Rental Investment Questions

[Matt J]

Ok Snarky,

All of our homes are considered large. Three of our homes are 75% booked in October, mostly family, friends and clients per gratus. Two of our homes are 100% booked absolutely solid, from Thanksgiving thru April. Quite frankly the large homes do so well in the summer( rental rate and occupancy wise )that the off season rentals are icing on the cake. Having that prime season cash in hand is a good thing not a bad thing. Interesting enough, the last two rental seasons have been our two best. With less people buying, more people are renting.

What works for one person may or may not work for another. Paula does a great job with her homes and it works for her. I believe her post summarizes it the best. Buying into South Walton almost 10 years ago has the been the best decision we have ever made. Not only because of the property but because of the friends and neighbors we have met. I see market conditions as an opportunity not a problem.

Side note : Paul, please give Gretchen and Bob a big hug next time you see them. We missed an opportunity to see them a couple weeks ago.

Well Snarky, your turn what are your occupancies on your seasonal rentals that are the basis of your advice?

My experience was based on the 50+ rentals I managed. Growing up we had a beach house that we didn't rent out since we had too much personal stuff in it and didn't like the idea of strangers using it. We also rented various houses from St. George Island to Pensacola growing up when we wanted something different.

I'm assuming that your homes are located in Grayton and you don't mind weddings?

I guess I wasn't clear on my OP that location is a big part as well. Drive through Seacrest Beach, Rosemary, WaterSound, or WaterColor during January and February, ghost towns.

I'll also point out that your counting occupancy when the unit is "rented" by friends or family paying nothing. How does that income model work out?

I'm not trying to argue with you I just think the the OP is looking for information and that's what I was trying to give.

My final point of advice:

Many rental companies have provisions for use during peak times (Memorial Day to Labor Day) so it's something to take into consideration as well.

 

[Miss Kitty]

Well, hail...enough of this talk. I am heading on over to enjoy my second home in sowal!

Paula...wish you could join me!

 

[Paula]

Miss Kitty. I would love to join you on one of my trips to SoWal and we can enjoy our beach homes and the beach together. Once the kids are in college, I'll be heading to SoWal much more often (that was the plan and it's getting closer).

 

[Rather B Paddlin]

My experience was based on the 50+ rentals I managed. Growing up we had a beach house that we didn't rent out since we had too much personal stuff in it and didn't like the idea of strangers using it. We also rented various houses from St. George Island to Pensacola growing up when we wanted something different.

I'm assuming that your homes are located in Grayton and you don't mind weddings?

I guess I wasn't clear on my OP that location is a big part as well. Drive through Seacrest Beach, Rosemary, WaterSound, or WaterColor during January and February, ghost towns.

I'll also point out that your counting occupancy when the unit is "rented" by friends or family paying nothing. How does that income model work out?

I'm not trying to argue with you I just think the the OP is looking for information and that's what I was trying to give.

My final point of advice:

Many rental companies have provisions for use during peak times (Memorial Day to Labor Day) so it's something to take into consideration as well.

Grayton Beach, nope. Weddings, never. Snowbirds are the best.

Income model is simple. While expecting nothing in return from family, friends, vendors, and clients, the returns have far exceeded an off season weekly rental rate. The experiences that our family and friends have had at the beach have been priceless. We are so glad that we could do that for them. Additionally, our vendors and clients have shown their monetary appreciation many times over.

Everyone says the same thing. Sowal has the most beautiful beaches, the best restaurants, and they would love to go back next year.

If you could afford it, go for it. Life is about the journey not the destination.

 

[Paula]

Grayton Beach, nope. Weddings, never. Snowbirds are the best.

Income model is simple. While expecting nothing in return from family, friends, vendors, and clients, the returns have far exceeded an off season weekly rental rate. The experiences that our family and friends have had at the beach have been priceless. We are so glad that we could do that for them. Additionally, our vendors and clients have shown their monetary appreciation many times over.

Everyone says the same thing. Sowal has the most beautiful beaches, the best restaurants, and they would love to go back next year.

If you could afford it, go for it. Life is about the journey not the destination.

RBP. I feel the same about experiences. I offer one of our cottages to friends every year in august so that we can travel together. Memories - absolutely priceless. We talk about our trip together all year long. We swoon over our memories (good memories are really the only guaranteed thing I can leave to the kids in the long-run). Owning a beach house was on my bucket list.

 

[SHELLY]

RBP. I feel the same about experiences. I offer one of our cottages to friends every year in august so that we can travel together. Memories - absolutely priceless. We talk about our trip together all year long. We swoon over our memories (it's really the only guaranteed thing I can leave to the kids in the long-run). Owning a beach house was on my bucket list.

There's nothing wrong with owning a beach home that one can easily afford--especially if it's on your "bucket list." Now...when one talks about a beach home as an "investment"--that's a whole different animal.

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[Paula]

There's nothing wrong with owning a beach home that one can easily afford--especially if it's on your "bucket list." Now...when one talks about a beach home as an "investment"--that's a whole different animal.

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Yup, I think we're very much in agreement here. I simply like to emphasize how much joy we've had with our cottages because we can afford them. It's not as easy as a walk in the park (still have mortgages to pay and rentals to manage), but it has been well worth the planning and effort. I'm shuddering at the thought of winter - even the cold fall -- approaching here. This is my last few weeks (maybe last week) being able to sit outside on the porch reading/relaxing/working up here in Michigan. I won't be sitting on the porch for hours at a time again until after mid-May most likely. So, I'm savoring the thought of saying goodbye to the snowy, cold winters some day and settling into my home at the beach. And then coming back to Michigan for the beautiful spring, summer, and falls.

 

[Rita]

Well, sounds like this thread has given anyone thinking about buying a second home a lot to think about. Works for some people (like me) and not others. So, I have nothing more to add here.

My mind these days is focused much more on "is it worth paying for private college?" Even more so, how do you make private college worth it in the long run if a private is a really good fit for someone? But these aren't questions for this thread. I would think the trade-offs are even more complicated to figure out than for beach homes because the benefits/costs are less tangible.

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I think you should start a new thread regarding these thoughts, as we are also in a somewhat similar situation. HS Senior getting very excited and very much interested in an out of state university (public though so fewer scholarship opportunities - we are assuming anyway)
I would love to hear people's experiences & thoughts.

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[30ashopper]

Grayt thread!

 

[Paula]

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I think you should start a new thread regarding these thoughts, as we are also in a somewhat similar situation. HS Senior getting very excited and very much interested in an out of state university (public though so fewer scholarship opportunities - we are assuming anyway)
I would love to hear people's experiences & thoughts.

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OK, I'll go do it now in the lounge. Would love to hear thoughts about college.