- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Coaching Changes
- 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
Orange Beach Rental Ownership
Posted on 2/10/23 at 10:27 am
Posted on 2/10/23 at 10:27 am
Help me out her guys - prices for condos in OB keep going up, interest rates are increasing - how are these new buys cash flowing?
Are new owners putting down cash and settling for the same return as a money market fund with great asset value risk?
Maybe I am missing it - how do values not plummet if rates keep increasing?
Are new owners putting down cash and settling for the same return as a money market fund with great asset value risk?
Maybe I am missing it - how do values not plummet if rates keep increasing?
10
Posted on 2/10/23 at 10:34 am to KillTheGophers
quote:
Maybe I am missing it - how do values not plummet if rates keep increasing?
Inventory is still low.
Posted on 2/10/23 at 10:36 am to KillTheGophers
All valid questions. I cannot speak for Orange Beach per se - but I know a little about the Destin area as I own there.
In my neck of the woods, a significant portion of the deals are cash or heavy cash which puts less reliance on rates.
However, not surprisingly, the pricing is highly correlated to rental income and rental income the last few years has increased significantly (40% plus in our case). Accordingly, we have seen comps match that increase.
Now to be clear, one good recession and you will have a giant drop. We bought not expecting to cash flow, but instead are looking for somewhere to go several times a year and to retire there in the upcoming years. I baked in that I would not cash flow. Last year we did positively cash flow by a healthy margin. Bookings this year are suggestive of the same. I do not bank on it personally but it has been nice.
In my neck of the woods, a significant portion of the deals are cash or heavy cash which puts less reliance on rates.
However, not surprisingly, the pricing is highly correlated to rental income and rental income the last few years has increased significantly (40% plus in our case). Accordingly, we have seen comps match that increase.
Now to be clear, one good recession and you will have a giant drop. We bought not expecting to cash flow, but instead are looking for somewhere to go several times a year and to retire there in the upcoming years. I baked in that I would not cash flow. Last year we did positively cash flow by a healthy margin. Bookings this year are suggestive of the same. I do not bank on it personally but it has been nice.
Posted on 2/10/23 at 11:18 am to KillTheGophers
Rental income for everybody was crazy last year. We usually see people from as far north as Kentucky coming to rent our place, but we had people from Michigan, Minnesota, and Canada even coming to Perdido Key to vacation.
Bookings have been pretty solid for us this year with the summer mostly booked, but I think the demand has slowed slightly from the craziness of last year. We cash flowed last year big time, granted our mortgage for our place isn't very much. HOA dues are now more than our mortgage/insurance payments.
Bookings have been pretty solid for us this year with the summer mostly booked, but I think the demand has slowed slightly from the craziness of last year. We cash flowed last year big time, granted our mortgage for our place isn't very much. HOA dues are now more than our mortgage/insurance payments.
Posted on 2/10/23 at 11:52 am to Triple Bogey
I can make money on OB condos if u never stay there
We break even but we stay there a lot
Putting down at least half helps
We break even but we stay there a lot
Putting down at least half helps
Posted on 2/10/23 at 12:07 pm to igoringa
quote:
All valid questions. I cannot speak for Orange Beach per se - but I know a little about the Destin area as I own there.
In my neck of the woods, a significant portion of the deals are cash or heavy cash which puts less reliance on rates.
However, not surprisingly, the pricing is highly correlated to rental income and rental income the last few years has increased significantly (40% plus in our case). Accordingly, we have seen comps match that increase.
Now to be clear, one good recession and you will have a giant drop. We bought not expecting to cash flow, but instead are looking for somewhere to go several times a year and to retire there in the upcoming years. I baked in that I would not cash flow. Last year we did positively cash flow by a healthy margin. Bookings this year are suggestive of the same. I do not bank on it personally but it has been nice.
What condo you own? Prices for the summer are crazy stupid..
Posted on 2/10/23 at 12:35 pm to KillTheGophers
quote:
Help me out her guys - prices for condos in OB keep going up, interest rates are increasing - how are these new buys cash flowing?
Cash flow is just a small portion of the market. Eh, maybe not in Gulf Shores. But a lot of rental locations.
Diversification of assets and a 2nd home that is for the most part an appreciating asset is a big portion. Many are just using rentals to justify it as an appreciating asset and to pay the bills.
Wealthy people like having 2nd and 3rd homes they can go to, and when shite was shut down for Covid and they had no where to go their friends with rental properties had somewhere to go.
As expensive as properties are, rents are just as high. So guys with wives that want to go to the beach 3-4 trips a year don't mind having an asset their wife can use that doesn't cost them money. Sometimes the mental gymnastics of that don't make sense on paper as much as they do in their heads.
ETA: A major factor not considered is that all of the current owners that have owned for 2+ years have significant equity. If they were to sell, they have a big question of what to do with the profits? Well to 1031 doesn't make sense really? Everything is expensive. Stock market? For most its a diversification out of the stock market. So now what?
This post was edited on 2/10/23 at 12:37 pm
Posted on 2/10/23 at 12:42 pm to igoringa
Same experience in Colorado. Covid did wonders for rental rates and property values.
Posted on 2/10/23 at 1:41 pm to Double Oh
quote:
What condo you own?
We are in Destin Gulfgate - we do not set pricing as there is an onsite rental/HOA, but yes prices have accelerated quickly - but are renting.
Posted on 2/10/23 at 1:50 pm to OTIS2
quote:
Same experience in Colorado. Covid did wonders for rental rates and property values.
Been going to Beaver Creek since 2004. I just could not justify it this year.
Posted on 2/10/23 at 3:51 pm to igoringa
quote:
We are in Destin Gulfgate - we do not set pricing as there is an onsite rental/HOA, but yes prices have accelerated quickly - but are renting.
Wow thats where we stay. July 4th prices from the 1st-8th were like 7-8K.
Posted on 2/10/23 at 4:54 pm to go ta hell ole miss
quote:
I just could not justify it this year.
Rates have definitely increased steeply over that last 2 to 3 years. It'll be interesting to see if there's a pull back at some point. Skiing ain't cheap...skiing at peak times is god-awful expensive now.
Posted on 2/10/23 at 6:25 pm to go ta hell ole miss
quote:
I just could not justify it this year.
We skipped skiing this year as well - we started at DV - downgraded to PC main - still too much, kicked it to keystone - and we refused to pay the prices keystone was demanding
Posted on 2/10/23 at 7:52 pm to KillTheGophers
There are fixing to be a lot on the market, also the Hoa cost monthly are going to skyrocket with insurance
Posted on 2/10/23 at 7:54 pm to OTIS2
quote:
Same experience in Colorado. Covid did wonders for rental rates and property values.
I need to come down so I can look
Posted on 2/10/23 at 9:16 pm to Double Oh
quote:
Wow thats where we stay. July 4th prices from the 1st-8th were like 7-8K.
Thank you for your service lol.
Yes and ours just got picked up for 5 days 7/3 to 7/8 for basically 5k
My wife and I stayed there 20 years ago and fell in love. Bought in 2020 and renovated
Posted on 2/11/23 at 6:40 am to KillTheGophers
As others have said it's really tied to rental prices.
We are also looking, but for a rent-restricted building. Prices on low density and rent restricted buildings have definitely come down some. They are still way up though.
We are also looking, but for a rent-restricted building. Prices on low density and rent restricted buildings have definitely come down some. They are still way up though.
Posted on 2/11/23 at 10:40 am to igoringa
quote:
Thank you for your service lol.
Yes and ours just got picked up for 5 days 7/3 to 7/8 for basically 5k
My wife and I stayed there 20 years ago and fell in love. Bought in 2020 and renovated
Nice..
We stay out of the summer months and usually go in the fall and spring. Too expensive in the summer and too many people.
Posted on 2/11/23 at 10:57 am to Double Oh
Unit 1001 will welcome you with open arms :)
Posted on 2/11/23 at 8:40 pm to KillTheGophers
Yes I agree it is crazy. We bought a 3/2 on the beach in early 2021 for $405k, and it needed about $20k of updates. My rate is like 2.75%. We do quite well. We could probably sell for like $640k now, but with rates as high as they are, I think it would be tough to cash flow.
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News