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re: Rental properties - Sandestin, Seaside, Seagrove, Water color
Posted on 7/1/22 at 9:50 am to Shaun176
Posted on 7/1/22 at 9:50 am to Shaun176
quote:
If a hurricane hits or there is another oil spill, you might not be able to rent it out for months.
I would imagine just like a normal investment property there are riders to your insurance policy to cover loss of rents in the event of something like this. Although I know an act of God or Terrorism is sometimes excluded.
1
Posted on 7/1/22 at 7:07 pm to Im4datigers
quote:
Honestly, and don’t take this the wrong way, but my feeling is that places like orange beach, Pensacola, ft Walton suffer first particularly on the rental income. Those the pride elasticity is there as with recessions those folks aren’t spending as much or vacationing as much. It SEEMS like places like seaside and water color tend to attract the more higher ticket vacationer and thus aren’t as prone to recession and price elasticity.
Interested to hear others take on that though.
This is definitely true. The highest demand is 30A to Destin beachfront, then the same off the beach, then you move on to PCB, Navarre, Pensacola. Etc. OB probably is around PCB in demand. Not a lot of people go to PCB or OB due to preference, is more because its cheaper for not much less if you don't care to hang with the Jones'. So yes realistically in a recession it would be affected in reverse order.
But, there's plenty of places off the beach on 30A and destin area that have crazy high prices right now that would crash pretty hard.
The benefit that 30A has seen though, is that you can basically ALWAYS go there no matter what's going on in the world.
Posted on 7/1/22 at 7:10 pm to Im4datigers
quote:
I would imagine just like a normal investment property there are riders to your insurance policy to cover loss of rents in the event of something like this. Although I know an act of God or Terrorism is sometimes excluded.
Maybe but I've never heard of one. Loss of business insurance is extremely rare and very difficult to claim. Covid is a great example, most that had something like this were denied.
Posted on 7/1/22 at 7:45 pm to Catchfalaya
quote:
you’d bring in around $20,000 a month in rental income
What is the denominator in the ROI equation?
$240,000 per year / what investment
And at what total expense (eg, management company fees)?
Posted on 7/1/22 at 7:55 pm to baldona
Maybe but I've never heard of one. Loss of business insurance is extremely rare and very difficult to claim. Covid is a great example, most that had something like this were denied.[/quote
Actually loss of rental income due to Hurricanes is an easy claim. Nothing about COVID is covered.
Actually loss of rental income due to Hurricanes is an easy claim. Nothing about COVID is covered.
Posted on 7/1/22 at 8:11 pm to Im4datigers
quote:
Yeah that’s the only reason I don’t want a condo esp high rise condo. I don’t to get hit with special assessments out of left field. I hear if that a lot.
As someone that's been involved in both ownership of a home, townhome, and condo from afar I'll tell there's A LOT more work in upkeep on your end for anything but a condo. Furthermore, the only reason condo dues aren't cheap is because they building is maintained in essentially SAME condition. To maintain a home or townhome of the same size individually is A LOT more money. A LOT more.
The beauty of a condo for a vacation property, is you pay your dues and the exterior of the building is almost 100% set for you infititely. The interior...I mean that's fairly easy just appliances and maybe some occasional like plumbing or handy man stuff. Then whatever upgrades but that's with any properties.
Ultimately, a condo you can be a crappy owner as far as maintenance and likely nothing will likely. If you are a crappy owner in regards to upkeep on a beach house its going to fall apart on you in just 3-4 years.
Posted on 7/2/22 at 9:53 pm to baldona
quote:
The beauty of a condo for a vacation property, is you pay your dues and the exterior of the building is almost 100% set for you infititely.
Yes, so long as you have a condo board that is business savy and understand CAPEX and reserving properly. If you get a bunch of idiots on the board that like to spend money on useless shite and disregard reserve studies and sticking funds back, you can be toast real quick. Ie the building collapse in miami for an extreme case
Posted on 7/3/22 at 2:35 pm to baldona
For vacation homes (in various desirable spots not just the coast) how do property management companies work? Like if you need to do repairs to a home, do they call you up and say “the porch has got to be redone” and then arrange it from there? Or do you still have to be super involved.
Posted on 7/3/22 at 5:32 pm to I Love Bama
Better get yourself and those guests the best kidnapping and life insurance policies money can buy. Acapulco is beyond dangerous.
This post was edited on 7/3/22 at 5:33 pm
Posted on 7/3/22 at 5:55 pm to MrLSU
Wouldn’t buy a property in Mexico or outside the us to save my life (other than a real country). Mexico drug lords decide to take properties whenever the hell they want. They don’t exactly negotiate well
Posted on 7/3/22 at 8:28 pm to Im4datigers
People love to post all these super cheap options and stories on this website (and I’m sure some people are making it work well financially and/or enjoying the places), but those things always seem very risky for the average citizen.
Posted on 7/3/22 at 8:36 pm to GeauxTigers123
quote:
People love to post all these super cheap options and stories on this website (and I’m sure some people are making it work well financially and/or enjoying the places), but those things always seem very risky for the average citizen.
Agree 100%. If you own one or two (and even 5-10) and are breaking even you are doing good. I’ve found until you get to a critical number (mass) you can’t utilize economies of scale and really scale up to make money.
Vacation homes are probably even worse. Again, I’m in it to build up some equity over the next 15 years through debt paydown and appreciation and plowing all earnings right back into it. Then at the end of 15 years gut it and make it my own or sell it and buy myself something else then when I retire.
Posted on 7/3/22 at 8:53 pm to Im4datigers
I was thinking more along the lines of people talking about international stuff or even just random rental homes in regular American cities that they claim they buy for 80k on a safe neighborhood and rents for 1k. I’m sure success stories do occur, but they seem hard to come by.
But I also agree with what you are taking about.
But I also agree with what you are taking about.
Posted on 7/3/22 at 10:30 pm to NorthEnd
quote:
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 is 99.99% the case for almost all vacation rentals I’ve owned in NW Florida.
My family has been investing in NW FL since the late 80s. I jumped in after the crash in 07. At one point I owned 6 properties and none were significantly cash flow positive at the year end. The money was made buying low and selling high. My last property that sold at the end of 21 was purchased for 415 and sold 3 years later for 1.25. That same peppery sold again 3 months later for 1.5.
With that said, now is NOT the time to buy. I’m down to one rental and our vacation home which is never rented out.
This post was edited on 7/3/22 at 10:31 pm
Posted on 7/4/22 at 8:44 am to SippyCup
quote:
With that said, now is NOT the time to buy. I’m down to one rental and our vacation home which is never rented out.
Why is it never rented out? Size, location, maintenance? Not professionally managed, poor reservation system? Not a dagger, Just curious what makes a property never rent out like you mentioned? Trying to figure out if a smaller home or studio rents out easier and more often than a 2500+ size house that sleeps 10
Posted on 7/4/22 at 8:49 am to Im4datigers
I understood him to mean that he chooses never to rent out his vacation home. In other words, he treats it like a home, not a rental property.
Posted on 7/4/22 at 9:02 am to dirtsandwich
Good call. Might have misread it.
Posted on 7/4/22 at 9:17 am to dirtsandwich
quote:
he treats it like a home, not a rental property.
Correct.
As for the question of what rents better. I’ve had everything from a 2 bedroom to an 8. The 2 bedroom was harder to rent on a weekly basis but it did better when we took the limits off. The larger units are usually full from April to August and then again Thanksgiving to NYE.
Just a tip, don’t think you need beachfront. Condos yes, but homes within a block of the beach sell for less than beachfront and book up close to the same. The rental income to purchase price is better for non beachfront homes.
Posted on 7/4/22 at 9:24 am to SippyCup
How hands off are you when using a property management company? Like do they arrange minor repairs or both minor and big stuff?
Posted on 7/4/22 at 9:31 am to GeauxTigers123
Early on I refused to use a management company but as I added more and more properties it became a necessity.
They take a hefty fee but without them you need to do your own advertising, reservation management, cleaning crew, weekly inspection etc. The management companies do have a maintenance staff but it’s not cheap. If large repairs need to be done they will refer you to someone but you’re probably better off finding one on your own.
They do negotiate and I had a deal where I hired the cleaning crew and handled the majority of the repairs. I wasn’t paying $35 for them to change a lightbulb. With that said, I live 4 hours away and we use to be here around 100 days per year, if you’re not as close, it can be difficult. Time spent here seems to be less and less as my kids sports schedules expand. Little Jaxton and Brayden need their exposure for all those scouts.
They take a hefty fee but without them you need to do your own advertising, reservation management, cleaning crew, weekly inspection etc. The management companies do have a maintenance staff but it’s not cheap. If large repairs need to be done they will refer you to someone but you’re probably better off finding one on your own.
They do negotiate and I had a deal where I hired the cleaning crew and handled the majority of the repairs. I wasn’t paying $35 for them to change a lightbulb. With that said, I live 4 hours away and we use to be here around 100 days per year, if you’re not as close, it can be difficult. Time spent here seems to be less and less as my kids sports schedules expand. Little Jaxton and Brayden need their exposure for all those scouts.
This post was edited on 7/4/22 at 9:36 am
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