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Message
re: Will a Beach condo pay for itself by renting it ?
Posted on 4/17/18 at 10:16 am to Ole War Skule
Posted on 4/17/18 at 10:16 am to Ole War Skule
quote:
Highly unlikely.
It's not highly unlikely, it's a fact. Not saying it's common but it's true in this case.
1
Posted on 4/17/18 at 10:26 am to lsubec
The OP's post scares the hell out of me.
If I were you OP, I would
-read some books (Rich Dad Poor Dad, Millionaire Real Estate Investor, and Brandon Turner's Bigger Pockets books)
-while you're reading, supplement listening to Podcasts while you're in the car. Biggerpockets, Listen Money Matters, Passive Real Estate Investing, and Hold That House.
-I would then buy a SFH in your area. Bank that cash flow until you have a comfortable nest egg in case of cap ex repairs.
-Rinse and repeat a couple times
-Once you have a nice size nest egg for EACH property, and you're cash flowing, then you can think about a short term vacation rental.
I view vacation rentals completely diff than traditional REI. I would only do it IF you were already looking for a vacation rental of your own. Hire out a property management company to help offset your mortgage by renting it out throughout the year. Offset a portion is key, as you won't get rich from this thing. But hell, you own a vacation home. American dream as they say.
If I were you OP, I would
-read some books (Rich Dad Poor Dad, Millionaire Real Estate Investor, and Brandon Turner's Bigger Pockets books)
-while you're reading, supplement listening to Podcasts while you're in the car. Biggerpockets, Listen Money Matters, Passive Real Estate Investing, and Hold That House.
-I would then buy a SFH in your area. Bank that cash flow until you have a comfortable nest egg in case of cap ex repairs.
-Rinse and repeat a couple times
-Once you have a nice size nest egg for EACH property, and you're cash flowing, then you can think about a short term vacation rental.
I view vacation rentals completely diff than traditional REI. I would only do it IF you were already looking for a vacation rental of your own. Hire out a property management company to help offset your mortgage by renting it out throughout the year. Offset a portion is key, as you won't get rich from this thing. But hell, you own a vacation home. American dream as they say.
Posted on 4/17/18 at 11:05 am to Chad504boy
quote:
do we add the expenses of our annual vacations we no longer take due to going to beach condo into the equation of paying for itself?
That is another downside of owning a vacation rental, feeling obligated to use it, instead of taking vacations to new places.
Posted on 4/17/18 at 11:15 am to lsubec
No.
Figure you'll be able to rent it out around 200 or so nights a year. Figure that your HOA fees may be somewhere in the $500-1000 per month range, plus you need your own insurance for the unit interior and rental liability, plus maintenance costs from high usage, plus a property manager taking 15-20% cut...all on top of the mortgage. Seems like a good idea until you sit back and start crunching numbers.
Figure you'll be able to rent it out around 200 or so nights a year. Figure that your HOA fees may be somewhere in the $500-1000 per month range, plus you need your own insurance for the unit interior and rental liability, plus maintenance costs from high usage, plus a property manager taking 15-20% cut...all on top of the mortgage. Seems like a good idea until you sit back and start crunching numbers.
Posted on 4/17/18 at 11:15 am to lsubec
As said, in 2006-2012ish you could. Now the purchase prices are too high to get a reasonable return for the most part. Its possible, but not very likely.
Posted on 4/17/18 at 12:33 pm to flyAU
quote:
Don't listen to anyone else in this thread. I have one in Ponte Vedra.
Interested in it by chance????
Posted on 4/17/18 at 12:37 pm to fjlee90
quote:
Not as much as the time share I'm willing to sell you.
yeah my timeshare is paid off and we love it and have rented it out with our points at times but that SOB was NEVER EVER considered an investment. purely family vacation place. nothing more. Posted on 4/17/18 at 12:49 pm to baldona
The last beach condo I bought was in Orange Beach in 2015 and I am grossing over 21%. Net over 13%. The one I bought in 2014 does 25% gross, and 15% net.
Looking at cost of similar units in my building today and I would gross over 13% and net almost 9%. Prices have gone up, but there is still a nice return to be made on beach rentals in that area.
Looking at cost of similar units in my building today and I would gross over 13% and net almost 9%. Prices have gone up, but there is still a nice return to be made on beach rentals in that area.
Posted on 4/17/18 at 1:13 pm to Sofa King Crimson
quote:
It's not highly unlikely, it's a fact.
It can be both, but I don't think it is.
What are the numbers? Income/Expenses/purchase price. I don't believe you. I could be wrong though, show me. I'm sincerely curious as everything I've seen is prices are too high now to make any money.
Posted on 4/17/18 at 1:29 pm to Ole War Skule
I don't see how people are buying the condos there now at the prices where they are, if they are expecting the rent to pay everything. Prices keep going up, too. Am I missing something?
Also what about the risk of a building-wide assessment?
Also what about the risk of a building-wide assessment?
Posted on 4/17/18 at 1:47 pm to EA6B
quote:
feeling obligated to use it, instead of taking vacations to new places.
depends on family wants and needs. my family has taken like 4-5 beach vacations to the same condo place in ft walton past several years.
Posted on 4/17/18 at 1:54 pm to lsubec
Almost never.
Posted on 4/18/18 at 8:14 am to ELVIS U
At next market slide the wife and I plan to scoop one up. Depending on interest rates at the time, we will put down 20% - 40% cash. We would prefer to not rent it out but will likely bite the bullet and sign on with a mgt company for rentals. Will lesson the pain of the hoa fee's and insurance.
Definitely not a cash cow but for long term appreciation and enjoyment, it will serve it's purpose as a valuable asset.
Definitely not a cash cow but for long term appreciation and enjoyment, it will serve it's purpose as a valuable asset.
Posted on 4/19/18 at 12:04 am to Lookin4Par
HOA fees will never allow the owner to turn a profit.
Posted on 4/19/18 at 8:44 am to montana
quote:
HOA fees will never allow the owner to turn a profit.
Incorrect. Beachfront properties are certainly expensive to maintain. The only thing that determines profit and percent return is your purchase price.
HOA fees for a 2 bedroom condo are $400-500/ month. That includes cable internet and tv, insurance from drywall out, pool, landscaping, etc. It would take a major unforeseen issue for a 2 bedroom condo in most buildings to be assessed anything over $10,000. Ive heard of $30-40k assessments after hurricanes but that was for a large 3 bedroom in a small building that had a Beachfront pool destroyed.
Condo HOAs are actually not that expensive, only those ignorant to what they include believe that.
Posted on 4/19/18 at 11:21 am to baldona
These things are not as bad as an investment as most believe.
This myth is propagated by the poors to make themselves feel better about not being able to afford a condo!
This myth is propagated by the poors to make themselves feel better about not being able to afford a condo!
Posted on 4/19/18 at 11:42 am to Lookin4Par
quote:
This myth is propagated by the poors to make themselves feel better about not being able to afford a condo!
Posted on 4/19/18 at 3:22 pm to notiger1997
How much would the property tax be?
I know a pharmacist I worked under had one, and his PT was like $12,000 yearly so take that into consideration as well
I know a pharmacist I worked under had one, and his PT was like $12,000 yearly so take that into consideration as well
Posted on 4/19/18 at 4:42 pm to Lawyered
I could be wrong but I don't think most people following this thread are looking at investments big enough that would warrant a $12k property tax bill. I would have to guess that's in the 2 million range.
Posted on 4/19/18 at 6:15 pm to blupony
quote:
I could be wrong but I don't think most people following this thread are looking at investments big enough that would warrant a $12k property tax bill. I would have to guess that's in the 2 million range.
For year 2017 the property taxes on a condo in Destin with a assessed value of $758,000 was about $9,100.00 and some change. For 2016 a condo with $997,000.00 assessed value had property taxes of $11,295.00
This post was edited on 4/19/18 at 6:24 pm
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