Hi, I am staying on 30A near Destin Florida for the week on a trip. I have noticed an odd number of houses for sale. I would think in such a hot little area people would be holding their investments for the growth. Being new to the area I feel like I am missing something. Any locals have any insight into this?
@Nathan Killebrew , Welcome to the area! I'm a Realtor and Investor in the area. I have an AirBnB and a flip that I just finished. The market is very hot right now, but even during a hot market, properties (especially investment properties) will remain unsold because they barely cash flow, if at all. Most of the good deals are under contract within 24 hrs though.
@Matt "Roar" Gardner Good insight! But why is there barely any cash flow in the destin area?
Roar is referencing the sale price to the annual gross rental income. Many houses for sale don't command the level of annual rental income to justify their price. The ones that actually do get the income sell quickly. The rental income equation is the biggest unknown to the buyers not familiar with the market and is a function of number of beds, location, amenities, and distance to the beach.
Finally, if you are not managing it yourself, your short term rental management company and the performance they can generate are probably going to be the most significant driver of your success.