted to the Vacation Rental department.

iTrip will assist you with all the paperwork. You must pay any fees. These are fairly nominal. For instance, Fort Lauderdale's Vacation Rental Registration Fee (up to four units under the same roof) is $350. Renewal is $160. A Business Tax Receipt ranges from $27 to $150.

Below is a link to the Vacation Rental Program page on the City of Fort Lauderdale's website.

 

 

Tourist Taxes?

 

Vacation Rentals pay a 6% State Tax, 6% to Broward County, and a Tourist Tax of 1%. These are collected by the Booking Website when the property is booked. As part of their services, iTrip sends the collected taxes to the appropriate entity.




Ball Park Scenarios


I've put together some "Ball Park" Scenarios using sample Properties from the MLS, consulting with Rene and Matty from iTrip Fort Lauderdale about the projected rent. Hopefully, these will assist you in getting a handle on the numbers.

Please be aware these are ball park estimates based on the average of a 60% rental rate per year, which will differ from property to property. The actual projections for any specific property will be up to you.

Click on the Buttons below. This is a work in progress, and I will be adding Scenarios as time progresses




Ft Lauderdale Real Estate News 6/3/2022



Fort Lauderdale Homes Up A Whopping 36%

 

Florida Realtors 2021 Year-End Statistics

 

The Average Sales Price for a Single Family Home in Fort Lauderdale rose a staggering 36.2% in 2021. In addition, the Median discount from Listing Price was Zero, meaning the vast majority of homes either sold for full asking or more than the Listed Price.

These startling figures are according to the latest year-end statistics released by the Florida Association of Realtors. Though seemingly incredible on face value these are accurate numbers. Statistics released by the Florida Realtors are generated by compiling sales reported through the MLS of local realtor associations across the state.

In 2020 the Average Sales Price for a Single Family Home in the city of Fort Lauderdale was $893,479; in 2021 it was $1,216,958.

The Median Sales Price, a more traditional indication of actual appreciation, for a Single Family Home in Fort Lauderdale increased 20%, from $500,000 in 2020 to $600,000 in 2021.

These figures are driven by the high demand for luxury waterfront properties from upscale buyers coming in from the Northeast and California.


Negotiation Is Futile

 

Stats regarding the discount from Listing to Sale Price are perhaps even more amazing. The "Median Percent of Original List Price Received" tracks the spread between asking and closing prices. With such an active Real Estate Market South Florida, and Fort Lauderdale in particular, are already known for being a tough place to negotiate. Historically, this Median Percent of Original List Price Received in Single Family Homes is around 95-96% of their asking, with Condominium and Townhome properties around 94-95%. In 2020, in Broward County, this number was...






 

Jim Esposito

 

Fort Lauderdale Real Estate Investments

 

954-336-3776

 

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