@Anand S. - Thanks for the data. I look forward to reviewing it today!
@Aarti C. - You can definitely cash flow in the area. I have plenty of clients who are like Brandon and enjoy a second home for cheap or basically free, but I have plenty of others that have cash flowing investments in the area. One of my properties that we bought for around $565K has grossed around $73K (netted around $20K) -- just as an example. :) Best of luck!
Originally posted by @Aarti C. :
Great post. My husband and I are looking to enter the Destin STR market. Any updates on how 2019 went/projection for 2020? I know 2020 will be an anomaly for everyone.
Also do you have any tips regarding the Destin area (places to avoid, etc).
Hi! 2019 wasn’t quite as good. We grossed around $43,000 (versus $50,000 in 2018). Not sure exactly why. The rental association increased the rates a little bit to try and “filter out” the clientele a little bit. We also had a few last-minute cancellations, which was an anomaly. One of those were snowbirds who usually rent the entire winter. But we basically reverted back to the mean.
2020 is probably going to suck. We refunded all rentals in April. Hopefully we don’t have to for May. We also have a large special assessment this year. And if things get worse, I wouldn’t be surprised to see another special assessment to cover overhead or operation expenses. We will see.
As far as tips, we just have this one property. It’s hard to say where to focus on or avoid. Some of the cheaper properties across the street from the beach rent like crazy. But the rates are a little lower, and so is the clientele (not sure about the “PC” way to phrase that). Like I’ve said over the years in this thread, this is more of a savings account and long-term play for us. With the added benefit of having a free place to stay a few weeks a year. We LOVE bringing the kids there!
If we managed ourselves, we’d cash flow maybe $12,000/year. We paid $380,000 for it, so that’s isn’t very good if you’re looking for an immediate cash flow investment. But we did refinance last fall and it appraised for $487,000. We’ve owned for not suite 5 years, so that’s not bad. Of course it’s only worth what someone will pay for it.
Just be wary of what RE agents tell you down there. They all “have clients” who are cash flowing “very well.” The ones on this forum I’d guess are a little more trustworthy, since everyone here is a little more savvy than the average shopper. Unfortunately ours was awful.
Hmm. Other tips. Just know that salt water puts real wear and tear on things. You’ll have special assessments every two or three years for building repairs and major maintenance. And it’s a vacation place. You see the current impacts of financial crises—vacations are one of the first expenses people cut (whether forced or not).
I’ll post more if I think of any.
@Brandon Richardson - Thanks for the update! It's always nice to see how others are doing in the market. Best of luck in this crazy 2020!
I believe the red tide affected you in 2019. We were affected by hurricane Dorian. Impacted September and October.