My wife and I are full-time RV enthusiasts, and brand new RE investors. We only have one rehab to brag about. It was a four-plex we flipped back in 2011. We didn't make a ton of money, but were surprised at how the minimal repairs increased the value, and how fast we actually sold the units!
These days, we live in our 40' motorhome, full-time, and work in RV resorts across the country. We are park hosts, reservation agents, etc... basically whatever is needed by the park. We've been working at a park in Key West for about six months, and recently began to look into investing in this area. I sense opportunity here.
But, Key West is an odd duck, for sure. It is overrun by tourists for most of the year. The only slow times appear to be from August thru October. You can count on a hurricane every few years, so home insurance is sky-high. And, the town is party central (for those not familiar).
When researching the Airbnb potential, I found that there is a 28 day minimum stay requirement... so, I don't know if that would be a good fit or not. Hopefully, someone reading this will be more familiar with the area and be able to offer some investment tips.
So, if you were physically living here in the area, and had a background in construction/remodeling, how would you approach RE investing? I feel like there is opportunity here, but just can't put my finger on the best approach!
Thanks for any input!
I worked on an apartment investment in Key West, and it is definitely an odd duck. Rehabbing costs can be ghastly expensive in Key West since everything has to be brought down to the island. If you are using materials like granite or drywall the cost of shipping it down from Miami can be as much as the materials. After Irma, there are definitely deals to be made in the keys, just make sure you are getting a sound house. The insurance on anything frame construction would be too much, so focus on concrete block.
Originally posted by @Krystal Thomas :
There certainly is potential but it will likely take some patience to find the right fit. Costs of construction are much higher than in the mainland and additionally there is a substantial improvement rule that applies to renovated properties.
Thanks Krystal. I don't see a way for me to purchase anything outright, but would it be possible to wholesale a property by assignment, wholesale a assign a lease option, etc... those are a few questions I have. I've been doing some research about Airbnb, which I thought may have potential. Just not sure if this is the best area to get my start!
I appreciate your input.
Hey @Todd Connelly
Ironically was just in the Keys today running the marathon. I actually was surprised with the amount of tourist still visiting in October.
I am not well versed in the area but you should definitely try to find investors actively working in the area first if you want to wholesale. Like mentioned above, the cost to deliver materials 150+ miles south would really deter me from investing there as a flipper. Cost per square foot is also relatively expensive so finding a flipper to buy these properties cash is much harder than somewhere in a nearby city like Homestead.
Speaking of Homestead, I know of a few colleagues investing there for Airbnb potential. Staying a night in the keys will run you $200 a night or more. There are many frugal Airbnb visitors saving half of that money by staying in Homestead and driving 100 miles down in their convertible rental car. It is a beautiful view for those coming up north.
I actually spoke to some tourists today and they called Key West the Las Vegas of the east coast, first time I heard that haha.
Hope I shared some insight for you. Feel free to reach out with any more questions.
Thanks @Gabriel Amedee :
I hope you had a great time visiting.
Great observation! I hadn't considered Homestead, but it really makes a lot of sense.