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re: Beachfront house: Good investment
Posted on 5/28/25 at 12:35 pm to GeauxTigers123
Posted on 5/28/25 at 12:35 pm to GeauxTigers123
quote:
Prices in Destin seem very high now. Condos that were $250k in 2010 are 600k now. I have to imagine the people who bought in at $250 are doing very well with revenue. Seems like a a tough time to enter into the market. Maybe it will keep appreciating. Maybe it crashes. Who knows.
Keep in mind that condo fees and special assessments are potentially going to be astronomical for some condos due to the regulations they put in following the condo collapse. We're dealing with a potential similar situation with the tallest building here in Charleston. Forced evacuation a few months ago and the whole thing is shuttered. Total mess.
1
Posted on 5/28/25 at 12:46 pm to N2cars
Search online for a short term rental expense and income spreadsheet. They are very detailed and not exactly easy to fill out. You have to do your homework on every expense and realistic revenue projections.
The time to buy was 10 years ago or more. Your rental at higher purchase price, higher interest will be competing with homes bought for less at lower rates. You can’t just charge a higher nightly rate than the market.
Most times you’re better off paying for the vacations rather than buying the house.
The time to buy was 10 years ago or more. Your rental at higher purchase price, higher interest will be competing with homes bought for less at lower rates. You can’t just charge a higher nightly rate than the market.
Most times you’re better off paying for the vacations rather than buying the house.
Posted on 5/28/25 at 12:53 pm to Chucktown_Badger
quote:
Keep in mind that condo fees and special assessments are potentially going to be astronomical
Coastal condos scare the crap out of me. There are plenty of horror stories of huge assessments after storms where large %’s of the owners didn’t have the money to pay and the whole complex gets screwed.
Posted on 5/28/25 at 12:53 pm to N2cars
Here's my real world experience.
I own 12 income producing properties.
2 STR in Destin/30A
1 STR in Orange Beach
All LTR
4 in Memphis
2 in Little Rock
2 in Starkville
1 in Jackson
Last year, my Destin/30A properties had a 68% occupancy rate. The median in Destin is 66%, so I was slightly ahead (by less than $1500 over the course of a year in both properties). I covered my expenses, which are insane (my Destin condo has a $3000/month HOA fee which does cover exterior insurance). My Orange Beach property is not beachfront, and it had a 72% occupancy rate (60% median). I made about $20k.
So if you are interested in beachfront that makes money, forget your vacation preference- Orange Beach/Gulf Shores is the better investment if you can find the right property.
My LTR properties send money to my account every month and this is where I am focused on growing. Buy them. Slight renovations to get them rent ready. Rent for 5-7 years, major renovation, sell and repeat.
I own 12 income producing properties.
2 STR in Destin/30A
1 STR in Orange Beach
All LTR
4 in Memphis
2 in Little Rock
2 in Starkville
1 in Jackson
Last year, my Destin/30A properties had a 68% occupancy rate. The median in Destin is 66%, so I was slightly ahead (by less than $1500 over the course of a year in both properties). I covered my expenses, which are insane (my Destin condo has a $3000/month HOA fee which does cover exterior insurance). My Orange Beach property is not beachfront, and it had a 72% occupancy rate (60% median). I made about $20k.
So if you are interested in beachfront that makes money, forget your vacation preference- Orange Beach/Gulf Shores is the better investment if you can find the right property.
My LTR properties send money to my account every month and this is where I am focused on growing. Buy them. Slight renovations to get them rent ready. Rent for 5-7 years, major renovation, sell and repeat.
Posted on 5/28/25 at 1:10 pm to N2cars
quote:
Beachfront house: Good investment
A money talk board tale as old as time....
This post was edited on 5/28/25 at 1:13 pm
Posted on 5/28/25 at 1:19 pm to GeauxTigers123
I've been seeing that in PCB and Destin for a long time.
Bay side price is what gulf front used to be.
Bay side price is what gulf front used to be.
Posted on 5/28/25 at 1:21 pm to N2cars
I just can't imagine that the return on a rental on the gulf coast is anywhere near as high as it needs to be for a risk-adjusted return.
Posted on 5/28/25 at 1:22 pm to anc
quote:
2 STR in Destin/30A 1 STR in Orange Beach
What years did you buy these properties?
Posted on 5/28/25 at 1:24 pm to notiger1997
quote:
What years did you buy these properties?
2018. And Im still barely breaking even. Insurance has skyrocketed. If OP waits until the fall, I'll have two for sale.
This post was edited on 5/28/25 at 1:25 pm
Posted on 5/28/25 at 1:24 pm to barry
I looked at the sticky and didn't see that specifically addressed.
This is a family situation as we all enjoy the beach. I'm aware there are better investments, but this would have intrinsic value.
If I could see the rental income coud substantially cover the expenses, I could see doing it.
This is a family situation as we all enjoy the beach. I'm aware there are better investments, but this would have intrinsic value.
If I could see the rental income coud substantially cover the expenses, I could see doing it.
Posted on 5/28/25 at 1:36 pm to N2cars
quote:
I looked at the sticky and didn't see that specifically addressed.
I just mean that without fail, every month or so someone post this exact topic. I think anyone on the gulf coast has thought about it.
quote:
This is a family situation as we all enjoy the beach. I'm aware there are better investments, but this would have intrinsic value.
If I could see the rental income coud substantially cover the expenses, I could see doing it.
You have to rent it out during all the best months to come anywhere near breakeven.
Rent a condo if you like the beach. There isn't some great savings to having your own place.
Posted on 5/28/25 at 2:09 pm to N2cars
quote:
The real profit would come on the sale of the property, just like any residence.
My rentals do both.
Posted on 5/28/25 at 3:10 pm to anc
Thanks for the excellent insight. 
Posted on 5/28/25 at 3:13 pm to N2cars
I live in Destin and have several clients who have rental properties. Very few generate 250k-500k in gross rental income. No idea where you got that figure.
You are likely going to lose money if you buy and rent and use it personally.
You will not have 100% occupancy rate. HOA fees for nice areas are insane. Insurance is through the roof, property taxes are high, services (pool, lawn, cleaners, etc) are hard to find good ones that are also cheap. Don’t forget about your short term sales taxes in Walton and okaloosa county. Bay has them as well.
Will you manage the property? That’s a whole other expense if you don’t want to drive here to handle the property yourself.
After depreciation, most of my clients aren’t making money on their rentals especially if purchased in the last few years. Of those that are making a profit, it’s 10-30k on average.
If you want to get a rental property, then do your research, go find out as close to real numbers as you can. If you want to get a big beach house and can afford it, go for it. Rent it if you want to help offset your expenses but don’t plan on covering your expenses if you also plan on using it.
You are likely going to lose money if you buy and rent and use it personally.
You will not have 100% occupancy rate. HOA fees for nice areas are insane. Insurance is through the roof, property taxes are high, services (pool, lawn, cleaners, etc) are hard to find good ones that are also cheap. Don’t forget about your short term sales taxes in Walton and okaloosa county. Bay has them as well.
Will you manage the property? That’s a whole other expense if you don’t want to drive here to handle the property yourself.
After depreciation, most of my clients aren’t making money on their rentals especially if purchased in the last few years. Of those that are making a profit, it’s 10-30k on average.
If you want to get a rental property, then do your research, go find out as close to real numbers as you can. If you want to get a big beach house and can afford it, go for it. Rent it if you want to help offset your expenses but don’t plan on covering your expenses if you also plan on using it.
Posted on 5/28/25 at 3:16 pm to N2cars
If for the memories good investment.
For financial return probably should look elsewhere.
For financial return probably should look elsewhere.
Posted on 5/28/25 at 3:28 pm to horsesandbulls
quote:
Will you manage the property? That’s a whole other expense if you don’t want to drive here to handle the property yourself.
I worked in property management and can confirm stuff breaks all the time. You fix one thing then something else breaks and it’s never cheap. You really need deep pockets to get into real state investing or you will be under tons of stress. It’s a full time job managing property.
Posted on 5/28/25 at 4:04 pm to horsesandbulls
Thanks for the reply.
Based on our experiences renting over the years, the larger homes, 9 beds, pool beachfront run about 28K per week and ate solidly occupied through summer and decently occupied through winter, with a lesser rate
We wouldn't buy something that large but a six bed, pool, beachfront should give 18K, peak season.
That is PCB, Destin runs a solid 10% more for single-family beachfront.
Would definitely have a property mgmt company
Based on our experiences renting over the years, the larger homes, 9 beds, pool beachfront run about 28K per week and ate solidly occupied through summer and decently occupied through winter, with a lesser rate
We wouldn't buy something that large but a six bed, pool, beachfront should give 18K, peak season.
That is PCB, Destin runs a solid 10% more for single-family beachfront.
Would definitely have a property mgmt company
Posted on 5/28/25 at 4:11 pm to notiger1997
quote:
It sure seems like you have it figured out already and don’t really want advice. Go speak to an agent and start crunching the numbers.
Based on what my friends are dealing with that own houses/condos and based on the several threads on here that I’ve read, it’s not near as good of an “investment” as you think.
My rents have a beach house that they rent out and use regularly. It makes them $96k a year.
As of right now the only dates available until you get to october 4th are Sept 8th and 9th.
Completely booked for the summer.
And then all of May and June 2026 is completely booked.
This post was edited on 5/28/25 at 4:15 pm
Posted on 5/28/25 at 4:18 pm to dgnx6
I was calculating 90% peak booked, 50% off-peak.
250K-500K is not a crazy amount depending on size.
The one we're considering should hit thst income level (250) based on rhe above %s.
What Im not clear on is the expense side; insurance, taxes, etc..
There's also rules about how much you can use it personally, I think.
250K-500K is not a crazy amount depending on size.
The one we're considering should hit thst income level (250) based on rhe above %s.
What Im not clear on is the expense side; insurance, taxes, etc..
There's also rules about how much you can use it personally, I think.
Posted on 5/28/25 at 4:20 pm to horsesandbulls
What if you pay cash (I can’t at moment but just wondering down the line). Do they make money then?
And yes I realize you have to weigh this compared to other investments.
And yes I realize you have to weigh this compared to other investments.
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