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Katelyn Atcavage Robideaux
  • Realtor
  • Sarasota, FL
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talk to me about vacation rentals - condo style

Katelyn Atcavage Robideaux
  • Realtor
  • Sarasota, FL
Posted Nov 3 2022, 15:10

Hey BP fam. We are looking into beachfront (with beach access) condos for our next investment move.... ideally one that needs some love and is a value add. I've heard such mixed reviews from clients and fellow investors on their success with renting out condos. I found a few areas that allow weekly rentals, so, my plan would be to set it up as that and go from there.

1. Do you rent out condos/ have you in the past and how did it go? Successful? Best/Worst of it?

2. How did you know which HOA communities were open to helping with management of the rental? Simply calling? I know they do not put this on blast so my assumption is that is the only way. I have heard that they do help though and take part a %.

3. Any other insight on condo investments is welcome. 

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Bruce Woodruff
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  • West Valley Phoenix
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Bruce Woodruff
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Replied Nov 3 2022, 15:18

You will hear back generally negative things about condos, or mainly about HOAs. I would not ever buy anything governed by an HOA. Note my choice of the word 'governed' :-)

I have never done a Condo STR and never will. I am actually currently looking for properties to buy and came across one pushed by a Realtor who is listing it as a perfect STR. Great location, great price, amenities, etc. and it is STR approved by the HOA.

But so what? I used to be on an HOA Board and saw how quickly everything can change. A new BOD member gets on and has a bad experience with STRs....and boom, there you go, no more STRs...

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Michael Baum
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Michael Baum
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Replied Nov 3 2022, 16:23

@Bruce Woodruff is right on the money @Katelyn Atcavage Robideaux.

Of course it is going to depend on the condo. There are places that are all STRs and that might be a way to move forward.

Whatever you do, check who owns what units. How many are owned by one family/company. Voting for things like special assessments can be a real problem. How is the place maintained? What kind of amenities does it have?

I would much prefer a SFH in the same location.

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Katelyn Atcavage Robideaux
  • Realtor
  • Sarasota, FL
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Katelyn Atcavage Robideaux
  • Realtor
  • Sarasota, FL
Replied Nov 3 2022, 16:32

Thank you @Bruce Woodruff and @Michael Baum !! I appreciate the feedback! Good points.

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Garrett Kroll
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  • Victor, ID
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Garrett Kroll
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  • Victor, ID
Replied Nov 3 2022, 16:46

We have a condo, it's part of an active HOA and we pay $350/mo. That would scare most STR investors away right there.

But the amenities are top notch, it’s in a resort destination, and there haven’t been any maintenance headaches.

And it absolutely crushes it. I need more of ‘em. 

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Bruce Woodruff
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Bruce Woodruff
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Replied Nov 3 2022, 17:47
Quote from @Garrett Kroll:

We have a condo, it's part of an active HOA and we pay $350/mo. That would scare most STR investors away right there.

But the amenities are top notch, it’s in a resort destination, and there haven’t been any maintenance headaches.

And it absolutely crushes it. I need more of ‘em. 


 Well that kind of Condo is a little different...

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John Underwood
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John Underwood
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Replied Nov 3 2022, 18:04

I also would steer clear of Condos and only buy a STR.

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Cliff H.
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  • Nashua, NH
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Cliff H.
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  • Nashua, NH
Replied Nov 3 2022, 18:29

To be honest, small towns can be just as bad, if not worse, than a condo/HOA. In either case, your best defense is remaining engaged around your community and acting as a good neighbor that's addressing the predictable complaints like noise and occupancy before they become an issue. Fortunately, there's tons of tools for that.


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Michael Weigum
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Michael Weigum
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  • Surfside Beach, SC
Replied Nov 3 2022, 20:01

1. I personally own 2 beachfront condos and have done STR with them for the last 2 years. They have performed very well. HOA fees are high, but they include everything(cable, internet, electric, etc. It's the only bill I pay. I like that simplicity.

2. Best way is to ask an agent like me who specializes in the market you are looking at and who owns STR's as well.

3. Invest in an area that has way more people traveling to it than housing and is STR friendly (Myrtle Beach)!

Good Luck!

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Lyndsay Zwirlein
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Lyndsay Zwirlein
  • Lender
Replied Nov 4 2022, 05:28
Quote from @Katelyn Atcavage Robideaux:

Hey BP fam. We are looking into beachfront (with beach access) condos for our next investment move.... ideally one that needs some love and is a value add. I've heard such mixed reviews from clients and fellow investors on their success with renting out condos. I found a few areas that allow weekly rentals, so, my plan would be to set it up as that and go from there.

1. Do you rent out condos/ have you in the past and how did it go? Successful? Best/Worst of it?

2. How did you know which HOA communities were open to helping with management of the rental? Simply calling? I know they do not put this on blast so my assumption is that is the only way. I have heard that they do help though and take part a %.

3. Any other insight on condo investments is welcome. 


Hey Katelyn! We had a beachfront condo in Gulf Shores that we used as an STR. We also have 3 SFH homes as STRs. I just sold the condo to 1031 into one of the homes. In my opinion, there are pros/cons to the condos and probably depends a lot on where it's located. Positives -- it's easier to manage and had great occupancy because it was beachfront. Negatives -- the HOA was so high that it reduced profit margin by ~10%. The thing that made me most uncomfortable was risk of assessment (my friend just had one for $77k!!!!!), HOA can increase fee at any time, HOA can change rules at any time, etc. Also if you are in FL (we own there, as well), I am anticipating insurance to go up a ton in the coming years. This year alone, 3 large insurers went out of business making insurance more expensive due to less supply. Will likely get worse with hurricane Ian.

Hope this helps!! Good luck! 

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Candace Pfab
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Candace Pfab
  • Realtor
  • Orange Beach AL
Replied Nov 4 2022, 08:06

Condos provide a great entry point for new STR investors in our area. They are much easier to manage from a distance and easier to establish a budget. Many new investors can't or don't want to start out at a $650K price point which is what you typically need in the Gulf Shores area for a decent SFH close to the beach that will rent well. While there is risk of a special assessment by a condo association, there are ways to mitigate that risk with your due diligence. Single Family Homes can have unexpected large expenses too for repairs or a huge increase in insurance which we have seen a lot of in recent years. With a condo, maintenance & insurance expenses are split amongst the units. Yes, you have less control, but if you stay informed, there should not be a lot of surprises. We have owned 4 beach condo STRs since 2009 & never had any regrets other than I wish I could have bought more in 2009 ;) You just have to determine what works best for your scenario. Also keep in mind that your first STR investment doesn't have to be your forever investment. Buy wisely & then you can trade up as you go along. Hope this is helpful!

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Lucie Tighe
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Lucie Tighe
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Replied Nov 4 2022, 09:08

I think it greatly varies by location/neighborhood. In general HOA can cause a lot of headaches. I would do my due diligence and consider all pros and cons; location, investment, revenue potential, HOA fees, amenities, who will be managing it, what level of maintenance you want to deal with.. what make sense to you/what is important to you shall essentially be the foundation of your decision.

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Cole Schlack
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Cole Schlack
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  • Realtor
  • Hawaii, HI
Replied Nov 4 2022, 11:00
Quote from @Katelyn Atcavage Robideaux:

Hey BP fam. We are looking into beachfront (with beach access) condos for our next investment move.... ideally one that needs some love and is a value add. I've heard such mixed reviews from clients and fellow investors on their success with renting out condos. I found a few areas that allow weekly rentals, so, my plan would be to set it up as that and go from there.

1. Do you rent out condos/ have you in the past and how did it go? Successful? Best/Worst of it?

2. How did you know which HOA communities were open to helping with management of the rental? Simply calling? I know they do not put this on blast so my assumption is that is the only way. I have heard that they do help though and take part a %.

3. Any other insight on condo investments is welcome. 

Katelyn
I personally have grown to love condos for Vacation rentals but its in a very narrow context.  I cant speak for Florida but  In Hawaii we have condo developments in the resorts and they are setup from the beginning as Short term rentals so the HOA actually help make things better in general not work to outlaw them.  We see what some would call high HOA fees of $1,000-$1,500 per month being average but I dont think people with Single Family homes realize that is covering Building repair, Landscaping, Pool,Building Insurance Gates and management of the complex.  In a Single Family home in Hawaii you are easily going to spend $12000 a year on basic Maintenance and Landscaping and if you add a pool atleast $5k more.  In Hawaii a $1m condo rents for more than a $1m SF Home as people want to be walking distance to the beach and you cant get a home that close.  Final plus from my 20 years in owning STVRs, condos are nicer because when you visit them you have no outside projects to work on you can just relax and enjoy . 
 
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