I'm looking to purchase a condo in Destin. I want to rent it out short term so it is available for my use as well. I don't know much about the market yet but the prices seem extremely cheap. Is this normal and where do other costs come into play as far as taxes, insurance, etc.? Any advice on the general market and why prices seem so low, would be great. Thanks in advance.
Prices of Investment properties here in Destin are near the bottom of the historical range, having recovered from the boom and bust of recent years. Low interest rates makes it a very good time to purchase. Having a condo here makes perfect sense if you really do enjoy the beach life style. There are some fine points that we need to discuss before you take the plunge but that is why you work with a professional active in the local market. Check out my web site for more information. your bucketlistbroker
I'm looking at purchasing in Destin as well for a good Vacation Rental property. My wife and I got married there a few years back and we have a special place in our hearts for Destin. It also seems like a great time to get in there.
@Aundrea Newbern I'm not in the Destin market, but I have vacation rentals in Florida. You'll definitely want to check into local laws and zoning regarding rentals. Florida has prohibited any new local regulations that ban vacation rentals, but they can still pass new laws regulating them and any existing prohibitions are grandfathered in. With it being a condo, you'll also want to read the condo regulations to see if there are prohibitions or other limitations. Of course, also check into HOA fees. Sometimes the price is very low but HOA fees are prohibitive. Insurance will be different than regular homeowner's insurance so you'll want to price that. You can check rental comps on VRBO and Airbnb as a starting point. I always assume 50% occupancy rate when running my analysis on VR deals (although in my market, I'm at 95% or better. I'm just cautious when analyzing deals.
We are interested in a Destin vacation rental investment property in Santa Rosa Beach area. We will be there in March. Any help, ideas etc would be great!
@Aundrea Newbern Definitely look into the HOA fees. It can range from 100/month - 700/month. Even if a condo is only 200k, if your fixed expenses include a 700/month HOA fee, and 500/month in taxes+insurance, that limits your income.
I'll second Arianne's comment about HOA fees, they can suck up a lot of your cash flow. Additionally, the special assessments that you can potential get hit with for docks, pools, parking lots, etc make HOAs an unpredictable factor.
Consider the style of rental as well. You are also at the whim of personality when looking for vacation rentals in large complexes. There is a lot of competition between complexes. Success is incumbent on a good management team, the marketing team and the willingness of your association to act. Its not just hiring a cleaning crew for turnover. Keeping the property facilities immaculate, marketing, hiring talent, and maintaining all the "extras" that will attract your guests like the pool, the bar, and the security staff mean that you're investing more in a business than a property. And underwriting a business with no participation is different than crunching numbers on a simple rental.
Lots of money to be had in vacation rentals, just make sure you're making an informed decision.
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