Rental Investment Questions

This sounds SOOOO different than a "good investment property." If this is the real wants, and you can afford it, go for it.

Yup, Smiling Joe says it best. Once you've thought through the details of what kind of place you want an you're sure you can afford it, etc., then you can enjoy it, as we do, with all your heart. This morning we ran into some friends downtown where we live. They came to the cottages with us this summer and we were all still basking in our memories of the time we spent together. We were beaming wistfully at the memories we shared and talking about how much we look forward to next summer when we can do it all again.

As for the hardiplank, our's looks very good - the only problems are where I mistakenly got some bleach on a part of it and that faded it and where the painter dripped some white paint on the side. Other than that, it looks very good, as does the hardiplank on all the cottages in our community. The white trim/carports on the other hand need to painted at a minimum every 5 years (to look really fresh, I think it's more like 3 years).

Sunburst is a rental management company, but they also provide the service of 2nd home watch for those that don't want to rent their home out. There are several other companies in the area that do the same thing. Spouses Watching Houses is one too. They come by and walk through your house checking the plumbing, doors, windows, etc. We used one before we moved here and it saved us thousands in the first week when they discovered a leak. Cheap insurance.

Thanks! Now I have that answer And you're right sounds like you could have had some major damage. We have always thought it might be a bad idea to have a fridge with an icemaker because the amount of water when one of those gets damaged.

Thanks! Now I have that answer And you're right sounds like you could have had some major damage. We have always thought it might be a bad idea to have a fridge with an icemaker because the amount of water when one of those gets damaged.

...its not just icemakers; dishwashers, washing machines, toilet supply lines--anywhere there's water under pressure that's going to be left unattended for an extended period of time can be troublesome. I always turn the water off at the main when I'm on an extended trip out of town--and use no-burst stainless steel supply lines.

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Im a little confused as how some may say beach property isnt an investment....if you buy a nice condo in the right spot for the right price....it can cash flow pretty easily or get real close....that looks like a good investment to me.....with that said I wouldnt want to count on rental income 100%.....I can understand property not cash flowing 2 years ago due to crazy high prices but if you can buy one now for 50% less....it does make it a little easier.

Im a little confused as how some may say beach property isnt an investment....if you buy a nice condo in the right spot for the right price....it can cash flow pretty easily or get real close....that looks like a good investment to me.....with that said I wouldnt want to count on rental income 100%.....I can understand property not cash flowing 2 years ago due to crazy high prices but if you can buy one now for 50% less....it does make it a little easier.

...there are those pesky "if's" again!

....buy for 50% less than speculative bubble prices? Still too high.

This area isn't a 365-day vacation destination and the competition for vacationers has exploded over the past several years. There will be a time in the not too distant future when public access to the beach in this area will be all but totally cut off--then those "bargain smell-the-gulf-view" investment properties will be even more of a bargain.

Too many people who purchase a vacation home because they "luv-luv- -luv" it here are just using the "investment" argument to justify tossing their cash into a property they can barely afford. "Real investments" have absolutely no heart-strings attached.

Throwing money into a depreciating asset with zero-to-negative annual return isn't an investment at all--it's either owning a second home or "investulating."

Im a little confused as how some may say beach property isnt an investment....if you buy a nice condo in the right spot for the right price....it can cash flow pretty easily or get real close....that looks like a good investment to me.....with that said I wouldnt want to count on rental income 100%.....I can understand property not cash flowing 2 years ago due to crazy high prices but if you can buy one now for 50% less....it does make it a little easier.

I still don't think you can find anything that will truly "cash flow" unless of course you pay all cash and the only thing you need to cover with the rental income are taxes, insurance, utilites, HOA dues and maintenance.

I still don't think you can find anything that will truly "cash flow" unless of course you pay all cash and the only thing you need to cover with the rental income are taxes, insurance, utilites, HOA dues and maintenance.

Could a few people please show some examples of what they think a condo in a prime area of seaside or watercolor would do for the year in rental income... 2br, 2.5 bath, sleeps 6.

How many weeks a year are considered prime?

Could a few people please show some examples of what they think a condo in a prime area of seaside or watercolor would do for the year in rental income... 2br, 2.5 bath, sleeps 6.

How many weeks a year are considered prime?

won't you be my neighbor?

Could a few people please show some examples of what they think a condo in a prime area of seaside or watercolor would do for the year in rental income... 2br, 2.5 bath, sleeps 6.

How many weeks a year are considered prime?

Well, if you get on VRBO you will see a two bed/2 bath condo sleeping 6 in WC renting from $1490-$2485 a week depending on the season. If your LUCKY you MIGHT rent 20 weeks a year. This is just to give you a model. A realtor can retrieve rental histories for the units. Anyway, lets say you have a rock-n-roll year and rent for 20 weeks. Here's a sample:

- 10 weeks of prime summer season @ $2485.00
- 06 weeks of prime spring break season @ $1990.00
- 02 weeks of winter/fall season @ $1245.00
-02 weeks of winter holidays @$1490.00

That is a total of $42260.00 in rental. Now if you use a rental management company they get anywhere from 25-40% of that. Let's be aggressive for you and say your with a 25% company and they only charge you 10% when you book yourself on VRBO, of which you do half the time. You would owe them $7395 for their services. You get $34865.00. Let's go even further and say you just bought the least expensive two bed/two bath condo in WC which is $595,000 for 25% off the asking price (which again is aggressive). You would buy the property for $446,250. If you financed, you'd put 20% down and have a mortgage of $357,000. Now ROUGHLY your monthly mortgage would be $2200.00 with only flood insurance. A condo in WC has a $1000.00 a month association dues. Your monthly nut is $3200.00 with only flood. That will run you $38,400.00 for the year. I don't have numbers on further insurance for a condo so I can't begin to speculate. O.k.,

phone/internet: $70.00
cable: $40.00
electricity: $150.00
heat: $150.00
interior maintenance/repairs: $300.00

total $710.00 a month or $8520.00 a year for a total of $46,920.00 in expenses.

That puts you at about $12,055.00 a year in the hole or approx. $1004.00 a month if you got the best deal in WC and had a banner year. Uhm, I am NOT a professional in any way, so these are just models I use. We've been walking the sidelines for a while now and this is similar to a model we use when number crunching.

...wow! Is that north or south of 30A?

...wow! Is that north or south of 30A?

the one on the market, or the one I used for sample rental charges? The one on the market is north of 30-A overlooking Cerulean Park. Actually, the one I used for sample rental charges is north of 30-A as well.

Well, if you get on VRBO you will see a two bed/2 bath condo sleeping 6 in WC renting from $1490-$2485 a week depending on the season. If your LUCKY you MIGHT rent 20 weeks a year. This is just to give you a model. A realtor can retrieve rental histories for the units. Anyway, lets say you have a rock-n-roll year and rent for 20 weeks. Here's a sample:

- 10 weeks of prime summer season @ $2485.00
- 06 weeks of prime spring break season @ $1990.00
- 02 weeks of winter/fall season @ $1245.00
-02 weeks of winter holidays @$1490.00

That is a total of $42260.00 in rental. Now if you use a rental management company they get anywhere from 25-40% of that. Let's be aggressive for you and say your with a 25% company and they only charge you 10% when you book yourself on VRBO, of which you do half the time. You would owe them $7395 for their services. You get $34865.00. Let's go even further and say you just bought the least expensive two bed/two bath condo in WC which is $595,000 for 25% off the asking price (which again is aggressive). You would buy the property for $446,250. If you financed, you'd put 20% down and have a mortgage of $357,000. Now ROUGHLY your monthly mortgage would be $2200.00 with only flood insurance. A condo in WC has a $1000.00 a month association dues. Your monthly nut is $3200.00 with only flood. That will run you $38,400.00 for the year. I don't have numbers on further insurance for a condo so I can't begin to speculate. O.k.,

phone/internet: $70.00
cable: $40.00
electricity: $150.00
heat: $150.00
interior maintenance/repairs: $300.00

total $710.00 a month or $8520.00 a year for a total of $46,920.00 in expenses.

That puts you at about $12,055.00 a year in the hole or approx. $1004.00 a month if you got the best deal in WC and had a banner year. Uhm, I am NOT a professional in any way, so these are just models I use. We've been walking the sidelines for a while now and this is similar to a model we use when number crunching.

Your purchase numbers are close, actually 500k.....but for 12k a year out of pocket and to have 32 weeks left over to rent to very aggressively or use for 12k....I cant figure out why is that so terrible....the numbers get better if you rent the condo 100% yourself on VRBO and pay a management company 10% all the time....which I know are out there. It looks like the condo could even make money with several weeks to boot........

Unlikely to happen scenario? You tell me.

Your purchase numbers are close, actually 500k.....but for 12k a year out of pocket and to have 32 weeks left over to rent to very aggressively or use for 12k....I cant figure out why is that so terrible....the numbers get better if you rent the condo 100% yourself on VRBO and pay a management company 10% all the time....which I know are out there. It looks like the condo could even make money with several weeks to boot........

Unlikely to happen scenario? You tell me.

I don't know how possible this scenario is. I have been using this for a home purchase in phase II. From the rental histories I have looked at, 15-20 weeks is not unusual for a three bedroom. The number of weeks on paper seems the same for four bedroom, you can just ask that much more per week. There is a long debate about number of rooms (how many you can sleep) and weeks of rental. I can only tell you what I have seen when we pull rental history reports on homes in phase II. Your realtor can get rental histories for you. You might be able to speak with the manager for watercolor vacation rentals and they can get the information for you as well. I think I gave you the BEST possible scenario year. IMO your expenses would only go up. I have no opinion for you either way if its good and/or bad. Only you can decide if those numbers work for you. I don't think you should count on renting it 100% yourself. The management company wouldn't really be doing its job, and they want the 25%, I'm sure. You could set a marketing/sales goal for yourself to rent VRBO a certain number of weeks and actively pursue that. Bottom line, for my husband and myself, we look at the scenario of "What if we never rent?". How does that look for us? If we can stomach it, then the renting is gravy, and MAYBE even fun. You get to offer couples and families long lasting memories. You might even develop a friendship or two and get repeat renters. It sounds like you may have already found something????

Your purchase numbers are close, actually 500k.....but for 12k a year out of pocket and to have 32 weeks left over to rent to very aggressively or use for 12k....I cant figure out why is that so terrible....the numbers get better if you rent the condo 100% yourself on VRBO and pay a management company 10% all the time....which I know are out there. It looks like the condo could even make money with several weeks to boot........

Unlikely to happen scenario? You tell me.

Most folks I know that rent on VRBO only get list price about 25% of the time. These days, everyone is looking for a deal and most owners are negotiating to get the rentals.

Your purchase numbers are close, actually 500k.....but for 12k a year out of pocket and to have 32 weeks left over to rent to very aggressively or use for 12k....I cant figure out why is that so terrible....the numbers get better if you rent the condo 100% yourself on VRBO and pay a management company 10% all the time....which I know are out there. It looks like the condo could even make money with several weeks to boot........

Unlikely to happen scenario? You tell me.

Not terrible if you can afford it, you don't mind prices on the place you just bought continuing to fall and you really, really want a second home.

Just know that once you buy a condo, getting rid of it will be very, very difficult.

Your purchase numbers are close, actually 500k.....but for 12k a year out of pocket and to have 32 weeks left over to rent to very aggressively or use for 12k....I cant figure out why is that so terrible....the numbers get better if you rent the condo 100% yourself on VRBO and pay a management company 10% all the time....which I know are out there. It looks like the condo could even make money with several weeks to boot........

Unlikely to happen scenario? You tell me.

Clearly this is a case of "My mind is made up don't confuse me with the facts."

I recommend you go on, give it a shot, and report back about your success.

Oh,...and to save you the time--all Realtors you contact will tell you "Now is a great time to buy" <same as 2004-2008>.

BTW, my ex's 2nd cousin with 5 kids and 3 dogs will be looking forward to taking advantage of those "aggressive" price drops.

Not terrible if you can afford it, you don't mind prices on the place you just bought continuing to fall and you really, really want a second home.

Just know that once you buy a condo, getting rid of it will be very, very difficult.

It's terrible if calculations are based on stale data from a time when everyone in the US was employed; credit was falling like mana from heaven; homes were ATM machines that magically produced money for vacations, cars, and flat screen TVs; inflation was non-existent, baby boomer stock portfolios were soaring in value; and unicorns were munching on jellybeans and pooping rainbows.

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melscuba, dont forget to include property taxes on that and hazard insurance. For your example, you could easily throw in $4,000 in property taxes. I guess the condo HOA covers the building's hazard and flood insurance, so you would likely be insuring only the contents.

melscuba, dont forget to include property taxes on that and hazard insurance. For your example, you could easily throw in $4,000 in property taxes. I guess the condo HOA covers the building's hazard and flood insurance, so you would likely be insuring only the contents.

Doesn't HOA cover taxes too on condos?

It's terrible if calculations are based on stale data from a time when everyone in the US was employed; credit was falling like mana from heaven; homes were ATM machines that magically produced money for vacations, cars, and flat screen TVs; inflation was non-existent, baby boomer stock portfolios were soaring in value; and unicorns were munching on jellybeans and pooping rainbows.

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I don't think the calculation are too far off. I think on the example above, you would be in the hole from $15k to $25k per year (the maintenance costs per year are way low considering furniture, electronics, etc replacements on a rental property). If this person really, really wants the second home, they can afford to a take a loss on the property value, and they can easily absorb some annual losses, go for it.

It's a bad financial deal, but if it's good for the emotions and the losses don't bother you or hurt you. No problem.

Clearly this is a case of "My mind is made up don't confuse me with the facts."

I recommend you go on, give it a shot, and report back about your success.

Oh,...and to save you the time--all Realtors you contact will tell you "Now is a great time to buy" <same as 2004-2008>.

BTW, my ex's 2nd cousin with 5 kids and 3 dogs will be looking forward to taking advantage of those "aggressive" price drops.

You are cracking me up.......my mind is sort of made up, if it doesnt rent at all I can easily afford it but thats not what I want to do....I want to make it cash flow itself. I was just trying to find out at what point do people think a condo facing 30a and steps from the beach would cash flow.....and my aggressive price drops dont have to be that low....i guess you arent into horse racing the difference between the winner and 2nd place is sometimes only inches.

Doesn't HOA cover taxes too on condos?

Insurance and taxes are points I just don't know much about with regard to condos. My husband and I are have been focused on single family homes, so I honestly don't have those pieces of info. I hope I made that point when I gave the sample.

You are cracking me up.......my mind is sort of made up, if it doesnt rent at all I can easily afford it but thats not what I want to do....I want to make it cash flow itself. I was just trying to find out at what point do people think a condo facing 30a and steps from the beach would cash flow.....and my aggressive price drops dont have to be that low....i guess you arent into horse racing the difference between the winner and 2nd place is sometimes only inches.

A condo in Watercolor won't cash flow-period (assuming you don't pay cash and forego the return on the capital invested).

However, if cash flowing isn't the issue and you aren't looking for an investment but instead a second home, go for it and enjoy (but you might want to wait another 6 to 12 months for prices to fall further and rent in the meantime).

A condo in Watercolor won't cash flow-period (assuming you don't pay cash and forego the return on the capital invested).

There obviously has to be a point where they will cash flow......at what point does everyone feel a condo in WC would break even....matter of fact even break even AFTER the 20% down payment.

There obviously has to be a point where they will cash flow......at what point does everyone feel a condo in WC would break even....matter of fact even break even AFTER the 20% down payment.

I think you would get close to breakeven at a $275k purchase price with 20% down ASSUMING rental rates did not fall along with real estate prices.