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Started By
Message
Beach Condo Real World Deal
Posted on 2/26/24 at 10:28 am
Posted on 2/26/24 at 10:28 am
Ok, I get these offers all the time. In light of last week's discussion, I wanted to break it down.
I just received this offering in my inbox.
Destin
Desirable Condo Complex
3BR/3BA
$799,500
HOA: $2179/month (covers insurance)
Taxes: $6150/annual
3 Year Average: $71,000 gross rents
So, putting 30% down ($240k), and assuming you can get closing costs paid by seller, you are looking at a 30 year mortgage at 7.5% at $4150.
$49,800 annual mortgage payment. In five years, you are going to be using other people's money to reduce the principal by ~$30k.
With $50k in debt management, $26k in HOA and another $6k in taxes - this is a horrible deal. You are going to be running $12k in the hole IF YOU MANAGE YOURSELF!!!!
Prices are crazy right now. This is the dumbest thing I have seen come across.
I just received this offering in my inbox.
Destin
Desirable Condo Complex
3BR/3BA
$799,500
HOA: $2179/month (covers insurance)
Taxes: $6150/annual
3 Year Average: $71,000 gross rents
So, putting 30% down ($240k), and assuming you can get closing costs paid by seller, you are looking at a 30 year mortgage at 7.5% at $4150.
$49,800 annual mortgage payment. In five years, you are going to be using other people's money to reduce the principal by ~$30k.
With $50k in debt management, $26k in HOA and another $6k in taxes - this is a horrible deal. You are going to be running $12k in the hole IF YOU MANAGE YOURSELF!!!!
Prices are crazy right now. This is the dumbest thing I have seen come across.
11
Posted on 2/26/24 at 10:39 am to anc
It's unlikely a beach rental has ever penciled at the time of purchase. I think many do this to have part of their place subsidzed by rent and hope it appreciates.
My in laws passed up at a rental for like 75k in the 90's, they sell for like 1.5-2 today.
My in laws passed up at a rental for like 75k in the 90's, they sell for like 1.5-2 today.
Posted on 2/26/24 at 11:05 am to anc
That’s honestly a bargain. In Miami, a 3BR/3BA condo would go for at least $1-2 million.
This post was edited on 2/26/24 at 11:06 am
Posted on 2/26/24 at 12:01 pm to anc
Condos continue to appreciate at a very rapid pace. Buying and not renting will likely still result in a healthy profit in five years.
All things considered, SC, GA, NW FL and AL are still cheap compared to condos or beach properties everywhere else.
All things considered, SC, GA, NW FL and AL are still cheap compared to condos or beach properties everywhere else.
Posted on 2/26/24 at 3:56 pm to anc
quote:
HOA: $2179/month (covers insurance)
I had to triple take at this
Posted on 2/26/24 at 4:05 pm to anc
quote:
Destin
Desirable Condo Complex
3BR/3BA
$799,500
Is the unit on the beach? That seems like a pretty low price for a 3BR3/BA in Destin
Posted on 2/26/24 at 4:50 pm to anc
Why is Seller leaving?
Posted on 2/26/24 at 6:53 pm to anc
I don’t have any beach condo real estate, but it has interested me. The two variables I don’t know anything about are:
1) what % of time should you expect to rent out
2) what % property management costs (other thread looked at this)
Question #1 may be different by different landlords and management styles, but at least wondering ball park
1) what % of time should you expect to rent out
2) what % property management costs (other thread looked at this)
Question #1 may be different by different landlords and management styles, but at least wondering ball park
Posted on 2/26/24 at 8:00 pm to anc
quote:
You are going to be running $12k in the hole IF YOU MANAGE YOURSELF!!!!
$12k/yr on $800k investment is down 1.5% a year.
What appreciation would you expect on a condo in Destin?
There's your math.
This post was edited on 2/26/24 at 8:39 pm
Posted on 2/26/24 at 9:12 pm to anc
quote:
3 Year Average: $71,000 gross rents
And gulf coast rentals just had the best three years on record
Posted on 2/27/24 at 9:08 am to Sput
quote:
And gulf coast rentals just had the best three years on record
The same will be true next year and the year after. As condos have appreciated, the rentals have, too. You may price people out of ski vacations, like Colorado finally did, but people still love the beach and have shown a willingness to pay whatever price is asked. As a renter, not an owner, I wish this were not true.
Posted on 2/27/24 at 11:48 am to go ta hell ole miss
I lose 15k on a condo in Orange Beach a year
I only go there 12 times a year....so I like it
I only go there 12 times a year....so I like it
Posted on 2/27/24 at 12:39 pm to go ta hell ole miss
quote:
The same will be true next year and the year after.
I don’t think so. Go look at rentals booked on any third party site. Folks are broke and the credit cards are maxed. A lot of chickens are coming home to roost.
Posted on 2/27/24 at 9:04 pm to Upperdecker
"1) what % of time should you expect to rent out"
Depends on how much you need to make. Every time you block off the calendar so you can enjoy your place you lose revenue. Nearly the same as just renting next door and then collecting the revenue on your place.
"2) what % property management costs (other thread looked at this"
20% minimum...much more labor intensive for the management co with short term rentals
Depends on how much you need to make. Every time you block off the calendar so you can enjoy your place you lose revenue. Nearly the same as just renting next door and then collecting the revenue on your place.
"2) what % property management costs (other thread looked at this"
20% minimum...much more labor intensive for the management co with short term rentals
Posted on 2/27/24 at 9:09 pm to anc
There are better deals out there...that hoa is really high...and $70k revenue must be a short hike to the beach and/or limited view...$800k should get a condo on the beach grossing $90k with an hoa less than $1500/mo
Posted on 2/28/24 at 10:47 am to anc
quote:
HOA: $2179/month (covers insurance)
Almost definitely not full insurance. Just stud out or whatever its called, you'll still need an interior and liability policy that's probably going to run you $1800-2400.
Its not a great deal at all, you are right.
Posted on 2/28/24 at 12:38 pm to baldona
I don't know how people are making buys like these, or why, unless they are just paying cash. It seems like there has to be a reckoning coming. The rates of increase in condo values in the AL/FL gulf coast do not seem sustainable.
Posted on 2/28/24 at 1:18 pm to go ta hell ole miss
quote:
The same will be true next year and the year after.
I disagree and my early booking for 2024 confirm this. 2024 will be lower than 23 and 25 might be really bad. Discretionary spending is crashing and the vacation market will soon feel it.
Posted on 2/28/24 at 1:24 pm to SippyCup
quote:
I disagree and my early booking for 2024 confirm this. 2024 will be lower than 23 and 25 might be really bad.
I’ll be most happy to be wrong. That is very encouraging for me since I don’t own. I have not seen any sign of the consumer slowing down on experiences
Have you lowered your rates to 2022 prices?
This post was edited on 2/28/24 at 3:05 pm
Posted on 2/28/24 at 8:11 pm to go ta hell ole miss
Influencer sisters break down the reality of running an Air BNB
I like this video for how she goes into detail regarding running an Air BNB. Much like others on this board she says basically the money is made in appreciation.
I like this video for how she goes into detail regarding running an Air BNB. Much like others on this board she says basically the money is made in appreciation.
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