Royale with Cheese Posted March 27, 2023 Posted March 27, 2023 Reaching out to those who have invested in rental properties. I currently own a condo in the hottest market in Atlanta according to my real estate agent and what I'm seeing. There are still bidding wars and people are paying above listing....even with the interest rates as high as they are. They are building up the downtown area of my city and property value is increasing the surrounding areas. My place has increased by $40,000 since January. I'm 1 mile away from all the bars and hangout areas. It sounds like it's smart to stick with this place. However, I'm already not liking long term renting and considering the short term/AirBnB vacation homes. So I do have a wonderful tenant who pays on time and keeps it clean. The place is 40 years old and it already has had two issues so I'm net negative so far. I spent all weekend getting issues fixed...I don't have a management company. I expect more issues because of its age. Has anyone owned a vacation rental? I feel like they can be much more profitable but I don't know. I'm looking at condos on the beach in Florida and South Carolina. I'm thinking about selling my condo when my renter leaves. If I sold it now, I could probably make $175,000 on it. My tenant extended his lease for another 12 months so by this time next year, it should go up even more and of course the mortgage will be paid down more. If anyone has good knowledge of this, I would love to talk. I'm willing to put a major risk on this so it's a little scary. I want to be able to put down between 60%-100% down payment if I include the equity of my current house. I couldn't pay cash for a Florida beach house as they are $800,000+ but places like Myrtle Beach, SC I could pay cash for a $500,000 condo there. I'm seeing places on the beach at condos of that quality going for $175-$200 a night plus cleaning fees. I believe those onsite rental management companies charge 40%. 20% for those that aren't onsite. Am I right to assume that I would make a profit quicker with vacation rentals and the inflation would be higher each year? I currently make $263 profit on my current rental per month. Quote
billsfanmiamioh Posted March 27, 2023 Posted March 27, 2023 We have a short term rental condo in a resort town in Montana. I can probably get deeper into it later or via PM but a few quick things off the top of my head. As with anything home related, there will always be expenses you didn’t think about. Especially with a short term rental. Stuff like rental permits, supplies not provided by mgmt company, utilities, HOA assessments, etc. Do A LOT of research on your target area. You still won’t be able to nail down an exact number on what you’ll pull in annually, but you can get a good idea of market conditions by looking at a number of “comparable” properties on Airbnb / vrbo, etc. Look at a lot of calendars to get an idea of how rates change for over the course of the year and what occupancy looks like. Similar to point above, do a lot of research about HOA rules, short term rental permitting, and any other local rules & regulations. Do a lot of research on your property management co. If you are absentee, this is obv the most important part of the equation outside of the property itself. Protect yourself. I formed an LLC to purchase our rental and it’s owned by the LLC with my wife and I as co owners (also had to register as a foreign LLC in Montana as I established the LLC in / we live in Ohio.) This took longer to set up (took IRS a good 2 months to get me an EIN) and is more costly but it provides us a layer of protection if a guest were to sue us for anything that happened there. As with above, pay up for good insurance. I went with a place that specializes in short term rental insurance. Many “traditional” coverages have gaps that exist due to nature of short term rental (even with appropriate riders). So many things that could bite you in the ass If you’re not careful. I think I’m order to really make bank on a short term rental, it really must be in the right spot (shocker). Don’t just think “hey it’s in myrtle beach, it’ll do great”. What about the specific spot would make it do great? What stands out against all the competition? (There’s a ton nowadays) We’ve been happy with our situation because we love the area so much and we personally benefit from getting to use it. Ask yourself what you’re trying to get out of it to help determine if it’s a “good” move or not. Is it more of a second home that you’ll be able to offset some costs of? Is it purely for profit with no real personal attachment to the area? Everyone’s situation is different and the determination of if it’s “successful” or not will vary accordingly. 1 Quote
Royale with Cheese Posted March 27, 2023 Author Posted March 27, 2023 14 minutes ago, billsfanmiamioh said: We have a short term rental condo in a resort town in Montana. I can probably get deeper into it later or via PM but a few quick things off the top of my head. As with anything home related, there will always be expenses you didn’t think about. Especially with a short term rental. Stuff like rental permits, supplies not provided by mgmt company, utilities, HOA assessments, etc. Do A LOT of research on your target area. You still won’t be able to nail down an exact number on what you’ll pull in annually, but you can get a good idea of market conditions by looking at a number of “comparable” properties on Airbnb / vrbo, etc. Look at a lot of calendars to get an idea of how rates change for over the course of the year and what occupancy looks like. Similar to point above, do a lot of research about HOA rules, short term rental permitting, and any other local rules & regulations. Do a lot of research on your property management co. If you are absentee, this is obv the most important part of the equation outside of the property itself. Protect yourself. I formed an LLC to purchase our rental and it’s owned by the LLC with my wife and I as co owners (also had to register as a foreign LLC in Montana as I established the LLC in / we live in Ohio.) This took longer to set up (took IRS a good 2 months to get me an EIN) and is more costly but it provides us a layer of protection if a guest were to sue us for anything that happened there. As with above, pay up for good insurance. I went with a place that specializes in short term rental insurance. Many “traditional” coverages have gaps that exist due to nature of short term rental (even with appropriate riders). So many things that could bite you in the ass If you’re not careful. I think I’m order to really make bank on a short term rental, it really must be in the right spot (shocker). Don’t just think “hey it’s in myrtle beach, it’ll do great”. What about the specific spot would make it do great? What stands out against all the competition? (There’s a ton nowadays) We’ve been happy with our situation because we love the area so much and we personally benefit from getting to use it. Ask yourself what you’re trying to get out of it to help determine if it’s a “good” move or not. Is it more of a second home that you’ll be able to offset some costs of? Is it purely for profit with no real personal attachment to the area? Everyone’s situation is different and the determination of if it’s “successful” or not will vary accordingly. I appreciate the post. Since I would be 5-6 hours away, I would probably do the full gambit. My friend owns one in Daytona Beach and he gives the onsite property management 40% It's a lot but he says they take care of everything and keep the bookings filled. They take care of all the expenses and doesn't have to do anything. He didn't start making really good money until about year 5 I believe. This would be purely an investment that I could use every once in awhile for myself and family. I do want to spend a little more on a nicer place hoping to get better quality of people...but I think that's unpredictable. I'm doing some basic research now. When it gets closer to time, I'm going to contact a Short Term Rental Real Estate to get a breakdown of everything. I'm looking at this as my retirement lol. The southeastern beach region is what I'm looking at now because I'm familiar with it since I vacation there a lot. I don't know much about Montana but if investments look good, I'll look into it. I'm not tied to any specific market or type of rental. I know the cabins here in north GA are popular. 1 Quote
aristocrat Posted March 27, 2023 Posted March 27, 2023 You will always get a better return on your cash using leverage but with that comes obvious risk. So always keep a lot of cash on hand. The short term rentals are getting push back from hotel lobbyists, hoas etc so careful on the local politics. When you sell 1031 the sale and trade up into the more expensive property. 2 Quote
Augie Posted March 27, 2023 Posted March 27, 2023 48 minutes ago, billsfanmiamioh said: We have a short term rental condo in a resort town in Montana. I can probably get deeper into it later or via PM but a few quick things off the top of my head. As with anything home related, there will always be expenses you didn’t think about. Especially with a short term rental. Stuff like rental permits, supplies not provided by mgmt company, utilities, HOA assessments, etc. Do A LOT of research on your target area. You still won’t be able to nail down an exact number on what you’ll pull in annually, but you can get a good idea of market conditions by looking at a number of “comparable” properties on Airbnb / vrbo, etc. Look at a lot of calendars to get an idea of how rates change for over the course of the year and what occupancy looks like. Similar to point above, do a lot of research about HOA rules, short term rental permitting, and any other local rules & regulations. Do a lot of research on your property management co. If you are absentee, this is obv the most important part of the equation outside of the property itself. Protect yourself. I formed an LLC to purchase our rental and it’s owned by the LLC with my wife and I as co owners (also had to register as a foreign LLC in Montana as I established the LLC in / we live in Ohio.) This took longer to set up (took IRS a good 2 months to get me an EIN) and is more costly but it provides us a layer of protection if a guest were to sue us for anything that happened there. As with above, pay up for good insurance. I went with a place that specializes in short term rental insurance. Many “traditional” coverages have gaps that exist due to nature of short term rental (even with appropriate riders). So many things that could bite you in the ass If you’re not careful. I think I’m order to really make bank on a short term rental, it really must be in the right spot (shocker). Don’t just think “hey it’s in myrtle beach, it’ll do great”. What about the specific spot would make it do great? What stands out against all the competition? (There’s a ton nowadays) We’ve been happy with our situation because we love the area so much and we personally benefit from getting to use it. Ask yourself what you’re trying to get out of it to help determine if it’s a “good” move or not. Is it more of a second home that you’ll be able to offset some costs of? Is it purely for profit with no real personal attachment to the area? Everyone’s situation is different and the determination of if it’s “successful” or not will vary accordingly. This is a LOT of very good information. First and foremost, CYA. In addition to the insurance topics you noted, I’d at least look into a good umbrella policy. It seems insurance has a funny way of covering “everything but that”. When looking at how much equity you have, people often underestimate transaction costs. Just because you see prices in the neighborhood rising doesn’t mean you can pay a 6% commission plus closing costs and come out ahead. Be realistic about the expenses of each transaction, both buying and selling. On a $300k sale the commission alone could be $18k. That’s a good chunk of change. My background is in banking/real estate appraising and long term rentals for Sotheby’s. Bankers (and FNMA) don’t like financing in projects full of rentals, so many projects have limitations on what percentage of units can be rented to keep conventional financing available to buyers. We had a property here on the belt line that our son lived in. When he moved out we were on a waiting list to be able to rent. We would have preferred to keep it and rent it forever, but the wait list might have been a year or two long (you never know!) so we just sold it. All rentals are not created equal. We used to do a lot of work on Siesta Key, FL (outside of Sarasota). A giant sand bar mostly full of rental condos and some second homes. Each project has their own covenants and that affects value. Two units may look nearly identical, but if one is a 2-3 night rental minimum it’s going to attract more investment types of buyers than a place with a one month minimum or two times a year. Compare apples to apples. Turning over frequently seriously adds to the wear and tear and level of management involved. Short term rentals at the beach do not get nearly the respect a long term tenant will show for their full-time rental home. Do not be surprised by the abuse some people will inflict on your investment. You want it to be nice enough to attract people and keep them happy, but not so nice that you freak out at the thought of water marks on an end table or a stain on the carpet. Look at the numbers!!! Obviously the monthly HOA is a major consideration, but look at the reserves as well. There is a wide spectrum of opinions on how to manage the budget. Some places like to keep the HOA low so it’s affordable, which sounds attractive initially. But it can bite you on the arse if you buy in a low HOA complex, only to find out there is a $20k special assessment a few months after you bought for new roofs because the low HOA wasn’t sufficient to add reserves to cover for replacements. A place with a slightly higher HOA might be a better option than getting hit with special assessments. Those are my initial thoughts, but I love this stuff (including the hunt for the property) so I’m sure I’ll chime in later with more thoughts. 1 Quote
Royale with Cheese Posted March 27, 2023 Author Posted March 27, 2023 33 minutes ago, Augie said: This is a LOT of very good information. First and foremost, CYA. In addition to the insurance topics you noted, I’d at least look into a good umbrella policy. It seems insurance has a funny way of covering “everything but that”. When looking at how much equity you have, people often underestimate transaction costs. Just because you see prices in the neighborhood rising doesn’t mean you can pay a 6% commission plus closing costs and come out ahead. Be realistic about the expenses of each transaction, both buying and selling. On a $300k sale the commission alone could be $18k. That’s a good chunk of change. My background is in banking/real estate appraising and long term rentals for Sotheby’s. Bankers (and FNMA) don’t like financing in projects full of rentals, so many projects have limitations on what percentage of units can be rented to keep conventional financing available to buyers. We had a property here on the belt line that our son lived in. When he moved out we were on a waiting list to be able to rent. We would have preferred to keep it and rent it forever, but the wait list might have been a year or two long (you never know!) so we just sold it. All rentals are not created equal. We used to do a lot of work on Siesta Key, FL (outside of Sarasota). A giant sand bar mostly full of rental condos and some second homes. Each project has their own covenants and that affects value. Two units may look nearly identical, but if one is a 2-3 night rental minimum it’s going to attract more investment types of buyers than a place with a one month minimum or two times a year. Compare apples to apples. Turning over frequently seriously adds to the wear and tear and level of management involved. Short term rentals at the beach do not get nearly the respect a long term tenant will show for their full-time rental home. Do not be surprised by the abuse some people will inflict on your investment. You want it to be nice enough to attract people and keep them happy, but not so nice that you freak out at the thought of water marks on an end table or a stain on the carpet. Look at the numbers!!! Obviously the monthly HOA is a major consideration, but look at the reserves as well. There is a wide spectrum of opinions on how to manage the budget. Some places like to keep the HOA low so it’s affordable, which sounds attractive initially. But it can bite you on the arse if you buy in a low HOA complex, only to find out there is a $20k special assessment a few months after you bought for new roofs because the low HOA wasn’t sufficient to add reserves to cover for replacements. A place with a slightly higher HOA might be a better option than getting hit with special assessments. Those are my initial thoughts, but I love this stuff (including the hunt for the property) so I’m sure I’ll chime in later with more thoughts. What does the Atlanta market look like for short term rentals? I'm just looking at the most popular vacation areas with the shortest offseason. Seems like the beaches in Florida only are down about 3 months out of the year and it gets nuts after that. I've looked at properties in North Georgia and I couldn't believe how expensive they were. Quote
Augie Posted March 27, 2023 Posted March 27, 2023 1 minute ago, Royale with Cheese said: What does the Atlanta market look like for short term rentals? I'm just looking at the most popular vacation areas with the shortest offseason. Seems like the beaches in Florida only are down about 3 months out of the year and it gets nuts after that. I've looked at properties in North Georgia and I couldn't believe how expensive they were. I don’t see ATL as a great short term rental market. I mean, why? Few people come here to vacation for a week. People are mostly here for jobs, and we have more apartments than anywhere I’ve ever lived. But I see it as solid for a long term rental market because people are here out of necessity. Our highs are not as high, but our lows are not as low for real estate in general it seems. Investment properties and 2nd/3rd homes seem to have a more volatile market with bigger swings. The beaches and the mountains are where people go for a long weekend or a couple weeks at the right time of year. We’ve spent part of our summer in Blowing Rock, NC for the last few years. It’s easy for us to get a rental that will take the dogs to get away from the summer heat. The elevation there is much higher that North GA mountains (like double at about 4k feet) so it’s much cooler in the summer. PLUS, Blowing Rock and Boone (home of Appalachian State) have strong winter rentals for the skiing crowd. Great for the fall foliage crowd too. Blowing Rock is a charming little town, and Boone has a nice college town vibe only about 15 minutes away. I think it’s about 5 hours from where I live. Do your homework, and consider all the options. FWIW, I’d consider staying with the long term rental until rate hikes filter down to the market, especially the “resort markets”. There is a project where we rented our last year in Sarasota. We had sold our house but decided to let our son finish high school before moving. I still follow this project and others as I’d like to get a place there at some point. NOW is not that point IMO, but we may be getting closer. Many hundreds of houses in there, and 6-12 months ago there were only 1-2 listings at any given moment, and they got snapped up ASAP. I just looked, and they now have 11 listings, most of which have been reduced in price already. Do your homework now, but let the market work for you. Buy low, sell high. Don’t be in a rush “just because”. A ton of factors to consider, like when is best to sell in ATL (which is rated as one of the strongest markets over the next year, I’ll look for the article). These are just a bunch of thoughts, not really advice. Too many unknowns. Quote
Miyagi-Do Karate Posted March 27, 2023 Posted March 27, 2023 1 hour ago, mead107 said: I’m glad I sold my 8 unit apartment building in the Schenectady Stockade. Got it in 2003 and sold it in 2009. glad I got rid of it. i rented our prior townhouse that was 20 Minutes away for about 10 years. Hated every minute of it. I even had a property manager. Just all the little things popping up at the worst times, and the HOA constantly squeezing me. Being a landlord is for some and not others. I will never do it again. Such a relief to not even think about it. 1 Quote
Augie Posted March 27, 2023 Posted March 27, 2023 1 hour ago, Royale with Cheese said: What does the Atlanta market look like for short term rentals? I'm just looking at the most popular vacation areas with the shortest offseason. Seems like the beaches in Florida only are down about 3 months out of the year and it gets nuts after that. I've looked at properties in North Georgia and I couldn't believe how expensive they were. FWIW - https://atlantaagentmagazine.com/2023/01/16/atlanta-ranks-no-9-on-zillows-hottest-markets-for-2023/?utm_campaign=eem-newsletter-february-2023-(quick-send)&utm_content=extraordinary-living-e-newsletter_body-feb2023%2ejpg&utm_medium=email&utm_source=activepipe 1 Quote
Royale with Cheese Posted March 27, 2023 Author Posted March 27, 2023 43 minutes ago, Augie said: I don’t see ATL as a great short term rental market. I mean, why? Few people come here to vacation for a week. People are mostly here for jobs, and we have more apartments than anywhere I’ve ever lived. But I see it as solid for a long term rental market because people are here out of necessity. Our highs are not as high, but our lows are not as low for real estate in general it seems. Investment properties and 2nd/3rd homes seem to have a more volatile market with bigger swings. The beaches and the mountains are where people go for a long weekend or a couple weeks at the right time of year. We’ve spent part of our summer in Blowing Rock, NC for the last few years. It’s easy for us to get a rental that will take the dogs to get away from the summer heat. The elevation there is much higher that North GA mountains (like double at about 4k feet) so it’s much cooler in the summer. PLUS, Blowing Rock and Boone (home of Appalachian State) have strong winter rentals for the skiing crowd. Great for the fall foliage crowd too. Blowing Rock is a charming little town, and Boone has a nice college town vibe only about 15 minutes away. I think it’s about 5 hours from where I live. Do your homework, and consider all the options. FWIW, I’d consider staying with the long term rental until rate hikes filter down to the market, especially the “resort markets”. There is a project where we rented our last year in Sarasota. We had sold our house but decided to let our son finish high school before moving. I still follow this project and others as I’d like to get a place there at some point. NOW is not that point IMO, but we may be getting closer. Many hundreds of houses in there, and 6-12 months ago there were only 1-2 listings at any given moment, and they got snapped up ASAP. I just looked, and they now have 11 listings, most of which have been reduced in price already. Do your homework now, but let the market work for you. Buy low, sell high. Don’t be in a rush “just because”. A ton of factors to consider, like when is best to sell in ATL (which is rated as one of the strongest markets over the next year, I’ll look for the article). These are just a bunch of thoughts, not really advice. Too many unknowns. I'm going to assume I will keep this condo for at least 2 more years. My tenants are both teachers and they're saving up to buy their own house. I'm charging them roughly $300 a month less than all the other condos in the area. He takes really good care of the place and has always paid on time. They want to live in Alpharetta and they'll probably need another year to save. I was looking in those areas as well and I do think I want a beach rental so I can use it as well. I work remotely so maybe I work a week in Florida when it's not busy season. Quote
Augie Posted March 28, 2023 Posted March 28, 2023 (edited) 15 minutes ago, Royale with Cheese said: I'm going to assume I will keep this condo for at least 2 more years. My tenants are both teachers and they're saving up to buy their own house. I'm charging them roughly $300 a month less than all the other condos in the area. He takes really good care of the place and has always paid on time. They want to live in Alpharetta and they'll probably need another year to save. I was looking in those areas as well and I do think I want a beach rental so I can use it as well. I work remotely so maybe I work a week in Florida when it's not busy season. We used to live in Hilton Head and go back probably 2 out of 3 years. We usually stay around Harbour Town in Sea Pines. It makes me look on the Sea Pines Real Estate website at the calendars for rentals. This time of year they are already booked well into the fall. Like, it’s hard to find anything in most areas and especially the area we want. The way they rent always amazes me, and we’ve been tempted at times. EDIT: Meant to start with GOOD TENANTS ARE GOLDEN! . Edited March 28, 2023 by Augie Quote
Royale with Cheese Posted March 28, 2023 Author Posted March 28, 2023 11 minutes ago, Augie said: We used to live in Hilton Head and go back probably 2 out of 3 years. We usually stay around Harbour Town in Sea Pines. It makes me look on the Sea Pines Real Estate website at the calendars for rentals. This time of year they are already booked well into the fall. Like, it’s hard to find anything in most areas and especially the area we want. The way they rent always amazes me, and we’ve been tempted at times. EDIT: Meant to start with GOOD TENANTS ARE GOLDEN! . Do you have certain parameters you can set for how long you can make a reservation? Quote
Augie Posted March 28, 2023 Posted March 28, 2023 (edited) 1 hour ago, Royale with Cheese said: Do you have certain parameters you can set for how long you can make a reservation? Not really sure what you mean by the question, but every situation is different. How far in advance? How long can you stay? TOO long is never an issue if you can get a rental permit in the first place. Certain developments have restrictions, and rental companies (on-site or external) have their own expectations. People going to Hilton Head book their summer trips early in the year. Some have repeat customers every year. Edited March 28, 2023 by Augie Quote
Behindenemylines Posted March 28, 2023 Posted March 28, 2023 I have and had lots of rentals. I own student housing and high end rentals. either way it’s not for the timid. you need to ensure you keep liquidity within easy reach because things can go south fast. don’t ever lever one against the other just to buy more. I know more guys that lost it all doing this Air BnB is drying up with lots of competition so be honest about your ability to rent at certain rates it’s all about your long term goals. personally I’m selling all of my real estate holdings right now and going cash until I can find the best property for an exchange -which we may have if your not close to the properties it gets infinitely harder as your future interests and priorities change. Good luck! 1 Quote
Royale with Cheese Posted March 28, 2023 Author Posted March 28, 2023 1 hour ago, Augie said: Not really sure what you mean by the question, but every situation is different. How far in advance? How long can you stay? TOO long is never an issue if you can get a rental permit in the first place. Certain developments have restrictions, and rental companies (on-site or external) have their own expectations. People going to Hilton Head book their summer trips early in the year. Some have repeat customers every year. Yes...like how far in advance. I just would like an opportunity to use my place in the peak season and don't want to have to book 3 months out. 57 minutes ago, Behindenemylines said: I have and had lots of rentals. I own student housing and high end rentals. either way it’s not for the timid. you need to ensure you keep liquidity within easy reach because things can go south fast. don’t ever lever one against the other just to buy more. I know more guys that lost it all doing this Air BnB is drying up with lots of competition so be honest about your ability to rent at certain rates it’s all about your long term goals. personally I’m selling all of my real estate holdings right now and going cash until I can find the best property for an exchange -which we may have if your not close to the properties it gets infinitely harder as your future interests and priorities change. Good luck! It might be better to go through a Short Term Rental Management company locally as opposed to an AirBNB? Quote
Augie Posted March 28, 2023 Posted March 28, 2023 2 minutes ago, Royale with Cheese said: Yes...like how far in advance. I just would like an opportunity to use my place in the peak season and don't want to have to book 3 months out. You can tell the rental company what days/weeks you want to block out. You get first dibs, unless you buy a place subject to leases already in place. Then? You just get to keep the rental income. That’s okay too! (Deposits can be negotiated.) Quote
Behindenemylines Posted March 28, 2023 Posted March 28, 2023 6 hours ago, Royale with Cheese said: Yes...like how far in advance. I just would like an opportunity to use my place in the peak season and don't want to have to book 3 months out. It might be better to go through a Short Term Rental Management company locally as opposed to an AirBNB? Most likely if the math works on the $. Double check restrictions on short term rentals, but gold resort areas where there are big tournaments can be great rentals. My home town as an example is a summer tourist town and they just passed regulations in short green rentals. Basically ends up you can only short term up to 6 Months a year then the unit must be owner occupied or vacant. There will be legal challenges im sure but makes sense for tax paying neighbors. again if the math works and you can avoid major headaches with a rental co. Real estate can be great. Just don’t ever run it to the wire where if it had to sit vacant for 6-8 months you’d default and the best advice I ever got was wait for the right tenant-a bad one now will always cost you more than a good one a few months later Quote
Royale with Cheese Posted March 28, 2023 Author Posted March 28, 2023 (edited) 3 hours ago, Behindenemylines said: Most likely if the math works on the $. Double check restrictions on short term rentals, but gold resort areas where there are big tournaments can be great rentals. My home town as an example is a summer tourist town and they just passed regulations in short green rentals. Basically ends up you can only short term up to 6 Months a year then the unit must be owner occupied or vacant. There will be legal challenges im sure but makes sense for tax paying neighbors. again if the math works and you can avoid major headaches with a rental co. Real estate can be great. Just don’t ever run it to the wire where if it had to sit vacant for 6-8 months you’d default and the best advice I ever got was wait for the right tenant-a bad one now will always cost you more than a good one a few months later That's my biggest concern....is restrictions coming up where I couldn't rent it. It happened to someone I knew in Arizona. He was just going to keep leasing his house after he moved because it was during the housing crash in 2009. But after 6 months, new HOA Management would not allow renters. He lost so much money when he had to sell it. What's motivating me is getting a place where you don't have to worry about it being vacant for long periods of time. Florida gets I believe 40 million tourists a year and South Carolina gets about 30 million. I have a friend that owns a condo in Daytona for the last 20+ years and it has stayed rented. I have a great tenant now and its still stressing me out. I can't imagine how I would feel about a bad tenant. But I'm willing to deal with more stress if it's more lucrative and have a management company run everything to handle the stress. I might be wrong in thinking as well. Since I should be able to put a large down payment down, it seems I should make money quicker. I put a 12% down payment on my condo and I'm making $263 a month. If I pay cash for my beach condo, I would just have an HOA payment, taxes and the management fee. HOA are a lot by the beach and expect to pay about $800-$1,000 a month. With the rent I could bring in, it seems like it's pretty safe. But of course, I could be looking at this wrong. Edited March 28, 2023 by Royale with Cheese Quote
billsfanmiamioh Posted March 28, 2023 Posted March 28, 2023 Another thing that popped into my head is to become familiarized with tax implications. Personal use is restricted to 14 days per year in the eyes of the IRS. If you exceed that limit, the IRS considers the property a second home and you lose the ability to deduct many expenses. There is a work around where “maintenance days” do not count against the 14 days, but you better have some detailed documentation of the “work” each time you do that in case of an audit. Quote
Behindenemylines Posted March 28, 2023 Posted March 28, 2023 2 hours ago, Royale with Cheese said: That's my biggest concern....is restrictions coming up where I couldn't rent it. It happened to someone I knew in Arizona. He was just going to keep leasing his house after he moved because it was during the housing crash in 2009. But after 6 months, new HOA Management would not allow renters. He lost so much money when he had to sell it. What's motivating me is getting a place where you don't have to worry about it being vacant for long periods of time. Florida gets I believe 40 million tourists a year and South Carolina gets about 30 million. I have a friend that owns a condo in Daytona for the last 20+ years and it has stayed rented. I have a great tenant now and its still stressing me out. I can't imagine how I would feel about a bad tenant. But I'm willing to deal with more stress if it's more lucrative and have a management company run everything to handle the stress. I might be wrong in thinking as well. Since I should be able to put a large down payment down, it seems I should make money quicker. I put a 12% down payment on my condo and I'm making $263 a month. If I pay cash for my beach condo, I would just have an HOA payment, taxes and the management fee. HOA are a lot by the beach and expect to pay about $800-$1,000 a month. With the rent I could bring in, it seems like it's pretty safe. But of course, I could be looking at this wrong. For 263 a month profit I wouldn’t do that deal. A fridge goes down and it’s three months profit. not sure if I’m understanding your numbers though Quote
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