I am considering investing in beach rental property. The minimal goal would be to break even on monthly expenses and have a place to retire to one day. If it can turn a profit even better. This is a very recent idea/opportunity and I am deciding whether it is worth my time to go further. Consider me an ignorant novice in real estate investment. There is nothing you can tell me I already know. Here are the details I know so far:
Asking price 295k
Mortgage would be around 1k a month plus taxes and insurance (have not gotten far enough to get those details)
Rentals for like properties average 2500 a week during the summer
I don't know what the snowbird rentals go for.
The property is ground floor and on the beach so it should be marketable to both summer and winter guests.
Current use would be personal for 3 weeks out of the year and rental the remaining weeks.
I don't know what additional information you might need to provide input. I was just hoping for general thoughts. Are these headaches to manage? Are they money pits and run away? I welcome any and all feedback.
I'm looking into the same thing. Following.
We have a short term rental on the coast of Alabama so perhaps I can help a little bit. We also use ours periodically throughout the year and rent it when we are not using it. Here are some things that come to mind, in no particular order:
- We choose not to stay in our condo during the high season because that's when the money is made. We also don't stay there Dec - Feb because that's snowbird season.
- Keep in mind you have an HOA to pay as well - that will impact your cash flow.
- Mother Nature is a beast. Hurricane Sally shut our complex down (and many others). We have not been able to rent our condo since mid September. Our re-open date is May 15, so that's 8 months of paying out of pocket. Insurance helped a little, but the majority of the cost was ours. In addition to lost rental revenue, we had to pay our HOA an assessment of several thousand dollars. Some complexes had to pay upwards of $10k in assessments.
- We use a property management company that manages our rentals. They charge 20% which is pretty typical for the area. We are just too busy at this point in our lives to do it ourselves.
I don't want to discourage you but those are just some things you may not have considered. We absolutely love it on the gulf coast and we are happy with our investment but sometimes we entertain the thought of selling it for something that would cash flow a little better.