Beachfront Condos
hey gang..I am relatively new REI, but have been researching for almost a year now. I have spent lots of money and effort rebuilding credit, and now have ok credit (low 600's, much better than before) good income and zero debt. I am a licensed real estate agent working primarily in on-site sales.
My ex gf's parents had two condo units that they owned in New Smyrna Beach, Fl that they rented out mostly to seasonal patrons. They purchased them for around $174k each. Maybe 600 sq ft, but right on the ocean. They ultimately sold them at about $205K each, when they were paid for. They were fully furnished and managed by an onsite company. We used them all the time when we went to the beach, they were great. From what I recall, they had great cash flow, very nice and fully furnished. with great furniture.
While looking around, I realize $175 is a bit too much for me right now, but I see plenty of beach front condos for 40K or so at Daytona Beach. Most are 1BR efficiency units, 400 sq feet or so. These are actually right on the water. The low monthly note would seem to allow for plenty of vacancy periods and the location may allow for great cash flow during spring breaks and the like.
Would something like this be a good first investment for me? I live in Atlanta and would love to get started with something like this.
Any input is greatly appreciated.
i bought a foreclosure for 27k the maint was 200 a month and included everything except phone. I sold a couple of years later for a small profit because i could not use it and the management company were crooks
better top have someone u know rent it out for u
i am currently looking to buy again though and would be interested in looking with u
Mike
Beware of CAM (common charges). Often, the deck is stacked w/ these properties. The profits are too heavily buried in inflated management costs.
I assume you refferring to charges by the managemaent company? Is it possible to handle the rental efforts my self? With a property like this is it better to try and rent on a weekly basis, taking advantage of bike week, spring breaks and high volume vacation seasons, or try and rent it out as a low cost residence?
Thanks in advance.
I recently researched this same idea and here's some thoughts for you:
Location is King, and amenities are Queen when it comes to beachfront property. Units with very nice furnishings (TVs, VCRs, pools, restaurants, golf etc.) will rent faster and attract a higher caliber of renter.
When figuring your monthly cash flow, include principal, interest, taxes, and insurance, and don't forget the monthly maintenance fee charged for the common areas. Also, does this fee cover all of the utilities: electric, gas, water, phone, cable TV, sewer?
Then there's the matter of a management company. It won't be easy to manage the property from out of state, but it can be done. Expect a lot of calls just inquiring about, but not necessarily renting, the unit. You would also still have to contract with someone to clean the unit. There's also an issue of handling complaints, repairs, linen service, handing over the keys, and collecting the money.
Also, be sure to check local ordinances regarding short term rentals. I found one county in NW FL that charges a tax on rental income above a certain dollar amount (like 15% above $4500, if I recall correctly!)
$40K for beachfront property is REALLY cheap, even for a studio. Why is the price so low? Does the unit have a kitchen? Is it Supply/Demand? Condition/Age of property? Location? Amenities? All of this can affect the ability to rent the unit. Repeat customers and referrals are important for a successful beach rental.
As for renting weekly or long term, you could probably get more money renting weekly. For long term, the kitchen would probably need to be bigger than an efficiency.
What MJP said..... I agree w/ every last word.
Concerning CAM, i was refferring to "common charges" not unit mgmt fees. I was speaking specifically to eff. units (basically a hotel room). Although now that you mention it, unit mgmt is a huge issue if you intend to do weekly rentals. Who is going to make certain the keys are in order, change the sheets, take out the garbage, vacuum, etc., etc.
For what it's worth, I think so many of us are seeing a flattening market and are therefore looking to coatal Fla. for long term hold aqusition. Personally, I've decided to put my Fla. ambitions on hold until the next "down cycle".