Wanted Considerations when buying a rental condo

Discussion in 'Real Estate' started by DCollins, Apr 6, 2018.

  1. DCollins

    DCollins Beach Lover

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    I’m considering starting a search for a rental and personal condo in seagrove. I’m trying to do the research on monthly expenses vs monthly rental income in order to see what I can expect.

    Wanted to ask for some advice and things to consider.

    1. For anyone with a condo that they rent out, how many days per year could I expect to rent out if I also want to enjoy it personally as well?

    Is 100 days per year reasonable? 150? Is 200 doable?

    2. For monthly expenses I have the following:

    Assuming I pay in full for property itself.
    -HOA = $400
    -property taxes = $185
    -insurance = $200
    -power = $200
    -water = $40
    -cleaning = $300
    -general upkeep = $200

    Am I too high/too low? Am I missing anything ?
     
  2. elgordoboy

    elgordoboy Beach Fanatic

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    One notices when visiting ones out of town friends that windows and doors tend to stay open while the AC stays on 65. Be aware of deferred maintenance issues or be hopeful of deferring some of your own maintenance issues since it is a condo and pass them along down the road. Send a private message to Shelly for better advice.
     
  3. elgordoboy

    elgordoboy Beach Fanatic

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    Admittedly I forgot about smart thermostats. Have it set up to just turn the fan on and let the dodos put it on 50 if they like.
     
  4. DCollins

    DCollins Beach Lover

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    Thanks and who is Shelly?
     
  5. Ohio Girl

    Ohio Girl Beach Lover

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    Don't own a condo, but we do have a rental home. Don't forget internet/cable. If you go with a rental agency, they will deduct a commission fee from the gross rentals; if you decide to manage the rentals yourself, you will most likely pay for a service such as VRBO or Homeaway. Ask about pest control. Not sure if HOAs handle that for condos.
     
  6. DCollins

    DCollins Beach Lover

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    Thanks. Somehow forgot about cable/internet.
     
  7. DCollins

    DCollins Beach Lover

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    Also, if you don’t mind me asking how many days per year (estimated) are you able to rent your home?
     
  8. Ohio Girl

    Ohio Girl Beach Lover

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    I sent you a message
     
  9. Mike Smith

    Mike Smith Beach Lover

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    Your question regarding the number of rental days is going to be HUGELY dependent on where the property is located, how "rentable" it is from a quality/decor/bedrooms/amenities, etc. You really need to look at or ask those who own units in your complex to get a better feel for those numbers. Look at rental rates and calendars for surrounding properties to see how far out they are renting and for how much $.

    Renters by and large want to be on the beach or very close to the beach. As you move further away, rates drop and so do occupancies. I realize I'm being captain obvious here but there are a ton of new homes coming in the market that are 1/4 mile+ from the beach that probably aren't going to meet the new owners expectations in terms of rental income.

    Water is going to be more like $66/mo - there is a minimum charge from the utility. You are going to have higher general upkeep costs: linens, deep cleans, maintenance, disappearing kitchen items, AC annual maintenance, etc. Wear and tear is higher as you get closer to the gulf. You'll also want to consider a CPA for your taxes. I'd up it to at least $300 for budget purposes. You also have to think about any assessments your HOA might have in terms of major projects such as: roof replacement, fix siding, painting the complex, parking lot, etc...

    Last piece of advice is to have a reserve of at least a year and maybe two to cover your costs. You never know when a storm or something out of your control could occur and shut things down for a while.

    Good luck with your decision!
     
  10. DCollins

    DCollins Beach Lover

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    Thanks you Mike, very good advice and information!
     

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