Updated about 5 years ago on . Most recent reply
Looking for an NC Coast Beach House Rental
Hey all, I've been renting a few SFH in the Raleigh-Durham-Cary area for about 5 years now and am hoping to find a beach house rental on the NC coast as my next project. I've lived here all my life so I am familiar with the coast, but I'm having a hard time determining how much beach houses net in rent for short term rentals.
1. My main priority is ROI. We love the beach, so as long as it cash flows, we're happy anywhere. I'm guessing my family would use the property for personal use maybe a week or 2 per year (not in high season), so I'm hoping for this to be an investment, not an entertainment expense.
2. How do I most accurately estimate rents in each location? Should I just reach out to realtors who specialize in STR sales? Does anybody have any contacts in any beach town in NC?
Thanks!
Most Popular Reply
As always ROI will be hugely specific property dependent on amenities and proximity to the beach. I'm familiar with northern OBX, Kitty Hawk and Nags Head. A rough rule is that a good rental will gross 10%+ of it's purchase price or $10k per bedroom, better if you are oceanfront. The NC coast challenge is that it's basically only a Memorial Day to Labor day season. Realtors will gladly give you projections by property but these will be rosy. The annual maintenance estimates will be too low as salt + wind = brutal. Don't skimp on insurance. In 15 years I've had two hurricane claims on OBX versus only one in 30 years on the Florida panhandle.
The big oceanfront houses will give you the largest gross so if you have a big piggy bank, buy one of those. If I were buying based on 15 yr experience there and my average piggy bank, I would look for a 5 bedroom not more than 10 years old with pool and hot tub. $1M+ plus on the beach, $650K+ first tier. The 5th bedroom allows two siblings plus kids and the grandparents to have a pleasant vacation. More than 5 bedrooms will require doubling up the kitchen and bigger game room space. I see listings for 8+ bedrooms beachfront grossing over $200K. I've only had 3-4 BR first tier properties.
If you are strictly after best ROI, OBX may not be the best choice. The lower beaches around Wilmington need a look. Big negative for Dare County is that they closed the county to non-county residents for several months due to COVID-19. Other coastal counties did not do this. For OBX contacts, Dan Hardy, property manager, at Joe Lamb Jr realty is top notch and no BS. Remax Surfside Realty has an awesome web site for researching properties.