Beachfront Condo vs Beach house a block away

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Beachfront Condo vs Beach house a block away

David New
Rental Property Investor · Atlanta, GA · Member since 2019 · 78 posts · 33 votes

How would a beachfront condo compare to a beach house that was a block or two away from the beach do in terms of rental revenue? This would be assuming similar specs (3b/3b) and purchase price.

Would appreciation be pretty close as well?

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Ryan MoyerBusiness Member
Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votes
5y

Put a pool in the house a block away and it will blow the condo away. 

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    5y

    IME - The closer to the water the better. I'd bet the waterfront one would get you far better nightly rates too....

    2Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    5y

    My 2 cents, appreciation, SFH all the way. Nightly rate, house I think would do better, but if you can provide some more data as to size and location, that would help.

    4Reply
  • Ryan MoyerBusiness Member
    Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votes
    5y

    Put a pool in the house a block away and it will blow the condo away. 

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  • David New
    OP
    Rental Property Investor · Atlanta, GA · Member since 2019 · 78 posts · 33 votes
    5y

    @Michael Baum thanks for the responses so far from everyone. I'm seeing a few condos by the beach that have great beachfront views. However, by the time you factor in the high HOA the monthly price is very similar to a house a block or two away from the beach. Of course you would lose the beachfront views with a house but would gain some privacy.

    With no previous experience in renting either of these property types at a beach destination, I wasn’t sure if one was more sought after than another. The condo would have amenities like a pool and hot tub that the house more than likely would not have.

    0Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    5y
    Originally posted by @Ryan Moyer:

    Put a pool in the house a block away and it will blow the condo away. 

    You might be right! I'd rather have a pool AND walk to the beach. Pools are $30k+ or so nowadays though, I wouldn't know about his ROI.....?

    0Reply
    • Joe SplitrockPro Member
      Moderator
      Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
      5y
      Originally posted by @Bruce Woodruff:
      Originally posted by @Ryan Moyer:

      Put a pool in the house a block away and it will blow the condo away. 

      You might be right! I'd rather have a pool AND walk to the beach. Pools are $30k+ or so nowadays though, I wouldn't know about his ROI.....?

      Where do you get a pool installed for $30K? I have several neighbors who have put them in and it was $60K to $100K+ in some cases for a big/deep one.

      0Reply
  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    5y
    Originally posted by @David New:

    How would a beachfront condo compare to a beach house that was a block or two away from the beach do in terms of rental revenue? This would be assuming similar specs (3b/3b) and purchase price.

    Would appreciation be pretty close as well?

     We just spent a week in a VRBO on the Isle of Palms in Charleston SC - condo on the beach. We chose the view, the proximity and the amenities over a huge house a block away.  For us the idea was to be surf side enjoying the ocean. A pool is okay, but we were there for the real thing. Yep, it cost a bit more to be on the water rather than a block in but we think the view is worth paying more for. Today we drove the streets on the island and there is a massive amount of houses away from the beach that are VRBO (signs in front advertising such) and they are large and well kept, but limited beach access and no view.

    We'd stay in the beach front again rather than move inland. But, as an investor you have to be able to find the right property to make it a VRBO and I doubt the beach front ones come available for sale very often. Better to make some profit with one inland than wait for a beach front property and waste the time, in my opinion.   

    4Reply
  • Tanner Morrill
    Property Manager · Nashville & Salt Lake City · Member since 2015 · 78 posts · 20 votes
    5y

    My real estate team leader put in a pool and a bunch of concrete and it cost him about $100k.

    1Reply
  • David New
    OP
    Rental Property Investor · Atlanta, GA · Member since 2019 · 78 posts · 33 votes
    5y

    @Tanner Morrill I’ve heard this is the new norm. Pool prices have skyrocketed.

    0Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    5y

    House over a condo!

    Even being a block or two from the beach.

    1Reply
  • Aaron Smith
    Durham, NC · Member since 2014 · 104 posts · 68 votes
    5y

    I put a pool in 3 years ago in our beach front house. Cost me about $50,000 for a large fiberglass pool with concrete. Well worth it though because I have been able to get about $15,000 more in rent per year from having the pool. By next year it will have already paid for itself and I get the pleasure of using the pool everytime we go to stay between April and November

    0Reply
  • John Burtle
    Real Estate Broker · IL · Member since 2016 · 284 posts · 178 votes
    5y

    Beachfront condo all day!

    When we go on vacations we never have a problem paying more for a beachfront condo due to convenience. Nothing beats walking out of the front or back door to the beach being right there.

    Everyone I talk to has said the same. They are always willing to pay a little more for the convenience of the beach being right on the property. Especially people with kids.

    It seems like most of the beachfront condos already have pools to. I don’t know if that’s the case with the one you’re looking at.

    2Reply
  • Jordan Ray
    Developer · Palm City, FL · Member since 2018 · 326 posts · 99 votes
    5y

    @David New 100% agree with @Ryan Moyer

    1Reply
  • Cheng Chu
    Member since 2021 · 24 posts · 6 votes
    5y

    @David New

    I guess it would also depend on how much public access the beach has. Many beaches are private and so can be limiting to folks not living beachside.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y
    My family is currently shopping to vacation this winter and we are shopping for beach front only. I can guarantee you that beach front nightly rates are far greater. There are people willing to stay a block away and even 15 miles away, but the nightly rate will decrease as you get farther from the ocean. Total revenue will be higher closer to the water, but with HOA expenses and higher purchase cost, it may pencil out better to be a block away. 

    Punch up the numbers and see what makes sense. I generally don't love condos due to the board and HOA, so I may consider a house for that reason. 
    0Reply
  • Ryan MoyerBusiness Member
    Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votes
    5y
    Originally posted by @Joe Splitrock:
    My family is currently shopping to vacation this winter and we are shopping for beach front only. I can guarantee you that beach front nightly rates are far greater. There are people willing to stay a block away and even 15 miles away, but the nightly rate will decrease as you get farther from the ocean. Total revenue will be higher closer to the water, but with HOA expenses and higher purchase cost, it may pencil out better to be a block away. 

    Punch up the numbers and see what makes sense. I generally don't love condos due to the board and HOA, so I may consider a house for that reason. 

    I'm not sure this is necessarily true.

    When comparing a condo to a condo or a house to a house then yes, proximity to the beach will directly affect rates.  But from what I'm looking at (have VRBO open for Destin right now) a house a block away with a pool is going for FAR more nightly than a beachfront condo.

    3br beachfront condo rates are $169-$350/nt looking right now.  4br is $230-$500.  I'm sure those rates were higher in the heart of summer but how much higher?

    We stayed in a 4br house a block from the beach with a nice pool a couple of weeks ago and paid $1425/nt and felt like we were getting a deal.  The place next door had a little nicer outdoor area and was renting for $2100/nt.

    I'd be interested in hearing what beachfront condo owners are pulling in post covid.  I remember owners pre-covid posting on here and being happy with $35k-$65k.  I'm sure that is a fair bit higher post covid but the 4br house we stayed at last week a block off the beach is for sale right now and they posted their rental data with $250k gross rents this year.  I doubt any 4br condo is pulling anywhere close to that, but I'd be interested to hear from the folks that own one.

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    • William P.
      Rental Property Investor · Naples Fl · Member since 2015 · 10 posts · 6 votes
      5y
      Originally posted by @Ryan Moyer:
      Originally posted by @Joe Splitrock:
      My family is currently shopping to vacation this winter and we are shopping for beach front only. I can guarantee you that beach front nightly rates are far greater. There are people willing to stay a block away and even 15 miles away, but the nightly rate will decrease as you get farther from the ocean. Total revenue will be higher closer to the water, but with HOA expenses and higher purchase cost, it may pencil out better to be a block away. 

      Punch up the numbers and see what makes sense. I generally don't love condos due to the board and HOA, so I may consider a house for that reason. 

      I'm not sure this is necessarily true.

      When comparing a condo to a condo or a house to a house then yes, proximity to the beach will directly affect rates.  But from what I'm looking at (have VRBO open for Destin right now) a house a block away with a pool is going for FAR more nightly than a beachfront condo.

      3br beachfront condo rates are $169-$350/nt looking right now.  4br is $230-$500.  I'm sure those rates were higher in the heart of summer but how much higher?

      We stayed in a 4br house a block from the beach with a nice pool a couple of weeks ago and paid $1425/nt and felt like we were getting a deal.  The place next door had a little nicer outdoor area and was renting for $2100/nt.

      I'd be interested in hearing what beachfront condo owners are pulling in post covid.  I remember owners pre-covid posting on here and being happy with $35k-$65k.  I'm sure that is a fair bit higher post covid but the 4br house we stayed at last week a block off the beach is for sale right now and they posted their rental data with $250k gross rents this year.  I doubt any 4br condo is pulling anywhere close to that, but I'd be interested to hear from the folks that own one.

      Yes Ryan - i agree as i own just off 30a beach & those numbers are correct $180k per annum for a 5/6 bed house is achievable. The benefit of the house over the Condo is that it allows 2 or 3 family members to come at once & split the $1000/nite fee plus HOA fees ALWAYS go up!

      1Reply
    • Joe SplitrockPro Member
      Moderator
      Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
      5y
      Originally posted by @Ryan Moyer:
      Originally posted by @Joe Splitrock:
      My family is currently shopping to vacation this winter and we are shopping for beach front only. I can guarantee you that beach front nightly rates are far greater. There are people willing to stay a block away and even 15 miles away, but the nightly rate will decrease as you get farther from the ocean. Total revenue will be higher closer to the water, but with HOA expenses and higher purchase cost, it may pencil out better to be a block away. 

      Punch up the numbers and see what makes sense. I generally don't love condos due to the board and HOA, so I may consider a house for that reason. 

      I'm not sure this is necessarily true.

      When comparing a condo to a condo or a house to a house then yes, proximity to the beach will directly affect rates.  But from what I'm looking at (have VRBO open for Destin right now) a house a block away with a pool is going for FAR more nightly than a beachfront condo.

      3br beachfront condo rates are $169-$350/nt looking right now.  4br is $230-$500.  I'm sure those rates were higher in the heart of summer but how much higher?

      We stayed in a 4br house a block from the beach with a nice pool a couple of weeks ago and paid $1425/nt and felt like we were getting a deal.  The place next door had a little nicer outdoor area and was renting for $2100/nt.

      I'd be interested in hearing what beachfront condo owners are pulling in post covid.  I remember owners pre-covid posting on here and being happy with $35k-$65k.  I'm sure that is a fair bit higher post covid but the 4br house we stayed at last week a block off the beach is for sale right now and they posted their rental data with $250k gross rents this year.  I doubt any 4br condo is pulling anywhere close to that, but I'd be interested to hear from the folks that own one.

      Sure comparing dissimilar properties, maybe something a block from the beach generates more revenue. Place an identical 4 bedroom house compared to a 4 bedroom house a block from the ocean and the ocean property will generate more gross income. It will also cost more and maybe after expenses, the house a block away generates more net income. I think it is just logical that ocean front real estate is more valuable and more desirable. 

      As I said, it is about running the numbers and looking at more than gross rents. Heating pools, HOA, etc. are all expenses that will cut into your profits. Although HOA is undesirable in some ways, it also means no exterior or pool maintenance to coordinate and pay for. It all has to be weighed out.

      0Reply
    • Ryan MoyerBusiness Member
      Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votes
      5y
      Originally posted by @Ryan Moyer:
      Originally posted by @Joe Splitrock:
      My family is currently shopping to vacation this winter and we are shopping for beach front only. I can guarantee you that beach front nightly rates are far greater. There are people willing to stay a block away and even 15 miles away, but the nightly rate will decrease as you get farther from the ocean. Total revenue will be higher closer to the water, but with HOA expenses and higher purchase cost, it may pencil out better to be a block away. 

      Punch up the numbers and see what makes sense. I generally don't love condos due to the board and HOA, so I may consider a house for that reason. 

      I'm not sure this is necessarily true.

      When comparing a condo to a condo or a house to a house then yes, proximity to the beach will directly affect rates.  But from what I'm looking at (have VRBO open for Destin right now) a house a block away with a pool is going for FAR more nightly than a beachfront condo.

      3br beachfront condo rates are $169-$350/nt looking right now.  4br is $230-$500.  I'm sure those rates were higher in the heart of summer but how much higher?

      We stayed in a 4br house a block from the beach with a nice pool a couple of weeks ago and paid $1425/nt and felt like we were getting a deal.  The place next door had a little nicer outdoor area and was renting for $2100/nt.

      I'd be interested in hearing what beachfront condo owners are pulling in post covid.  I remember owners pre-covid posting on here and being happy with $35k-$65k.  I'm sure that is a fair bit higher post covid but the 4br house we stayed at last week a block off the beach is for sale right now and they posted their rental data with $250k gross rents this year.  I doubt any 4br condo is pulling anywhere close to that, but I'd be interested to hear from the folks that own one.

      Edit: whoops, posted in the wrong place.

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  • Ryan MoyerBusiness Member
    Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votes
    5y
    Originally posted by @Joe Splitrock:

    Sure comparing dissimilar properties, maybe something a block from the beach generates more revenue. Place an identical 4 bedroom house compared to a 4 bedroom house a block from the ocean and the ocean property will generate more gross income.

    I mean, obviously.  This thread is specifically about comparing dissimilar properties in the same price range with one being a condo on the beach against a house just off the beach.

    Does it really even need to be stated that if you take the exact same property and put it on the beach it is going to rent for more than that exact same property a block away from the beach?  That is both exceedingly obvious and also not very relevant because we're not talking about putting the exact same property on the beach or a block away from it.

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    • Joe SplitrockPro Member
      Moderator
      Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
      5y
      Originally posted by @Ryan Moyer:
      Originally posted by @Joe Splitrock:

      Sure comparing dissimilar properties, maybe something a block from the beach generates more revenue. Place an identical 4 bedroom house compared to a 4 bedroom house a block from the ocean and the ocean property will generate more gross income.

      I mean, obviously.  This thread is specifically about comparing dissimilar properties in the same price range with one being a condo on the beach against a house just off the beach.

      Does it really even need to be stated that if you take the exact same property and put it on the beach it is going to rent for more than that exact same property a block away from the beach?  That is both exceedingly obvious and also not very relevant because we're not talking about putting the exact same property on the beach or a block away from it.

      I was responding to your example comparing 3 bedroom condo to 4 bedroom house. The original post said "This would be assuming similar specs (3b/3b) and purchase price." I still think a condo compared to house with similar square feet, bedrooms and bath would rent for more on the ocean. Of course lots of factors play into this. Is the condo ocean view? Does the condo have pool access? Does the one block to ocean from the house afford public beach access? Does the house have a pool? Devils in the details. 

      It is really just best to run numbers specific to the properties and compare.

      0Reply
    • Ryan MoyerBusiness Member
      Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votes
      5y
      Originally posted by @Ryan Moyer:
      Originally posted by @Joe Splitrock:

      Sure comparing dissimilar properties, maybe something a block from the beach generates more revenue. Place an identical 4 bedroom house compared to a 4 bedroom house a block from the ocean and the ocean property will generate more gross income.

      I mean, obviously.  This thread is specifically about comparing dissimilar properties in the same price range with one being a condo on the beach against a house just off the beach.

      Does it really even need to be stated that if you take the exact same property and put it on the beach it is going to rent for more than that exact same property a block away from the beach?  That is both exceedingly obvious and also not very relevant because we're not talking about putting the exact same property on the beach or a block away from it.

      I listed both the 3br and 4br rates for condos. Whether you compare the 3br condo or 4br condo to the 4br houses the rates look much lower on the condos.

      If any beachfront condo owners can chime in with their actual numbers this year though that may be helpful because the enemy method is not foolproof so it is certainly possible I am well underestimating their gross income post-covid.

      What are 3br/4br oceanfront condos bringing in for gross rent?  I see nice oceanfront 3br/4br condos listed at $1.2M-1.8M right now.  Are these bringing in $150k-$250k like houses in that price range are?

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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y

    Yes, a house costs more than a condo, but people are always looking for privacy, which you can't fully get in a condo. As well as something different, you would be marketing an experience most people dream of. The capacity to change a house is greater, and it's easier to sell in the long run.

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  • Shane Lafleur
    Real Estate Agent · Holly Springs, NC · Member since 2020 · 169 posts · 161 votes
    5y

    @David New

    I was thinking the same so I appreciate the discussion. Looks like some good responses here. I am trying to figure out the same for North Myrtle Beach Properties.

    Houses are more expensive but little/no HOA.

    Condos are less expensive and closer to the water but HOA exceeds the mortgage even at some places.

    My fear with Condo is the HOA can always go up thus never seeing a growth in cash flow over time.

    Also, another note to be cautious of as it seems to be a thing in North Myrtle is that the HOA of the condos have a property manager on site and if you plan to rent out your property you have to use that company's property management services. I am still waiting to get a clear answer on that, if it's just included in the HOA fee, and I'm asking the condos to send me their bylaws to confirm.

    1Reply
  • Sylvia B.
    Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes
    5y

    My experience as a renter: We live in Missouri, so when we vacation at the beach we want to be on the beach. We would only consider renting a block away if we had no other option, which is highly unlikely. However, we don't do condos. We even try to avoid renting houses near condos, though that has become practically impossible. Pools don't sway us. We don't drive 12 hours to the beach to swim in a pool.

    So for me, neither of your options is good. But if I had to choose between them I'd go for the house.

    0Reply
  • Hugo Bolio
    Developer · Mexico · Member since 2021 · 4 posts · 3 votes
    5y

    For a short term rental, guests will pay for the ocean view, plus the maintenance of the condo will be lower than a house.

    Good Luck!
      

    0Reply
  • Heidi M.
    Rental Property Investor · Reno, NV · Member since 2013 · 77 posts · 31 votes
    5y

    @David New save yourself the dreaded HOA headache and buy the house

    0Reply
  • David New
    OP
    Rental Property Investor · Atlanta, GA · Member since 2019 · 78 posts · 33 votes
    5y

    Thanks so much for all of the responses. These have been very helpful.

    0Reply
  • Joel Lazar
    Investor · Kissimmee, FL · Member since 2020 · 120 posts · 35 votes
    5y

    @David New short term rental, beachfront wins hands down. Long term, house. I just went under contract with the exact same choices. Bought the Beach cottage 2 blocks away. Of course money no object, I would take the beach front condo.

    0Reply
  • Sid Shankar
    Rental Property Investor · Chicago, IL · Member since 2018 · 30 posts · 4 votes
    5y

    @David New condo with ocean view always.. the view is what I look for on a vacation have my own at myrtle beach

    0Reply
  • Melody R.
    Real Estate Agent · Los Angeles · Member since 2018 · 80 posts · 75 votes
    5y

    @David New

    People traveling with children often avoid condos because they want outdoor space.

    If the condo is on the first floor with direct access to the beach you can capture travelers who want private outdoor space plus beachfront.

    Read the CC&R's carefully. Keep in mind that you are at the mercy of the HOA if you decide to buy the condo.

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