Excessive rental rate Hawks Nest on the Beach??

Re: Hawks Nest on the Beach

Is that the house in Grayton that sleeps about 24 people or so?

It sleeps 16 - 5BR 4.5 Baths

My guess is the wind insurance has increased through the roof and they are trying to keep a handle on it with increasing rent
Might hurt them in the long run

And taxes. And interest rates. And possibly a new owner.

If it is gulf front with a private pool, it is a fair rental rate. It will easily rent at that rental rate. Most quality gulf front homes are listed for sale at over $4 million.


rbp

What a beautiful beach house and great virtual tour

June's $6,100 rate was a bargain!

$10,000 is a fair price to sleep 16 people (8 couples/ 4 families of 4, etc.)

...esp if everyone shares in the cost.
_____________________________________________

...and just think about the entertainment value of watching everyone get stuck in the sand, from the comfort of your front porch with nice cold beverage in hand.

I haven't spoken with the owner in awhile but the house seems to have been quite full this summer. A lot of wedding parties. He also has Hawk's Landing caddy corner to the Red Bar which is also very large and does have a pool.

www.EmeraldCoastTours.com/hawkslanding
(for sale MLS# 406210, $2,975,000).

www.EmeraldCoastTours.com/hawksnest

What a beautiful beach house and great virtual tour

June's $6,100 rate was a bargain!

$10,000 is a fair price to sleep 16 people (8 couples/ 4 families of 4, etc.)

...esp if everyone shares in the cost.
_____________________________________________

I agree. Quite the bargain at $6100. A house like that in the Northeast beaches would rent easily for at least 2X $10K, maybe more.
People who come to SoWal to vacation don't realize what a bargain they are getting at the rates I see. Hardwood floors, granite countertops, designer bedding all in beach houses.
People tend to forget too that owners expensive in taxes, insurance, and gas ans electric costs have risen dramatically. The owner may have tried to keep his rate as low as possible, but realized he could get market rate and beach front renters will pay it. That area has a great beach, views and quaint shops.
he also may have had some issues with renters at the lower rate. I found when I raised my rates, I got a different cleintele.

I know a few really nice houses in Grayton that rent from $2400- 3400 that sleep 16, with tons of room to spare. I've stayed in them! Personally, I can't imagine spending $10,000 to live in a small highrise for the week. So yes, bchlvr, I think it is very excessive. I guess it depends on what people like though, and if they like the view that is obstructed by nothing and being one of the biggest houses on the beach, then I guess they would find it a bargain. Maybe when people are planning weddings and such, this does not seem so expensive. I wouldn't know - been married too long. Now we look for clean, comfy, loved and lived in, and a good "beach" karma. This does not mean everything brand new and shiny and perfect. :roll: There are quite a few houses in Grayton that meet our requirements.;-)

...and just think about the entertainment value of watching everyone get stuck in the sand, from the comfort of your front porch with nice cold beverage in hand.

Hmm, with 24 people stuffed inside the house, I think there'd be greater entertainment value inside the house than out. ;-)

And it doesn't even have a pool!!

Our Conch Out sleeps 24, has a pool and panoramic views of the Gulf from almost every room, is right on the main Grayton beach access, and has all kinds of extras. It rents for $5,600 per week during the high season weeks. Our rental manager says that the houses that have kicked their rents up astronomically have had problems renting and have had confirmed renters trying to change to other homes. Consequently, they now want to lower their price and have the rental company go back to entice potential renters. I think $10K per week for that house is far too expensive. Being that close to The Red Bar would not be a plus, in my book, not to mention being on that bad curve. The owners have the house for sale now and they may have upped the rental rate to reflect a higher potential revenue than is really possible.

Yes, owners have experienced increases in wind insurance, property taxes, and utilities rates. I would say that our annual costs have increased by some $7.5K attributable to those factors, as of this year. We've also had increases in costs for housekeeping and other services. I think renters have come to expect incremental increases in rents. But when a house basically doubles their rent, they had better have a better reason for it than granite countertops and HBO. It is unreasonable for new owners to expect that they will recover all their debt service through rentals with prices and interest rates where they are today.

Keep jacking that rent up, fellow owners, because all your renters are standing in line to rent our house as an alternative. Two weeks ago, we had three deposit checks for the same week in 2007, and made the decision to allow the repeat renter to have the house. The others chose other weeks. Never had a better year and already getting fully booked for summer 2007.

Our Conch Out sleeps 24, has a pool and panoramic views of the Gulf from almost every room, is right on the main Grayton beach access, and has all kinds of extras. It rents for $5,600 per week during the high season weeks. Our rental manager says that the houses that have kicked their rents up astronomically have had problems renting and have had confirmed renters trying to change to other homes. Consequently, they now want to lower their price and have the rental company go back to entice potential renters. I think $10K per week for that house is far too expensive. Being that close to The Red Bar would not be a plus, in my book, not to mention being on that bad curve. The owners have the house for sale now and they may have upped the rental rate to reflect a higher potential revenue than is really possible.

Yes, owners have experienced increases in wind insurance, property taxes, and utilities rates. I would say that our annual costs have increased by some $7.5K attributable to those factors, as of this year. We've also had increases in costs for housekeeping and other services. I think renters have come to expect incremental increases in rents. But when a house basically doubles their rent, they had better have a better reason for it than granite countertops and HBO. It is unreasonable for new owners to expect that they will recover all their debt service through rentals with prices and interest rates where they are today.

Keep jacking that rent up, fellow owners, because all your renters are standing in line to rent our house as an alternative. Two weeks ago, we had three deposit checks for the same week in 2007, and made the decision to allow the repeat renter to have the house. The others chose other weeks. Never had a better year and already getting fully booked for summer 2007.

:clap_1: :clap_1: Well said Donna!! And good for you for picking the repeat renter!

We walk around town alot and always notice that there are a few "big" houses sitting empty. It's the 2-3 bedroom houses or well-priced larger houses like Donna's that seem to have renters every week.

While I agree that the house has nice amenities, a 64% increase in rental rates seems high. Although, watching people get stuck in the sand was fun!
I am not aware of any houses in the same area that rent for that amount.
People come to SoWal because of it's quaint old town atmosphere not
to get a bargain. I am all for the owner's getting a fair rate it just seems
that they might be pricing their home a bit too high--Pride of ownership and all. As far as getting a different clientele--we are the clientele that any owner would appreciate. Families just looking for a nice place to stay
while vacationing--minding our own business--not trashing houses. We love
the Grayton area and love Hawks Nest. We were all excited about staying there
again until we called to re-book and found out the new rate. At $10,000
for a week- we just can't justify staying there again.

While I agree that the house has nice amenities, a 64% increase in rental rates seems high. Although, watching people get stuck in the sand was fun!
I am not aware of any houses in the same area that rent for that amount.
People come to SoWal because of it's quaint old town atmosphere not
to get a bargain. I am all for the owner's getting a fair rate it just seems
that they might be pricing their home a bit too high--Pride of ownership and all. As far as getting a different clientele--we are the clientele that any owner would appreciate. Families just looking for a nice place to stay
while vacationing--minding our own business--not trashing houses. We love
the Grayton area and love Hawks Nest. We were all excited about staying there
again until we called to re-book and found out the new rate. At $10,000
for a week- we just can't justify staying there again.

Try Donna's house then. It's Conch Out. I've been in it and can vouch for it--it really is a lovely house and it has a pool, too. You'd enjoy it!

Heck, we already have a place up here and I want to book Conch Out for a week next summer!!

I will attest (and I'm sure SHELLY will agree ) that the market rates for rentals and what owners are currently paying due to higher mortgages, property taxes and insurance have absolutely nothing to do with each other. When there are so many houses to choose from, you can increase your rents only by so much. Those of us who don't have "destination" type homes are very much affected by what else is out there. Renters do not care how much wind coverage costs. The good news is I think we got it right pricewise this year and we learned a lot. We had great people in our home and arrived this week to a lot of nice notes in the guestbook. Keeping renters happy and getting them to come back is definitely an art. Way to go Donna and others on this board whose words of wisdom I have used this year!

Thanks, everyone for your kind words. We really value our renters and some of them have actually stayed in Conch Out longer than we have! But we love it that so many families (and even the Atlanta Ski Club) think of the house as their own beach house at Grayton. Shucks, it makes me sad that the house sits empty as many weeks as it does. The way I see it, if you lose one or two rental weeks because the rent is too high, you've undermined yourself. The name of the game is overall revenue. I love it that our shoulder seasons are filling in with visitors who appreciate those special qualities. We have even considered offering a lower rent for the house during the off-season, for smaller groups. For example, Conch Out would make a wonderful spacious townhouse for two couples or even a honeymoon couple...great views and location and their own private pool. I absolutely adore being there all alone, just floating down the stairway to coffee on the deck with the birds and a view of the Gulf. Like having one's own little hotel.

Another thing that works for us is offering the house to our housekeeper and her family during one of the off-season weeks or long weekends (when they don't have as much work), just with the understanding that they will clean before leaving. Costs us nothing and is a great incentive for your housekeeper to think of you as a priority. These folks work so hard and few of them can afford vacations at SoWal unless it happens this way. We have a new housekeeper who is just wonderful. Even the guests comment that they've never rented a cleaner house. I wanna keep that wo-man!

I agree Donna that the homes that have raised their rates dramatically will have problems renting. I did raise my rate this year, but it was no where near what this house has increased. I just brought it up to market.

We had the same problem years ago where we rent in the Northeast. Houses kept getting sold and the new rates were raised dramatically, but due to shortage of rentals, people paid the prices. Owners can not expect to recoup their expenses on any investment property, and I agree this was a large increase and I didn't realize right away this house was being sold. That's probably why the large increase, although it may not rent at that price.
I guess time will tell.

Funny, I almost bought the lot next door to this house, but was concerned about being so close to the Red Bar and on that turn too.

I agree Donna that the homes that have raised their rates dramatically will have problems renting. I did raise my rate this year, but it was no where near what this house has increased. I just brought it up to market.

We had the same problem years ago where we rent in the Northeast. Houses kept getting sold and the new rates were raised dramatically, but due to shortage of rentals, people paid the prices. Owners can not expect to recoup their expenses on any investment property, and I agree this was a large increase and I didn't realize right away this house was being sold. That's probably why the large increase, although it may not rent at that price.
I guess time will tell.

Funny, I almost bought the lot next door to this house, but was concerned about being so close to the Red Bar and on that turn too.

Mango,

Sorry, I disagree.

Yes - owners can expect to cover their expenses. If you select the right house, right location, right amenities and manage it yourself; the house indeed will cash flow positive. There are good deals on the market right now that will cover their own costs. Think big (8-10 bedrooms), think private pool, think 1st tier gulf view, and think not trendy. The numbers will work.

RBP

Mango,

Sorry, I disagree.

Yes - owners can expect to cover their expenses. If you select the right house, right location, right amenities and manage it yourself; the house indeed will cash flow positive. There are good deals on the market right now that will cover their own costs. Think big (8-10 bedrooms), think private pool, think 1st tier gulf view, and think not trendy. The numbers will work.

RBP

I personally cover most all my debt service on my properties, and with the depreciation tax deductions, the fact they have appreciated since purchase even with the dip in market, a low fixed rate, I can afford to keep my price competitive. But at the height of the frenzy, I personally do not feel those people can cover their debt service, and certainly not positive cash flow and even with the dip in market prices, I do not feel the numbers will work positive cash flow. Down at the gulf people forget that things needs replacing much more often, windows, grills, plumbing from sand, the list goes on, painting needs refreshing, new pillows, comforters, cookware, the list goes on. Not to mention managing yourself creates a second job, of which at times, I have to delegate because I need to worl at my bread and butter business.

I do manage myself and my houses are not trendy, but clean and comfortable, have gulf views, and convenient to amenities. We also have done all our own work, painting etc., since the costs of hiring someone is more than I am willing to pay.

The above reasons are why I did not sell them at the height of the market and run for the hills. I have been in the real estate finance business since I was 20 years old and saw what happened in the early nineties when the market collapsed then.
I bought them as 1)long term investments (as all markets are cyclical) and for the value they have brought to me and my family. Our only wish is that we lived closer to use them more often, which eventually will change.

Good thoughts......

Check out the mls. There are some 8 bedrooms houses priced right with yearly revenues exceeding $100,000.

I agree with you, Rather B. Paddlin. I purchased most of my rental properties back when the prices were much lower than they are now (thought they were high then !) and most do pretty well with their cash flow...some better than others. But if you have a gulf view property that only had an increase of "around $7,500" in expenses, then you need to count your blessings....or maybe you should re-calculate your expenses. Property taxes and insurance costs ALONE should have been more than that, not to mention interest rates, etc.

"The way I see it, if you lose one or two rental weeks because the rent is too high, you've undermined yourself. The name of the game is overall revenue. "

Perhaps this is your business philosophy, but not mine. I don't rent my properties just to make an extra buck. The cost of renters (electricity, wear and tear, etc) can cost more than the PROFIT. I would rather rent my property at a higher rate in the peak season (when you know its going to be booked no matter what) and be able to lower the price more in the off seasons. Renting houses at the right price is similar to selling a house for the right price.... If your house is getting so much interest and bookings so early, perhaps you are under priced....just like the example of if you sell your house in 2 weeks, perhaps you didn't ask enough for it!

I agree that the property you (Kathy) mentioned did have too large of a price increase...but people will pay a premium for GULF FRONT because there aren't that many of them available. I personally think you might be too low on your price of $5600 if it can sleep 24 people, has a pool and gulf view. BUT, there are other features people do look for like....age of the house, high ceilings, granite countertops, size of the rooms, etc.

I wouldn't crack on someone else's "marketing strategy" or gloat on my own....I just think there are different streaks for different freaks...I mean different strokes for different folks....well you get the idea. Gotta go answer that rental call.....

Sincerely,
Dr. Have Moore Money
Dean of Harvard Business School

I agree with you, Rather B. Paddlin. I purchased most of my rental properties back when the prices were much lower than they are now (thought they were high then !) and most do pretty well with their cash flow...some better than others. But if you have a gulf view property that only had an increase of "around $7,500" in expenses, then you need to count your blessings....or maybe you should re-calculate your expenses. Property taxes and insurance costs ALONE should have been more than that, not to mention interest rates, etc.

Perhaps this is your business philosophy, but not mine. I don't rent my properties just to make an extra buck. The cost of renters (electricity, wear and tear, etc) can cost more than the PROFIT. I would rather rent my property at a higher rate in the peak season (when you know its going to be booked no matter what) and be able to lower the price more in the off seasons. Renting houses at the right price is similar to selling a house for the right price.... If your house is getting so much interest and bookings so early, perhaps you are under priced....just like the example of if you sell your house in 2 weeks, perhaps you didn't ask enough for it!

I agree that the property you (Kathy) mentioned did have too large of a price increase...but people will pay a premium for GULF FRONT because there aren't that many of them available. I personally think you might be too low on your price of $5600 if it can sleep 24 people, has a pool and gulf view. BUT, there are other features people do look for like....age of the house, high ceilings, granite countertops, size of the rooms, etc.

I wouldn't crack on someone else's "marketing strategy" or gloat on my own....I just think there are different streaks for different freaks...I mean different strokes for different folks....well you get the idea. Gotta go answer that rental call.....

Sincerely,
Dr. Have Moore Money
Dean of Harvard Business School

Excellent post Rocco! :clap_1: :clap_1:

Hey Rocco,

Not my quote.

"The way I see it, if you lose one or two rental weeks because the rent is too high, you've undermined yourself. The name of the game is overall revenue. "

I believe you could attribute that one to Donna.


PS: The boys said thanks for the day of tubing and waterskiing. rbp

Mango,

Sorry, I disagree.

Yes - owners can expect to cover their expenses. If you select the right house, right location, right amenities and manage it yourself; the house indeed will cash flow positive. There are good deals on the market right now that will cover their own costs. Think big (8-10 bedrooms), think private pool, think 1st tier gulf view, and think not trendy. The numbers will work.

RBP

The only way an investment SoWal property purchased now at these prices (and considering increased taxes, insurance, maintenance) can be cashflow positive is if the purchaser puts down a SUBSTANTIAL down payment. Lots of these homeowners are sitting on 100%+ mortgages and were expecting a quick flip (once long-term rates kick in) and are now trying to make the monthly nut by jacking up rental costs. They'll quickly find that this strategy will backfire.