Georgian said:
Heck why don't they just put them all on a rental program and sell them in a few years after the airport goes in? After all for those of us that not only invest in land but in stock wouldn't this make more sense. JOE is up 100% over the past 12-18 months.
Because they'd be effectively renting at a loss until the airport issue is settled. For renting a property with a long term lease, your rent needs to be 10% gross value of the property every year in order to justify the investment. For short term rental, I'd guess you need somewhere in the 25%+ gross range because of much higher maitenance and management expenses.
Considering down here, ads will brag that a short term unit is getting almost 10% gross, I'd guess not many people who bought recently are getting anywhere close to 20% gross.
Yeah, you can anticipate increases in property value, but remember that those increases can vary more widely than the stock market. You can have a 2-3 year period of time where values increase in the 20-30% annual range, and then a five year period of time where you're back to 2-3% annual range. The bean counters don't like that kind of uncertainty.
And the trend in the industry says that the real money comes from managing properties, not from directly owning them. The big hotel companies all seem to be selling off the properties they own to franchisees. Even around here in the bigger resorts like Seaside, Sandestin and Bluewater Bay, the parent company manages units, not owns them directly.