Hello BP community, I've been researching condos to purchase in Panama City Beach Florida, they are in my price range and the beaches there are really beautiful, a place I can call my Vacation home, they are Airbnb friendly, but I'm unsure if buying a Condo as a STR would work, has anyone purchased in that area, if so how's it going, also in General is purchasing a condo a good strategy for cash flow as a STR, positives and negatives on that.... any small amount of advice would help for a beginner like myself, also how could I get a better idea of the Rental history on each property...... thanks!!!!
Hey @Lorraine Patterson
I would scout on AirBnB what nearby similar properties are renting for, see how they are marketing things, study your competition. I would then figure out what the average yearly occupancy rate is. Once you figure that out and the amount you can rent it for, you'll be able to accurately see what it'll cash flow on average each month.
As long as the HOA is okay with it, and your renters are not too rowdy constantly, it should be fine! Do you plan on self managing it or do you plan on getting a STR management company on it?
@Lorraine Patterson If you are looking for cash flow it is really going to come down to your management situation. Prices on condos are high right now. How much cash flow on an annual basis? If you are paying a full-service property manager, you can expect to pay them 25% of gross rental income. I created a spreadsheet to analyze deals like this and determined that the single family homes (used as vacation rentals) are often more profitable but they have their own risks.
If you are willing to be hands-on, using AIRBNB for the marketing/booking side....you could likely make it work. Another variable- how much do you plan on staying in the unit yourself? Also-what is your financing strategy?
Long story long...what is your main goal with this investment? What is your investment criteria?
@Jake Stuttgen Hi Jake, Thank for your advice, Self-Management.
@Melissa Jolley hi Melissa thanks for your response, I’m financing the loan, with 20% down, maybe once or twice a year I’ll use it, and I plan to self Manage, here is the link of one of the properties I have my eye on.
@Lorraine Patterson I have had so many interested in Laketown Wharf- I have nothing bad to say at this time. Your agent can pull the rental history and projections for similar units. A 'cost to own' as well. He can contact the current property manager or listing agent for that data and verify future bookings as well. These things will help you determine if it is the right move for you. *** Be careful with "rental projections"....the history is a better indicator.
@Melissa Jolley I will be calling my agent now thanks!!!!
Hi I live and invest in Panama City Beach - LTW is the best price for what you want to do, but remember its across the street from the beach. The property has a great amenities package and boasts I have sold several units there to out of town buyers and my customers have been pretty happy with their results, but they are using property managers and they have not leveraged their purchases. As an aside, Financing there will need to be done through local lenders that offer condo-tel products unless your home lender will hold a portfolio loan, as this property will not meet Fannie Mae guidelines.
Yolanda LTW offers financing directly from the owner of the remaining condos unsold. The owner is a bank. There is no need to go to local lenders unless the buyer wants to.
@Lorraine Patterson you might consider prices may be inflated after Hurricane Michael devastated that area last October. Inventory will likely improve steadily as properties are repaired and/or replaced, but will probably take a few years to return to pre hurricane levels.
Yes Peter, the bulk owner does offer financing but thru 3 local lenders that has signed on, each with variants in ARMs and 1 with a fixed product.
@John M. @Lorraine Patterson Hurricane Michael devastated Panama City, (further east than Panama CIty Beach) and caused some damage on the east end of the beach. Various condo complexes on the east end have sustained some damage but overall we have faired well. We have seen very low inventory in single family homes (attached and detached) which have caused LT rents to shoot up. Prices for undamaged homes has also increased. As far as condo inventory we have plenty in all price ranges, but your typical 2 bedroom condo will generally be over $250K, the exception will be older properties that need updating and LTW where the bulk owner is converting their Long-term and short-term rental properties to their available sales inventory.
Yolanda i purchased directly thru the bulk owner.
LTW has around 400 unsold condos. Right now many of the condos are being converted from long term rentals to sales (primarily lake views) and the remaining condos are being rented as short term rentals *(gulf views). Right now the best views of the gulf are usually higher floors or units which have minimal view blockage of the gulf.
I got an eye on purchasing at LTW too. I mostly own LTRs but feel that LTW would be a great place to dip my toe into the STR space.
@Lorraine Patterson make sure you have spoken with a local lender. Most condo complexes that rent well are considered “condotels” and larger banks will not finance these properties as they cannot package as Fannie Mae/Freddie MAC loans. I own a condo down there and I can’t tell you how many times I hear other owners that tried to refinance with their bank and it almost always falls through. Same thing when they try to purchase an additional condo. Things changed after the housing bust.
@Doug B. Thanks for the advice I will definitely be doing more digging for info. before I make a purchase on one of the units I’m interested in...
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