I am brand new here. I have been interested in buying investment properties for ten years but just now getting into a position that makes it possible. I have always planned to do it small and safe- 3 bedroom duplex in a my local area. That being said my husband dreams of having a beach home and really detests where we live. I recently discover Myrtle Beach and it’s wonderful pricing. I spoke to a realtor who stated 1 bed 1 bath beachfront rent the best with the best return, about 6%. These are condotel and seem to be the main options. Can anyone with brutal honesty tell me if this good/bad decision. Anyone have experience? Anyone buy multiple and have a retirement plan based on it?
I would ask him to identify 6% return / show you the numbers. I own 2 and I'm happy with them in that they are close to break even, (slightly under). The personal use combined with the rental income makes them worth it to us. I'm suspect of a 6% return however. Also you need to be careful where. I rented for 5-6 years before pulling the trigger just to make sure I knew what I was getting. Double / Triple check the #'s and HOA fees make sure your realtor is in the know regarding any assessments etc. I couldn't be happier with my decision just about a year ago for both, however I'm not getting 6%. If you self manage / AirBNB I see that that and maybe greater as a reality but I don't have time for that now, possibly somewhere down the line as a semi-retirement activity. Do you have specific resorts your realtor suggested?
@Anna Domzalski This thread was better suited for the STR Vacation Rental forum. Your subject wording is blowing my brain up a bit.
You can’t finance a condo on the beach conventional so dig deeper in to that side of things.
Tell your husband you need to start buying the duplexes and before you know it you can go on vacation anywhere anytime. I’m 37 and retired.
Think of it this way.... staying in tour condo on the beach is not going to cost you a penny less than renting out your condo on the beach to someone else and staying in the one next door. Buying one for partial use is not a good idea if the goal is to make money. If the goal is fun, then for me personally I’d rather have fun in a different city or country every time.
Also 6% of what? 6% Coc financed? If so you’ll never make it. My vacation rentals make 100% cash on cash annual with a 15% down payment. Let’s not forget you’re going to have to replace furniture, appliances and probably remodel. This thing will make you go broke.
Congrats on making your first step by posting a thread! I would suggest reading more books and listening to the podcast and asking more questions!
Do not give up. Make a goal to buy something that cash flows this year!
If you do get in to the vacation rental business you must self manage or you will be lucky to break even like Chris. It's very easy. I manage 5 vacation rentals remotely it takes about 5 minutes per day on my phone.
I agree with a lot of what @Lucas Carl has said.
We personally only buy our vacation rentals in areas that have year-round travel. We want to make sure there is always something going to keep occupancy rates high. What's awesome is just by following this model, when we go to those locations for travel, we can't even stay in our own place because it's usually booked!
It's such a great way to scale. It definitely takes some times on the front end--getting the right cleaner, loading up on supplies and having a steady supply of them (you will go through lots of towels), etc. But personally, we have fell in love with the STR route and hope to keep scaling up.
Thank you all! What is STR and how do I learn more about it?