It's gonna be hard to better than this in WaterSound Beach

[needacoolname]

I'd like to thank everyone for all of their input on my cash flow question. I know it takes time and effort to respond to these questions and I do appreciate everyones thoughts and insights .

So on the income side, on the low end it might be a very very slow summer (thanks sowalgayboi, keep whistling) up to (an apparently skeptically received) 55,000( thanks AAbsolute). So I think I've got some numbers here.

On the Monthly cost side, I've got:
Mortgage: 3383(Principle + Interest, only, 550K total, 20% down, @ 8.5)
Taxes: 364( Walton county pa web site county rate @550,000 market value)
Utilities: 300
HOA: 332
Maint: 458( 10% of max estimated income )
Property management: 1800(40% of 55,000 /12 )
Insurance: 500???( Please help, I've searched this forum, I've goggled, can't figure a way to estimate full insurance for this property. I know its going to be bad )

Using the highest income estimate of 55,000 l have to carry: 2554 (7137cost-4583income)

Is it possible to manage it myself even though I live 3 hours away to save $$$ ?

So, this property at a 50% discount will have a negative cash flow of 2500 at best. Does that seem about right or am I missing something? How do the people who paid the full million for their watersound rentals do it ? Just to be clear, I am not trying to be negative or sarcastic in any way, just trying to learn a little about walton beach real estate.

Thanks again

 

[SHELLY]

On the Monthly cost side, I've got:
Mortgage: 3383(Principle + Interest, only, 550K total, 20% down, @ 8.5)
Taxes: 364( Walton county pa web site county rate @550,000 market value)
Utilities: 300
HOA: 332
Maint: 458( 10% of max estimated income )
Property management: 1800(40% of 55,000 /12 )
Insurance: 500???( Please help, I've searched this forum, I've goggled, can't figure a way to estimate full insurance for this property. I know its going to be bad )

Using the highest income estimate of 55,000 l have to carry: 2554 (7137cost-4583income)

Is it possible to manage it myself even though I live 3 hours away to save $$$ ?

So, this property at a 50% discount will have a negative cash flow of 2500 at best. Does that seem about right or am I missing something? How do the people who paid the full million for their watersound rentals do it ? Just to be clear, I am not trying to be negative or sarcastic in any way, just trying to learn a little about walton beach real estate.

Thanks again

You are missing something....you're using the "Highest Income Estimate of $55,000" when you're figuring your possible gains/losses--you'd better figure the worst case scenerio...if you can financially handle that, then you'll be OK. Can you dig it?

.

 

[needacoolname]

You are missing something....you're using the "Highest Income Estimate of $55,000" when you're figuring your possible gains/losses--you'd better figure the worst case scenerio...if you can financially handle that, then you'll be OK. Can you dig it?

.

Yep, best case is 2554, worst case is 5337( no income, no management fee( but I bet they will still find away to charge me something even if they don't bring any renters)

 

[needacoolname]

You are missing something....you're using the "Highest Income Estimate of $55,000" when you're figuring your possible gains/losses--you'd better figure the worst case scenerio...if you can financially handle that, then you'll be OK. Can you dig it?

.

Yep, best case is 2554, worst case is 5337( no income, no management fee( but I bet they will still find away to charge me something even if they don't bring any renters)

 

[Matt J]

40% is the high end of management fees. Talk to some of the other rental companies and the area and your looking at something more reasonable like 15-30%.

 

[SHELLY]

Yep, best case is 2554, worst case is 5337( no income, no management fee( but I bet they will still find away to charge me something even if they don't bring any renters)

You might also want to figure in the cost of furnishing and equipping the joint...I know when I drop $3500 per week for a vacation rental, I expect more than plastic K-mart chairs; a cable spool-dining table; a Goodwill futon; and Goose pattern melamine dishes.

Start with a decent $120+ coffee maker; (and a coffee bean grinder), and work up from there.
.

 

[AAbsolute]

You might also want to figure in the cost of furnishing and equipping the joint...I know when I drop $3500 per week for a vacation rental, I expect more than plastic K-mart chairs; a cable spool-dining table; a Goodwill futon; and Goose pattern melamine dishes.

Start with a decent $120+ coffee maker; (and a coffee bean grinder), and work up from there.
.

We talked a bit already about an interiors and rental ready finish of $35,000. I don't know the interest carry on $35,000 so it needs to be calculated. There are some home furnishing companies doing 12 months/0 down/same as cash. I furnished one 5 bed/5 bath in WaterSound Beach for 17,800 excluding sheets, dishes, etc.

 

[AAbsolute]

Yep, best case is 2554, worst case is 5337( no income, no management fee( but I bet they will still find away to charge me something even if they don't bring any renters)

All the VRBO links I proferred were rentals by owner. In that scenario there is no $1,800 per month in maintenance fees. I think you'll find that most successful VRBO's have small, local cleaning/maintenance companies handling the check out responsibilities for about $200.00 per visit on average. The trade off is that you may well get WaterSound Beach's Cottage Rental Company to take this home into their program and possibly gross $65,000. They charge a full service rental management fee, but your guests get use of the WaterSound Beach club as part of their program.

 

[AAbsolute]

Yep, best case is 2554, worst case is 5337( no income, no management fee( but I bet they will still find away to charge me something even if they don't bring any renters)

With a wise VRBO plan you may now be talking about $850/mo as part of an overall plan. I think you'll find if you interview VRBO users that they get a predictable amount of repeat renters. The individuals I know treat this as a business and track their advertising successes and failures to adjust their listings over time.

I believe that this $450,000 WaterSound Beach home with thoughtful finishes will completely cash flow by the 3rd season and be profitable from that point forward for many years. WaterSound is JOE's main brand now and WaterSound Beach is the pinnacle of the brand.

I believe this home could be finished and decorated rental ready for under $600,000 and sell for $825,000 within 100 days.

 

[SHELLY]

I believe this home could be finished and decorated rental ready for under $600,000 and sell for $825,000 within 100 days.

...why aren't you doing it then?

.