STVR Beachfront Condo: Opinions/Analysis Wanted!
Hey there BP investors- would love to hear opinions and experience with beachfront condos in historically short term vacation rental areas.
The specific units I'm looking at are 1 BR/1 BA with a water view and pools
Can sleep anywhere from 2-6 with the addition of a pull out couch and a small bunk area for families
$220K (Unrenovated) - $250K (Renovated)
Similar units in the same building rented for $29K (this year) but "Closer to $36K in a stable year" (per management)
My guesstimated costs will be $1500-2000 monthly using a 10% down vacation home loan, I'm considering using this management company at 26%
The location is Tybee Island, Georgia. Historically plenty of tourism, STVR are the norm and aren't likely to be capped or deal with new legislation, obviously subject to the occasional hurricane. Looking here specifically for personal use as well- we're a short driving distance (close enough to do last minute trips, but not manage the flips) love the beach, love Savannah, usually travel a lot and due to covid & a new baby we're thinking an investment is a better use of that vacation budget.
Some of the questions/concerns that I'm currently dealing with (and please feel free to correct me on math..."I do art" lol)
- What's the appreciation like on properties like this? Can I expect a pretty decent return in a couple years if I renovate? (<$10k mostly kitchen focused)
- On that note: I started out looking at single family homes in the area, 2 BR/1 BA at $399K - the annual income seems to be about the same/a little bit more, but will I see a significantly better appreciation in a couple years ?
- Do any of y'all have specific guidelines or math you use when considering personal use? (aka the "happiness factor")
- As I understand it, a second home loan is possible at 10% down as long as I use the unit at least 14 days a year, I can claim the income, but I cannot use the income potential to qualify for the loan?
- I've seen a lot of info about emergency funds for LTR but how much do you usually keep on hand for STVR?
- Napkin math 'worst case scenario': $25K down, $2100/mo expenses, $20k gross - leaves me with an annual cost of $6k/year -- which IMO would be the cost of a year's worth of travel, and then starting year 2 I'd cash flow positively?
- Napkin math best cast scenario: $22K down, $1700/mo expenses, $27K gross - gives us a 30% COC return?
What do you think? Again...I'm a total newb and I can decorate these units better than I can do the math on investing in them- HA! :)
And if any of you have any personal experience with the area- please share!