Short Term Rental Investment In Galveston TX | To Live And Buy In Texas

Summary

Cynthia Quarter, a realtor from Galveston, shares insights on short-term rentals, emphasizing the importance of personal goals, location, and ROI. She advises on market research, property features like pools and golf carts, and the costs involved in furnishing and maintaining a rental. Cynthia also highlights the benefits of short-term rentals for both investment and personal enjoyment, and the necessity of a local property manager to handle maintenance and guest relations.

Takeaways

• 🏠 Personal Goals: Determine what you want from a short-term rental, whether it's personal use or a money-making venture.
• 🌊 Location Research: Explore different areas, such as beach or canal side, to find what suits your preferences and investment goals.
• 🔍 Reconnaissance: Use platforms like Airbnb to book and experience different properties to understand what works for you.
• 👨‍👩‍👧‍👦 Family Considerations: Think about the size and type of property that will accommodate your family's needs.
• 💰 Investment Analysis: Calculate the return on investment (ROI) considering the entry price and potential rental income.
• 📈 Market Fluctuations: Be aware that the rental market can be influenced by economic conditions and travel trends.
• 🏖️ Seasonality: Understand the peak and off-peak seasons and how they affect rental demand and pricing.
• 🏡 Amenities: Consider community amenities like pools, golf carts, and beach access that can enhance the rental experience.
• 🛋️ Furnishings: Factor in the cost of furnishing the property, which can significantly impact the initial investment.
• 📸 Marketing: Invest in quality photography and social media presence to attract potential renters.
• 👷‍♂️ Property Management: Consider hiring a local property manager to handle maintenance, cleaning, and other operational aspects, especially if you're not nearby.

Q & A

What is the main topic of discussion in the video script?

The main topic of discussion is short-term rental properties, specifically focusing on what to look for when considering this type of investment in the Texas market.

Why is it important to understand personal goals before investing in a short-term rental property?

Understanding personal goals is crucial because it helps determine the type of property, location, and investment strategy that will best suit an individual's needs and preferences.

What does the host suggest doing to get a feel for the short-term rental market?

The host suggests doing reconnaissance by using platforms like Airbnb to book and experience different types of short-term rentals to understand what works and what doesn't.

How does the host describe the importance of location in short-term rental investments?

The host emphasizes the importance of location by discussing factors such as proximity to the beach, access to amenities like community pools, and the legalities of certain features like golf carts in different neighborhoods.

What are some of the peak seasons mentioned for short-term rentals in the Texas market?

The peak seasons mentioned include summer, festivals, the cruise season, and holidays like Christmas and Thanksgiving.

Why is it recommended to have a property manager for a short-term rental property?

A property manager is recommended to handle maintenance issues, middle-of-the-night calls, and other responsibilities that may arise, especially if the owner is not located near the property.

What are some of the costs associated with starting a short-term rental business that should be considered?

Some of the costs include the purchase price of the property, furnishing expenses, photography for listings, and potential management fees.

What is the host's advice on negotiating management fees for a short-term rental property?

The host advises that management fees are negotiable and encourages potential investors to negotiate these fees to maximize their return on investment.

Why is it essential to consider the furnishing of a short-term rental property?

Furnishing is essential because it can make or break the appeal of the property to potential renters, and it includes not only furniture but also items like dishes, pots and pans, towels, and silverware.

What role does social media play in promoting a short-term rental property according to the host?

Social media plays a significant role in promoting a short-term rental property by helping to build a following, sharing updates, and engaging with potential renters through platforms like Instagram and Facebook groups.

What is the host's final advice for those considering investing in a short-term rental property?

The host's final advice is to focus on personal goals, consider the return on investment, evaluate the location, and think about the practical aspects of managing the property, including insurance, taxes, and furnishing.

Outlines

00:00

🏠 Short-Term Rental Insights: Goals and Market Analysis

Cynthia, a realtor from Galveston, Texas, introduces a discussion on short-term rentals, emphasizing the importance of personal goals and market research. She suggests considering factors like location preferences, property type, and family needs. Cynthia advises using platforms like Airbnb for reconnaissance, assessing personal experiences to determine what works best. She also touches on financial considerations, including startup costs, potential returns, and the importance of being conservative with estimates to avoid financial strain. The video script highlights the significance of understanding peak and off-peak seasons, and the impact of local events on rental demand.

05:01

🛋️ Navigating the Costs and Management of Short-Term Rentals

In the second paragraph, Cynthia delves into the financial aspects of furnishing a short-term rental property, which can be a significant expense. She estimates costs ranging from $15,000 to $20,000, depending on the house size and desired finishes. Cynthia stresses the importance of high-quality photography and an active social media presence to attract renters. She also addresses the necessity of property management, especially for those not in proximity to their rental property, detailing the roles and benefits of a property manager, including handling maintenance issues and guest inquiries. The script suggests negotiating management fees and emphasizes the value of local management companies with a good reputation.

Keywords

💡Short-term rental

Short-term rental refers to the temporary leasing of a property for a short period, typically for vacation or business purposes. In the video, the concept is central to the discussion, as the host, Cynthia, shares insights on how to approach investing in such properties. She mentions the importance of understanding the market and personal goals when considering a short-term rental as an investment.

💡Personal goals

Personal goals are the objectives or aims an individual sets for themselves. In the context of the video, Cynthia emphasizes the need for individuals to define their personal goals before investing in a short-term rental property. This could include factors like location preferences, the intended use of the property, and financial aspirations.

💡Realtor

A realtor is a professional who assists in buying, selling, or renting real estate. Cynthia identifies herself as a realtor in Galveston, indicating her expertise and experience in the local real estate market, particularly in the short-term rental sector.

💡Return on investment (ROI)

Return on investment is a financial metric used to evaluate the efficiency of an investment. In the script, Cynthia discusses the importance of calculating ROI when considering a short-term rental property, taking into account factors like startup costs, potential rental income, and the property's appreciation over time.

💡Appreciation

Appreciation in real estate refers to the increase in value of a property over time. Cynthia mentions the potential for a short-term rental property to appreciate, which is an important consideration for investors looking for long-term gains in addition to rental income.

💡Offseason

Offseason refers to the period in a year when demand for a product or service is lower, typically due to seasonal factors. Cynthia talks about the importance of understanding the rental potential during the offseason, as it can affect the overall profitability of a short-term rental property.

💡Furnishings

Furnishings are the movable items in a property, such as furniture, appliances, and decorations. In the video, Cynthia highlights the significant expense and importance of furnishing a property for short-term rentals, as it can greatly impact the attractiveness and rental value of the property.

💡Photography

Photography in the context of real estate refers to the visual representation of a property, often used for marketing purposes. Cynthia advises on the importance of high-quality photography and even video for showcasing a short-term rental property to potential renters online.

💡Property management

Property management involves the administration of real estate properties, including maintenance, tenant relations, and marketing. Cynthia discusses the benefits of hiring a property manager for short-term rentals, especially for those who are not in close proximity to the property, to handle tasks like maintenance and cleaning.

💡Maintenance

Maintenance refers to the process of keeping a property in good condition through regular upkeep and repairs. Cynthia warns about the potential for unexpected maintenance issues in short-term rentals, such as broken air conditioners, and the importance of having a reliable property management team to address these issues promptly.

💡Insurance

Insurance provides financial protection against risks, and in the context of real estate, it can cover property damage, liability, and other risks. Cynthia reminds viewers to factor in insurance costs when calculating the total expenses of owning a short-term rental property.

Highlights

Introduction to the topic of short-term rentals with a focus on personal goals and the importance of location.

The need for research on the short-term rental market, including using Airbnb to understand different property types.

Personal experience with renting a Canal House to determine suitability for a short-term rental.

Discussion on the importance of considering the size of the property for family use and the potential for rental income.

Emphasis on calculating the return on investment (ROI) and the importance of conservative estimates.

Highlighting the peak season for short-term rentals and the significance of understanding the off-season rental potential.

The role of local festivals and events in boosting short-term rental demand.

Importance of understanding the costs involved in startup, including principal, interest, taxes, and insurance.

The value of equity in real estate and its role in long-term investment growth.

The impact of amenities such as community pools, golf carts, and elevators on rental appeal.

The cost and importance of furnishing a property for short-term rentals, including the potential expense.

The necessity of professional photography and social media presence for marketing short-term rentals.

The benefits of using a property manager for short-term rentals, especially for remote owners.

The potential for high maintenance demands and the importance of having local vendors for quick response.

Negotiating management fees and the potential savings that can be added to the bottom line.

The comprehensive approach to considering all costs, including insurance and taxes, in the ROI calculation.

Encouragement to subscribe for more information and to share personal experiences with short-term rentals.

Transcripts

welcome to live and bu in Texas I am

your host today Cynthia cter and I am

going to talk about all things

short-term

[Applause]

rental so this is just going to be a

conversation about what to look for I'm

a realtor in Galveston which is the

Third Coast we are south of Houston and

it is a very very popular short-term

rental market so through the years I've

learned a few things so I'm just going

to share with you what I've learned so

first thing you want to do is what are

your personal goals you know when you're

looking at a a business such as a

short-term rental this is going to be

your house this is going to be your

properties it's not going to be booked

all the time so what will work for you

and your family you know what kind of

goals what location do you like to be on

the beach side do you maybe want to have

a boat in the water on the canal side do

some reconnaissance go out there get on

Airbnb see what other people are doing

and book you a place and go see what you

like over the holidays me and my husband

we were looking to buy a house we're

we're actually buying a house right now

and so I went on Airbnb I don't I don't

know where I want to live live you know

so because we live here in Galveston

fulltime so I rented a Canal House

didn't want that too far out from town

didn't want that got a beach front house

and believe it or not I love the beach

front house but it was way too windy for

me so I'm still looking so go out and do

your reconnaissance and see what will

work for you are you going to be using

it with your family you want to think

about the size those types of things if

it's just money if it's just a line item

and you want the money maker then of

course that is going to be your goal and

you don't care where it's at because you

don't intend on staying there right so

the return on your investment how much

bang for your buck you can get so if you

can get a lower entry price point and

rent it for higher get yourself a

spreadsheet if you're not into

spreadsheets that's fine put it in on

your piece of paper and just crunch the

numbers for what kind of a return on

your investment some of the YouTubes

I've seen you know do get a short-term

rental 100% cash flowing that is likely

not going to happen right out the gate

so you have got to look at what it's

going to cost you in startup costs and

really be conservative on your numbers

because you don't want to get yourself

in a situation where you're upside down

likely the note the principal interest

taxes Insurance all of those things that

would be great if your rental income

could cover that but it's highly

unlikely it just is so you you want to

also look at the equity piece of it

where you're having an appreciating

asset that's just going to keep

appreciating as the real estate piece of

it and be conservative on your numbers

so you don't get yourself in trouble so

your return on investment is going to be

important now we definitely have a peak

season during the summer and then we

have festivals in the offseason of like

Marty gr we're known for Marty gr here

and uh we have the cruise terminal with

a lot of people come and uh stay a few

nights in town and then jump on the

cruise and Christmas and Thanksgiving

and holidays and stuff like that but you

want to Crunch the numbers for the

offseason and any short-term rental

rental management company or a realer

like myself we can give you a pretty

good idea of how many nights it'll book

what for the property that you're

looking at which is interesting if it's

new construction or it hasn't been used

for a short-term rental before we can

project those but it depends on the

economy the market are the People Are

People traveling if something has

already been a rental we get rentals

from the management company and break it

down what has this done year over-year

and what's it going to mean for your

investment one of the reasons I love

short-term rentals so much and it's a

passion of mine is because this is the

one investment that you can make

memories in and again we're going to go

back to using your investment for your

own purposes let's talk about many ities

is there a community pool is there a

golf cart that's accessible that you can

zip around on is the golf cart legal in

that neighborhood elevators are really

important in our neighborhood because

everything's built on py Lanes beach

chairs access to beach all of those

things and do your homework because some

of the communities they have pools but

they do not allow renters to use them

and that could be a a bad review so you

really want to do your homework on that

you want to talk about the Furnishings

too so this is a big expense when you're

doing a short-term rental if you buy a

vacant house with no Furnishings you've

got to furnish that home time effort

movers money you know 15 20,000

depending on the size of the house and

the finishes that you want I mean you

could go as crazy as you want on that

right but this furniture is it's going

to make or break the place and then you

got to get photography you want to take

pictures people buy online and video if

you could do pictures and video and open

yourself up a social media account and

just start blasting that every day post

something about that Google community

activities or whatever but get yourself

a following on social media so your

house has its own page and then get

involved in Facebook groups and get on

Instagram and get a local photographer

and get your home ready to go put it on

Airbnb and

VRBO and go live a couple business

things before I let you go let's talk

about

management so property managers if you

are not near your wherever your

short-term rental is I highly encourage

you to have a property manager because

one thing you don't think about when you

want to do a short-term rental um

maintenance those middle of the night

calls how does the Wi-Fi work the

lockbox code isn't working now if your

hands on you want to take those calls my

hats off to you I worked in a short-term

rental management company for a long

time and in summer on the same day all

the AC's broke you know so it's it's so

they have local vendors and they know

who will show up and do a good job for

you so short-term Rental Management

cleaning booking advertising all of that

stuff and the maintenance here is a

PRACK tip though get somebody that is

local of course there's big huge

companies you know them all but they

have offices who knows where so you want

to get somebody that is reputable of

course reviews all of that so management

management you can that line item is

probably going to be about 20% to manage

your property here's another Pro tip

that management fee it's negotiable

don't just take it it there's so many

management companies here in our

neighborhood I know that they want

business so negotiate those fees you're

not going don't lowball it because you

you know you get what you pay for but

just think about even if it's a point or

two that's a that's added money to your

bottom line so that's what I have for

the shortterm rentals in our area you

want to focus on your goals look at your

return on investment the location this

is an investment that's not just an

investment but you can use it and make

memories there and have a business while

you're doing it you want to look at your

principal your interest your insurance

oh I forgot about insurance get quotes

agents will give you insurance quotes so

uh Insurance the taxes the insurance put

all those in your line item on your

spreadsheet there

Furnishings see how you want to furnish

that make sure you think about dishes

and pots and pans and towels and

silverware glasses all of it and then

who is going to manage this property for

you you're going to self-manage or not

and make sure you get on your local

website see what it's going to cost you

to register it usually they make it

super super easy here in galvaston it's

very easy to register and if you like

what you heard today and want to see

some more of it hit the Subscribe button

my information is in the description

section of my YouTube channel leave a

comment what's been your experience with

a short-term rental and what Pro Haack

do you want to share with others who are

thinking about getting into this

business this is Cynthia quarter to live

and buy in Texas go out there and make

some memories with your Investments