Rental Property Investor · Elmhurst, NY · Member since 2014 · 31 posts · 5 votes
I'm very excited to announce that I am in the mist of purchasing my very first (sole) investment. Yay!
The process has been scary and exciting at the same time. I wanted to know if anyone at BP purchased property in PR recently. If so, would you please contact me?
My brother in law is an attorney in NY and has been helping me understand the sales contract and loan paperwork information. Yet, I want to speak with someone who has purchased/invested in PR recently. Thanks!
Hi John - I'm interested in learning more about the interest rate you were quoted. Mine seems a bit high (5.75%). Island properties usually have higher interest rates, but this seems too high. Would you mind sharing your interest rate? Who is your preferred lender?
Also, I'm planning to use this condo as a vacation rental. Are there any local websites you would recommend I utilize? Think Airbnb, Wimdu, VRBO, etc.
Lastly, I'm having work done to the apartment after closing. What is a realistic timeline to expect from islander when renovating a studio apartment? I'm having the floods, sliding door and balcony railing replaced. Everything else is very minor repairs.
Yes, that interest rate seem a bit high. Shop around with different banks. As far as the rehab you need done, it shouldn't take too long but since you are in NY, I would recommend having someone locally keep tabs on the contractor. BE CAREFUL!! Also, check out homeaway.com
It's important not to ignore the socioeconomic problems happening in the region when considering investing in PR. While these factors are not meant to deter you from investing there (I have no experience with PR investing), it should give you pause, and you should be aware of all of the risks when purchasing property there. It's possible that the property may have no problem being rented out as a vacation rental, but this may affect your exit strategy to sell for appreciation to local residents in 5-10 years:
Puerto Rico’s Drastic Population Loss Deepens Its Economic Crisis
Yes, that interest rate seem a bit high. Shop around with different banks. As far as the rehab you need done, it shouldn't take too long but since you are in NY, I would recommend having someone locally keep tabs on the contractor. BE CAREFUL!! Also, check out homeaway.com
Hope this helps,
Hi Mario - this is what I suspected. I went to two banks and one said 5.75% and the other said 6% so this is why I wanted to speak with someone who has purchased in PR recently. Luckily my uncle lives less than an hour away from the property so he will be checking in for me. Thanks!
It's important not to ignore the socioeconomic problems happening in the region when considering investing in PR. While these factors are not meant to deter you from investing there (I have no experience with PR investing), it should give you pause, and you should be aware of all of the risks when purchasing property there. It's possible that the property may have no problem being rented out as a vacation rental, but this may affect your exit strategy to sell for appreciation to local residents in 5-10 years:
Puerto Rico’s Drastic Population Loss Deepens Its Economic Crisis
Hi Jeff - Thank you for taking the time to provide these articles. I definitively did research before deciding to move forward with the buy. While it's unfortunate that PR's request for debt consolidation/restructuring was rejected in June, my target audience are vacationers. The beachfront (19th floor) condo, currently a studio but is big enough to be converted into a 1BR, is located in Luquillo, which is surrounded by PR's biggest tourist attractions. Plus, the property was just appraised and it came in $30K more than what I'm paying. My goal isn't to sell it, and if I did, it wouldn't be marketed to locals but rather others looking to buy a second vacation home. Luckily my uncle lives less than an hour away from the property so he will be helping me manage the property.
What are benefits in investing in PR over anywhere in US?
I think it is more stable, manageable & less complicated to invest in US in compare to PR.
PR properties are very inexpensive right now, which was a big appeal. Plus, Culebra has consistently been ranked top 10 most beautiful beaches in the world. My condo is less than 20 mins away from the boat that takes tourist there everyday. I plan to use the property as a vacation rental.
And yes, I do agree US is more stable, but usually more stable = higher home prices, which unfortunately with my limited capital, I cannot afford. If you have any suggestions where in the US I can find beachfront property for less than $70K, that has steady tourism, then please share with me! :) I'm still new and learning. I'm open to suggestion on market opportunities that I may be missing. Thanks!
I am not sure about beach front but you can easily get 35-40 K condo in stable economy like Dallas, Houston etc... That will generate very good cash flow.
Vacation rental is also more management intensive. if you are planning to scale up, keep your investment simple. This is just my thoughts... not aware of all numbers like how is tax structure and ROI in your PR investment.
If possible please let us know how numbers works in PR...
I am not sure about beach front but you can easily get 35-40 K condo in stable economy like Dallas, Houston etc... That will generate very good cash flow.
Vacation rental is also more management intensive. if you are planning to scale up, keep your investment simple. This is just my thoughts... not aware of all numbers like how is tax structure and ROI in your PR investment.
If possible please let us know how numbers works in PR...
Monthly cash flow is difficult to estimate since seasonality plays a key role. However, my 1st year estimation is $6,000-$7,500 (profit). This is after monthly cost, maintenance and taxes. Amortization is $94/month. I'm uncertain about the depreciation rate. As for the rate of appreciation, this data in PR is limited, but I know that I'm purchasing this condo $30K less than current appraised value.
Airbnb is slowly taking ground in PR but the number one website for real estate marketing (both lease and sales) is www.clasificadosonline.com
Good luck,
Dennis
Thanks Dennis! I did know about this site, but I didn't realize local use it to also rent properties. I thought it was strictly for selling/buying properties. Thanks!