Highland, MI · Member since 2017 · 1 post · 0 votes
Hi I want to invest in a short term rental property and wondering the best location for that property. Is it better to buy on the beach (Destin, SC, NC) golf location (Destin, Hilton Head) or Historic location (Savannah, GA, Wilmington, NC)?
Looking to spend under 400,000 and get a decent return on my investment but not sure where gets the most for my buck on the location.
Hi Diana,
Just wanted to chime in with my perspective since I am also hoping to get into vacation rentals.
Personally I think right now the vacation rental market is really high. In my area (Destin) it is near or above 2008 levels in many places. I think based on historical economic cycles we are due for an economic correction in the next 1-3 years. When that happens vacation rentals are usually among the first to get hit. My plan is to hold out and wait for this correction. I see that as the best way to pick up something that actually achieves a good return. Short term rentals have tons of hidden fees and expenses that eat into returns, so you really have to buy low to get a good return.
For example I have a friend who bought 6 vacation condos at once on nearby okaloosa island around 2009. I think he only paid $300k total. Today they are worth at least $200k a piece, and he cash flows nicely.
Just my two cents
Diana Wise This isn’t a definitive answer, but I’d call local property management companies (assuming you want to use one) and see what their fee structure is. Odds are it will vary by market and could range from 15% to 35% (in rare cases, more). Stripping 15% vs. 30% off of the top of gross rents makes a huge impact. You’ll also want to look at insurance rates. Don’t be surprised if you’re paying another $7K a year in Destin, Gulf Shores, etc. Anyway, others will likely have better answers than me!
Hi Diana,
Just wanted to chime in with my perspective since I am also hoping to get into vacation rentals.
Personally I think right now the vacation rental market is really high. In my area (Destin) it is near or above 2008 levels in many places. I think based on historical economic cycles we are due for an economic correction in the next 1-3 years. When that happens vacation rentals are usually among the first to get hit. My plan is to hold out and wait for this correction. I see that as the best way to pick up something that actually achieves a good return. Short term rentals have tons of hidden fees and expenses that eat into returns, so you really have to buy low to get a good return.
For example I have a friend who bought 6 vacation condos at once on nearby okaloosa island around 2009. I think he only paid $300k total. Today they are worth at least $200k a piece, and he cash flows nicely.
Just my two cents
I suggest you look here in the Orlando/Disney World area. Primarily because of Disney World, Universal Studios and SeaWorld, our tourism market is year-round. There are a lot of short term rental vacation homes here, so you will need to be careful to choose a vacation home optimized for rentals and one that is in a prime location.
Hi. I am in the Hilton Head area. Are you thinking of buying a condo? In HHI you would have more properties to choose from. The lowest price house on HHI is around 300k and would not be short term. I can send you some listings if you'd like to see