Ocean City, MD - STR investment
Member since 2023 · 22 posts · 12 votes
Hello - I'm looking to start my short term rental business and am considering buying a property in Ocean City MD. It's a 2 bed 2 bath condo, beach front in midtown. In doing some 3rd Party research through sites like airdna, I am seeing that similar condos have GRI of around 60k which would put my CoC at around 25%. The issue is the building has a special assessment on it where 25k is paid this year (by the seller) and another 25k will need to be paid in the near future tbd (by the buyer). This will put more value on the condo im sure as I am getting it under market value. My question are 1. Is this kind of return obtainable with str in Ocean city md and 2. Would love to hear some expert opinions on this investment. Thanks in advanced
Jeramey,
I would need to know more about the condo itself, which building / street location etc. Is it Ocean side or Bayside etc.
I have been an operator in Ocean City MD for awhile and have units ranging from 2 bed 1 bath to 6 bed 3 bath. 60k GRI is achievable on some units, typically on the larger side, in the 3 bed 2 bath range. That GRI does include income for cleaning, taxes etc. though normally, which is really pass through expenses for the most part.
Happy to help more if you like, send me a message and we can connect on the details of the condo you are looking at. The special assessment seems high in general, so which building it is would help provide some insight into why and what you gain from it etc.
Jason
Hey Everyone - Figured i would keep everyone in the loop here with updates. I ended up purchasing the condo and just finished renovating it over the last week. Working to get it up and running for the STR platforms now and goal is to have it operational by next week. Wish me luck and will keep the group updated on progress by mid summer.
Condo performance update as we head into summer?
Happy to provide an update. Roughly 75% of my peak season is booked and I already exceeded my goal for the year in booking revenue (50k). Surprisingly, after starting in March (off season), I was still able to net a profit during this month without any prior reviews at the time.
Through my cleaners, pms (Lodgify) and 3rd party apps (schalge home lock, ring doorbell, google home, turno, jervis), 95% of the property management is automated and i spend less than 1hr per week on property related tasks.
All in all, very happy with the decision and appreciate all of the support/advice given in this chat.
Hi everyone - posting an update here for my fellow investors. Summer went extremely well. Had a 100% occupancy rate. Overall going to net somewhere between 80k - 85k through 12 months with an average occupancy btw 70 - 80%. While I am happy with this purchase overall, I am no longer focused on investing in ocean city due to transitioning away from condos. The construction from the assessment on the building I referenced in a previous post has been completed....... for only 75% of the building. The board is new voting on covering the additional 25% next year. This will cost me around 10k. While I have profited significantly more than expected this year, I purchased another property (SFH) in North Charleston where I am pacing to drive slightly more revenue and I have much more control of costs vs the condo. I would say this property served its purpose as a relatively easy to setup investment that helped me get experience in real estate investing.
thank you to everyone in the chat for your help here.
Great, I’m glad your year went so well! That’s a fantastic net.
Hopefully when all that work is done on the building, you won’t have to worry about that for a long time. I was reading about the new law in effect in OC in October regarding condos and mandatory reserve studies and reserve funds. Has that affected your building? I hear that law is causing a lot of pain for underfunded buildings.
Glad things went really well @Jeramey Rogers! Gratz!
Great, I’m glad your year went so well! That’s a fantastic net.
Hopefully when all that work is done on the building, you won’t have to worry about that for a long time. I was reading about the new law in effect in OC in October regarding condos and mandatory reserve studies and reserve funds. Has that affected your building? I hear that law is causing a lot of pain for underfunded buildings.
Glad things went really well @Jeramey Rogers! Gratz!
Much appreciated.
Hi everyone - posting an update here for my fellow investors. Summer went extremely well. Had a 100% occupancy rate. Overall going to net somewhere between 80k - 85k through 12 months with an average occupancy btw 70 - 80%. While I am happy with this purchase overall, I am no longer focused on investing in ocean city due to transitioning away from condos. The construction from the assessment on the building I referenced in a previous post has been completed....... for only 75% of the building. The board is new voting on covering the additional 25% next year. This will cost me around 10k. While I have profited significantly more than expected this year, I purchased another property (SFH) in North Charleston where I am pacing to drive slightly more revenue and I have much more control of costs vs the condo. I would say this property served its purpose as a relatively easy to setup investment that helped me get experience in real estate investing.
thank you to everyone in the chat for your help here.
Hi everyone - posting an update here for my fellow investors. Summer went extremely well. Had a 100% occupancy rate. Overall going to net somewhere between 80k - 85k through 12 months with an average occupancy btw 70 - 80%. While I am happy with this purchase overall, I am no longer focused on investing in ocean city due to transitioning away from condos. The construction from the assessment on the building I referenced in a previous post has been completed....... for only 75% of the building. The board is new voting on covering the additional 25% next year. This will cost me around 10k. While I have profited significantly more than expected this year, I purchased another property (SFH) in North Charleston where I am pacing to drive slightly more revenue and I have much more control of costs vs the condo. I would say this property served its purpose as a relatively easy to setup investment that helped me get experience in real estate investing.
thank you to everyone in the chat for your help here.
Quick clarification here after reviewing my post. 80k is the gross revenue not net. Net is a little over 40k.
Hi everyone - posting an update here for my fellow investors. Summer went extremely well. Had a 100% occupancy rate. Overall going to net somewhere between 80k - 85k through 12 months with an average occupancy btw 70 - 80%. While I am happy with this purchase overall, I am no longer focused on investing in ocean city due to transitioning away from condos. The construction from the assessment on the building I referenced in a previous post has been completed....... for only 75% of the building. The board is new voting on covering the additional 25% next year. This will cost me around 10k. While I have profited significantly more than expected this year, I purchased another property (SFH) in North Charleston where I am pacing to drive slightly more revenue and I have much more control of costs vs the condo. I would say this property served its purpose as a relatively easy to setup investment that helped me get experience in real estate investing.
thank you to everyone in the chat for your help here.
That's awesome Jeramey! Great numbers for a 2 BR. Crazy how different the bayside vs the ocean front is. I sold my bayside mid town OCMD condo last June and am looking for another one. Mine was a 1 BR, 1 BA so for my next one looking for something bigger.
Hi everyone - posting an update here for my fellow investors. Summer went extremely well. Had a 100% occupancy rate. Overall going to net somewhere between 80k - 85k through 12 months with an average occupancy btw 70 - 80%. While I am happy with this purchase overall, I am no longer focused on investing in ocean city due to transitioning away from condos. The construction from the assessment on the building I referenced in a previous post has been completed....... for only 75% of the building. The board is new voting on covering the additional 25% next year. This will cost me around 10k. While I have profited significantly more than expected this year, I purchased another property (SFH) in North Charleston where I am pacing to drive slightly more revenue and I have much more control of costs vs the condo. I would say this property served its purpose as a relatively easy to setup investment that helped me get experience in real estate investing.
thank you to everyone in the chat for your help here.
Quick clarification here after reviewing my post. 80k is the gross revenue not net. Net is a little over 40k.
Those are great returns for OC! I wish I invested in that area years ago. I forsee this new law changing things up for condos as they will have a high churn rate due to low condo funds or buildings get bought up and demolished for new construction. I grew up going there many years as a kid and it would be nice to designate some blocks to bring back more SFH along beach side vs towers everywhere. Anytime it rains it just floods on the main drag and then you also deal with the 45-70 min it takes during peak season from the de/md line down to the boardwalk. Its a great area but the city just keeps the density numbers high.