Converting Short to Long Term Rentals - is if for you?
Many Short Term Rental owners in Florida are struggling in the current climate to find rental bookings. This article is the 1st in a series that discusses if the Long Term Rental is an option. For some it will be and for others it won't. Further information can be found on www.floridahomesonly.com
With the current climate of excess short term rental Villas available and the decline in guests looking to go to Florida is it an opportunity to ride the current market conditions by converting to a long term rental? It’s the first question we get asked when a villa owner is struggling for bookings. There are still great opportunities for the property investor in Central Florida but these opportunities are now migrating away from the Vacation/Short term rental market. Here we cover some significant benefits of long term rental property ownership that we hope will help you decide if this is a better option for you.
The first point we always make is you have to be aware you are not comparing “apples with apples” – the two are in totally different sectors and should be treated as such. The 1st key consideration is that you will not be able to stay in the Long Term Rental home when you go to Florida. Some of the questions asked by Villa owners indicated that this is not 100% realised. Each Villa owner has different requirements and expectations and we will need to FULLY understand these before we can effectively advise if this is for you.
Here are some of the major benefits for the long term rental investor:-
The property owner is still responsible for:-
But is Florida a good long term rental area?
Properties that have pools and grounds to maintain will have an individually negotiated lease confirming who is responsible for the maintenance.
An alternative that many short term rental owners are considering is to sell up and re invest in a long term rental home right from day 1. Capital gains tax can be deferred indefinitely if you do correct tax planning (1031 exchange) so the profit from the sale goes into the new investment. Or you can use the tax “loses” generated from running a short term vacation home.
We also believe a lot of British owners will see the benefits of migrating to long term rentals or if they are in the market to purchase another home to expand their portfolio to long term rather than reinvesting in the short term rental market. This way you also have diversification in your property portfolio.
As far as managing a long term rental then we suggest that you appoint an established long term rental / property management company that specialises in this area, and one that has been around for some time with licensed property managers who are experienced not only in this field but with the legalities of the various Florida Landlord & Tenant Acts. The laws governing the long v short term rental markets can be quite different. Preferably the manager should be a member of NARPM and FARPM. Beware of asking a short term rental/ vacation management company to manage long term rental homes and visa versa. It needs to be their core business. In recent times many realtors and vacation rental companies are “trying” to move into Long Term Property Management as the real estate market has been so tough for them. These same people do not necessarily have the required expertise or indeed back office facilities to efficiently run long term rental properties and facilitate the regular payments of income to owners.
For the short term Villa owner the conversion to long term renting is entirely feasible, but all the options should be taken into consideration before any final decisions are made. Contact us now at www.floridahomesonly.com to find out what they are
The experience of FloridaHomesOnly & Warner Quinlan enables us to offer comprehensive, independent and practical advice regarding your plans to successfully convert a short term rental into a long term one. We are well versed in the entire legal, professional and regulatory requirements for Long Term Rentals. We also offer full Realtor, Broker, 1031 exchange and mortgage capabilities to our clients.
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ABOUT THE AUTHOR
Graham Hardy & Mark Pagdin are the Directors located in Fleet England and Orlando Florida serving both UK and US based customers. Further information is available from www.floridahomesonly.com or you can contact Graham in the UK on 01252 687937 and Mark in the US on 407 574 0101