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Im4datigers
LSU Fan
Northern Virginia
Member since Oct 2003
3679 posts
 Online 

Rental properties - Sandestin, Seaside, Seagrove, Water color

Anybody out there own any? Sitting on the sidelines waiting did a small correction, but who owns anything along this corridor? Good bad, ugly etc?

FWIW - not looking for a dime a cash flow from a purchase. Would plow everything back into the property or reserves. Just looking for some investment CRE that I can have somebody else pay the note on the next 15-20 years and the sell it at retirement.


LesMilesNoMoe
Grambling Fan
El Paso
Member since Jun 2022
23 posts

Meh...invest it in the market. This is too over priced right now.


Im4datigers
LSU Fan
Northern Virginia
Member since Oct 2003
3679 posts
 Online 

Agreed but it’s coming down. Slowly declining over the past few years.

Also, this is a buy it and put it to bed for 15 years. I’m not looking to flip it, not looking for a dime of cash flow out of it etc. just looking to build up equity and reserves to sell it in 15 years.

I have plenty of money in the market. Need to diversify some anyway.


GEAUXT
USA Fan
Member since Nov 2007
28133 posts

The prices need to come down ALOT. in Rosemary prices have doubled, or more, on almost everything in the past 2 years. It's insane.


Catchfalaya
LSU Fan
Member since Feb 2018
1664 posts

If you have a really good property company managing the rental you can make some serious income owning one of these. I’d say the average rental rate including all seasons is around $800 a night. If you can rent it out 80% of the year (269 days) you’d bring in around $20,000 a month in rental income.


tide06
Alabama Fan
Member since Oct 2011
6254 posts
 Online 

It’s not what you want to hear but you need to wait a year or two.

The market in that area is slowing way down.

I don’t think current valuations can hold because as rents jump to match valuations it’s not clear to me that people can afford to rent a third row home for what a beach front house was going for 3-4 years ago in a declining economy.

The only wild card right now is the influx of people moving due to Desantis and remote work. No one knows how that plays out long term, but I don’t know anyone who thinks 30A real estate is higher in 2023 than it is right now.


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100
TigerMan327
LSU Fan
Elsewhere
Member since Feb 2011
4190 posts

You think the average rate, including winter months, is $800 a night?? And you expect 80% occupancy throughout the year on a beach rental? Where are your beach rentals baww???


I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
36846 posts

quote:

Rental properties - Sandestin, Seaside, Seagrove, Water color


Zero ROI on these things at the moment. Look into some international beach spots that are not only nicer, a fifth of the price and much more upside.



baldona
Auburn Fan
Florida
Member since Feb 2016
17398 posts

quote:

FWIW - not looking for a dime a cash flow from a purchase. Would plow everything back into the property or reserves. Just looking for some investment CRE that I can have somebody else pay the note on the next 15-20 years and the sell it at retirement.


It’s not this easy. Your ROI paying cash with a less than great rental purchase could be 3%, interest rates are 6% now. So you could be in a situation where you are needing to spend money yearly on your mortgage or bills.

Watercolor is never a good investment fwiw, as far as rental returns I mean.



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20
frogtown
Georgia Fan
Member since Aug 2017
1431 posts

quote:

Zero ROI on these things at the moment. Look into some international beach spots


What international locations?. Please advise. Thanks.
This post was edited on 6/30 at 6:58 am


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horsesandbulls
LSU Fan
Destin, FL
Member since Jun 2008
4475 posts

quote:

Im4datigers


I live in this area. Wife is a title agent. now is not the time to buy for this stuff. We are either at or have just passed the peak. in a year or two you will have options to buy from people who are under water.


I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
36846 posts

quote:

What international locations?. Please advise. Thanks.


I am not an expert on all things international. However, to give you an example of what is available for SIGNIFICANTLY less money, check this out. $200,000 for a house on the beach.

LINK

My friend bought a beach front condo last year in Mexico for $50,000.


Upperdecker
US Space Force Fan
St. George, LA
Member since Nov 2014
26740 posts

That’s because it’s in Mexico. Nobody wants to have to fly to Mexico to go to the beach. That makes it extremely expensive, plus all the risks of being an American in Mexico. And buying it you have to navigate international realty law, taxes in Mexico, etc. And good luck finding someone to manage the property that’s trustworthy

It’s not apples to apples to compare beachfront property in driving distance in the US to beachfront property in Mexico. There’s a reason there’s a price factor difference
This post was edited on 6/30 at 8:16 am


I Love Bama
Alabama Fan
Alabama
Member since Nov 2007
36846 posts

Agree to disagree.

I can get to anywhere in Mexico in just about the same amount of time it takes to fight traffic going to the panhandle.

For me the 75% cost savings is worth it, but I understand for others they would not like that set up.

It is just something to consider.


go ta hell ole miss
New York Yankees Fan
Member since Jan 2007
12491 posts

quote:

If you have a really good property company managing the rental you can make some serious income owning one of these. I’d say the average rental rate including all seasons is around $800 a night. If you can rent it out 80% of the year (269 days) you’d bring in around $20,000 a month in rental income.


You are also going to have to pay that management company 30%, and then pay taxes, depreciation costs, insurance and/or high HOA fees. You can break even in the right situations, particularly on one bedrooms in OBA, but one bedrooms are not what anyone is looking for in the areas the OP described.

The condos are in the early stages of a decline in prices. I did not think that would happen two months ago, but I was clearly wrong. I suspect there will be at least a 20-25% market correction in the next 18 months. I am almost always in the market, but have no desire to purchase any time soon given the market uncertainty right now and relatively high jumbo rates.
This post was edited on 6/30 at 11:27 am


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60
tigerfoot
LA-Monroe Fan
Alexandria
Member since Sep 2006
50773 posts
 Online 

quote:

If you can rent it out 80% of the year (269 days) you’d bring in around $20,000 a month in rental income.
this ain’t happening. May to end of July you may rent it a bunch but after that it is spotty


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30
NorthEnd
LSU Fan
Member since Oct 2007
1971 posts

Own one in Sandestin. Thought I bought at the peak, but it's value is up 50% in the last two years. Everything in Sandestin is still selling the first 24-48 hours on the market.

That said- here's my financials on it in a nutshell.

Purchased at 525(my unit selling for 750-850 now)--put 120 down. 2.8% @ 30 years yields a 1800ish mortgage. Condo fees, HOA, taxes etc is another 1000/ month.

Costs me $3000/month to hold it
Rents really well in summer as expected. Rental co takes 25%. I net about $3000/month on average from them. Summer mighr be 7-8k/month, and may not get but 1000 or so in november or feb. Basically-it pays it's holding costs but no more. At the end of the day I'm getting an appreciating asset paid for and that doesn't suck, but it's not making me rich.
This post was edited on 6/30 at 9:52 am


Upperdecker
US Space Force Fan
St. George, LA
Member since Nov 2014
26740 posts

I’m just arguing there’s a number of barriers inherent to international property and specific risks to buying in Mexico that will present as legitimate cost factor differences


tide06
Alabama Fan
Member since Oct 2011
6254 posts
 Online 

The other factor that while it’s been discussed can’t be overstated is the insurance issue.

There isn’t a top ten insurer in America who will write a policy in coastal Bay or Walton county right now unless you are building in concrete right now. Not one.

Flood insurance is 2x-3x where it was a few years ago and Biden is threatening to not issue new policies in flood zones which they’ve now greatly expanded.

For example a house that would’ve been a 4/10 on the scale is now probably a 7/10. $$$$$

Then you look at the homeowners policies you can get and you will find half the players have gone bankrupt so you’ll have to take whatever you can find and hope they don’t cancel your policy if you have a claim.
This post was edited on 6/30 at 12:09 pm


Aubie Spr96
Utah Fan
lolwut?
Member since Dec 2009
36582 posts

quote:

The prices need to come down ALOT. in Rosemary prices have doubled, or more, on almost everything in the past 2 years. It's insane.





My father-in-law sold his condo near 30A in 2010 I believe. He got $170K for it. We looked up listings in the same complex when we went this year and they were going for $400K +. Amazing especially considering the association fees and insurance required to simply hold the asset.


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