- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Anybody have rental property at Gulf Shores / Orange Beach?
Posted on 8/8/15 at 10:18 pm
Posted on 8/8/15 at 10:18 pm
I bought a condo last year and it has done very well. I use Brett Robinson as the property manager. While they do an excellent job, the 23% management fee adds up. The convenience of their own maintenance staff and cleaning service makes it a good trade off though. With that said, I'm thinking about buying a second condo and wonder if anyone has worked with one of the other management companies or had luck keeping it clean and in good condition by directly hiring people and using VRBO.
5
Posted on 8/8/15 at 11:22 pm to Ramblin Wreck
Have some family friends that own multiple properties in Gulf Shores/Orange Beach. Several are in Brett/Robinson buildings. None are serviced by them.
I've stayed at their places several times and have been satisfied with the cleanliness and they have been pleased per what they tell us in passing conversation.
My advice: shop around and ask other companies for some referrals of their current clients to discuss their experiences with rental properties and management companies in the area.
Good luck. I'm jealous. I wish I could afford a condo out that way!
I've stayed at their places several times and have been satisfied with the cleanliness and they have been pleased per what they tell us in passing conversation.
My advice: shop around and ask other companies for some referrals of their current clients to discuss their experiences with rental properties and management companies in the area.
Good luck. I'm jealous. I wish I could afford a condo out that way!
Posted on 8/9/15 at 8:28 am to GFunk
quote:
I wish I could afford a condo out that way
Thanks for the response. I don't know your budget situation, but I don't have lots of cash laying around. I would bet that most people that get in over their heads on beach condos are those that don't budget for a subsidy during the off season combined with them using it too often for themselves. We strictly look at ours as an investment and didn't use it during the two summers we've owned it. We will probably average around a $350 to $400 a month subsidy this year. I'm content with driving my high mileage car and using what I would normally spend as a payment on something that depreciates on something that increases in value.
Posted on 8/9/15 at 9:51 am to Ramblin Wreck
Do you ever go?
Posted on 8/9/15 at 9:52 am to Ramblin Wreck
We have a couple of condos in OB and use VRBO. We honored some bookings from BR when we bought the last one and they nickel & dimed us to death on stupid fees. Our cleaning lady's boyfriend is a handyman and we have become good friends with the onsite maintenace guy, so we feel confident we can get issues taken care of without having to drive out there ourselves.
We also rarely block the unit off for us to use personally, especially during the summer. If a weekend doesnt book and we have nothing else going on we will just head down there for a couple of days.
We also rarely block the unit off for us to use personally, especially during the summer. If a weekend doesnt book and we have nothing else going on we will just head down there for a couple of days.
Posted on 8/9/15 at 10:08 am to blupony
On of my partners has 3 condos in Destin. 2007-2009 SUCKED for him.
quote:
I'm content with driving my high mileage car and using what I would normally spend as a payment on something that depreciates on something that increases in value.
Posted on 8/9/15 at 11:30 am to Ramblin Wreck
I have yet to see a condo that makes money with rental income.
I have seen some people get lucky and sell at a peak to make some money or break even.
If you like the beach, save the 3,500 a 5,000 you would bleed on owning a condo and have a really nice week at a nice house at Ono or a nice condo.
I have seen some people get lucky and sell at a peak to make some money or break even.
If you like the beach, save the 3,500 a 5,000 you would bleed on owning a condo and have a really nice week at a nice house at Ono or a nice condo.
Posted on 8/9/15 at 11:39 am to nelatf
quote:This has been my experience as well. I have several clients who have lost money investing in Gulf Coast condos. It is cheaper and more convenient to just rent one when you want to go to the beach than trying to work around when you can get renters into a condo you own.
I have yet to see a condo that makes money with rental income. I have seen some people get lucky and sell at a peak to make some money or break even. If you like the beach, save the 3,500 a 5,000 you would bleed on owning a condo and have a really nice week at a nice house at Ono or a nice condo.
Posted on 8/9/15 at 1:10 pm to HailToTheChiz
quote:
Do you ever go?
Yes, but only during the off season. We also used it this year during the Hangout Festival. Our kids go every year, so it made sense to use our own place versus renting.
quote:
I have yet to see a condo that makes money with rental income.
It depends on how you look at it. The rental income at my condo covers the HOA fees, electricity, and 75% of my loan payment. As I stated earlier, we look at it as an investment.
Posted on 8/9/15 at 1:28 pm to Ramblin Wreck
BIL & SIL bought a condo on Perdido Key one month before Ivan, two years of not being able to use and three 25K assessments for insurance deductable later, they love theirs.
Posted on 8/9/15 at 1:44 pm to Ramblin Wreck
quote:
on something that increases in value.
until it's value drops by 50% like they did in 2008
Posted on 8/9/15 at 2:29 pm to yellowfin
quote:
until it's value drops by 50% like they did in 2008
That's precisely why I bought now. Values had not fully recovered from 2008. It's like any type of investment, you need to do research before jumping in.
Posted on 8/9/15 at 3:14 pm to yellowfin
quote:
until it's value drops by 50% like they did in 2008
Buddy got a 3 br at Caribe for $350k. Wish I had some extra dough at that time.
Posted on 8/9/15 at 3:18 pm to achenator
yeah it was a great time to buy 5-6 years ago
Posted on 8/9/15 at 6:21 pm to yellowfin
Second homes and vacation homes are the first to get cut out of the family budget when the economy tanks.
Personally, i think that its going to tank again in the relative near future. JMO
Personally, i think that its going to tank again in the relative near future. JMO
Posted on 8/9/15 at 8:21 pm to Ramblin Wreck
quote:
the 23% management f
So happy I only pay 8% for my properties I do not manage.
This post was edited on 8/9/15 at 8:22 pm
Posted on 8/9/15 at 8:27 pm to Ramblin Wreck
quote:
we look at it as an investment.
That's no investment if you are not getting PCF. Don't tell me you are just investing for appreciation with a CONDO??? Sounds more like my timeshare. It was bought as a family vacation property for us. Yes, we can rent it, yes we can sell it. We probably wouldn't get what we paid for it( or be lucky to break even) but we didn't buy it as an investment. It was stricly for our usage and it has paid for itself a dozen times over now. Sounds like that's what your condo is for. Your family enjoyment and usage. Nothing wrong with that. It's also nice if you are getting some money to help you cover expenses.
Posted on 8/9/15 at 9:22 pm to Fat Bastard
quote:
That's no investment if you are not getting PCF
Even though I'm subsidizing it, I still view it as an investment. I purchase commercial real estate properties also. Whenever I calculate the cap rate for a prospective property purchase, I don't include my loan cost. Since I don't pay myself anything from the properties, the most important factors to me are the strength of the investment as a resale property, the strength of the tenant, and if the income is enough to pay the loan and repairs. The cap rate on the beach condo is 6.4%. For this particular purchase, I didn't pay anything down, so a cap rate that low doesn't bring in enough income to pay the note. Other commercial properties that I have bought average cap rates around 10%. I'm sure residential properties are even higher, but my small amount of experience in the residential rental market was not enjoyable.
I like the thought of owning beach condos for a couple of reasons. First, I must admit that I love the novelty of owning property in Gulf Shores / Orange Beach. Secondly, it is a balance to my portfolio. While commercial property has a higher rate of return, there is always the possibility that a lease will not be renewed. I currently have that fear with a Dollar General that I own. Every 5 years when the leases are up for renewal, there is always the possibility that one of my DG's will not renew. Then you are faced with having an empty $800K metal building. I've tried to position myself in reserves that I can handle the outstanding loans, etc. in the event I have a lease not renew. The beauty of vacation condo is, excluding a brief period due to the after math of a hurricane, there will always be rent coming in. No leases to expire. You don't have to worry about rent not being paid and any property damage is automatically charged to the renter's credit card. The compromise is a lower cap rate.
I've learned a lot after buying my first condo and have done enough research in the area to identify the complexes and sizes that have higher rates of return. There are some condos that have cap rates above 7.5%.
So while I do use in in the off season for weekend getaways, it is still a fairly decent investment. There are plenty of commercial properties for sale that advertise a similar asking cap rate.
This post was edited on 8/9/15 at 9:25 pm
Posted on 8/9/15 at 9:26 pm to Ramblin Wreck
I had a client sell a condo in Destin in 2014 that he purchased in I believe 1988. He had a taxable gain of 410K, of which about 280K was due to depreciation. (i.e. the value increased about 130K over the 26 years).
He never used it for personal use (or so he says...) so it was treated as rental each year. However due to his AGI (he is a doctor) he was never able to deduct losses each year. Those losses just piled up year to year, until he sold it.
We took 26 years of losses in 2014 - which was 527K. A significant part of those losses were depreciation expenses, of course... but not all.
That does not seem like a great investment to me.
He never used it for personal use (or so he says...) so it was treated as rental each year. However due to his AGI (he is a doctor) he was never able to deduct losses each year. Those losses just piled up year to year, until he sold it.
We took 26 years of losses in 2014 - which was 527K. A significant part of those losses were depreciation expenses, of course... but not all.
That does not seem like a great investment to me.
Posted on 8/9/15 at 9:34 pm to LSUFanHouston
quote:
I had a client sell a condo ...
Wouldn't that be the case no matter what type of investment real estate it was?
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News