Condo other investment in North Wildwood.
Purchase price: $360,000
Cash invested: $72,000
This is a Vacation Rental at one of the hottest beach towns in NJ. Right now, the place pays for itself by renting 12-14 weeks in the summer @ about $2600/week. We enjoy the place in the off-season but may start renting then as well. If I rented throughout the off-season I would net about 20k/yr after all bills/repairs, etc.
What made you interested in investing in this type of deal?
My wife and I wanted a beach house and we were only 29/27 years old. We had the money to put 20% down and the credit to get a loan but were concerned about having a second mortgage outside of our everyday home in Philadelphia. We figured if we rent it most of the summer it would pay for itself, which it has so far.
How did you find this deal and how did you negotiate it?
Was on the market for months. It was in an amazing location but no one was touching it. An older lady owned it but moved to Florida. It was packed with junk so you really had to look past that. Condos were all listed around 390k-410k in this area in 2018. This place was listed around 380k, we started around 340k and ended up at 360k. Today (2021) it would go for 430k-440k. We only had to paint, clean out the place, add furniture, and we immediately started renting.
How did you finance this deal?
20% down/30 years with a Local Bank We recently refinanced since interest rates dropped during COVID. We kept the same payment and took it to 20 years.
How did you add value to the deal?
This location books all summer no matter what house you have. The nicer you have, the more rent, the better the tenants.
@Ron Gunning I’m from Wildwood and have vacation rentals there as well. How do you typically rent out your condo? Do you do it yourself (Airbnb) or use a property manager/realtor? Any issues with the condo association when you went to rent it out?
Hi Brad, I typically use Lee's Realty in Wildwood. They charge 12% if they find me the deal and 10% if I send someone to them. For the first two seasons, I was finding the renters myself simply using Facebook. I created a page called @ToleyGunn Shore House and invited all my friends. I was able to fill most summer weeks on my own that way. I'm from NE Philly and pretty much everyone I know goes to North Wildwood in the summer. I was going to use Air BnB but I never had to, created a page and took it down almost immediately.
This is my first rental property so it's fairly easy for me to manage myself. We have our cleaners take pictures if anything seems off but for the most part we never really had a problem. We stay away from young adults and most of my renters are friends or friends of friends. Also, I think with such a large weekly rental rate, you tend to get quality renters. In my third year now, I don't even advertise and I have to turn down more and more people. I have been just about booked since Christmas.
No issues renting in my HOA. My building only has 4 units and 3/4 rent. The neighbors definitely go down much more than us. I typically only block out 2-3 weeks for our enjoyment.
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