I'm curious, in this market, are there any investment opportunities along 30-A that would at least break even in a rental scenario? I recall the days when people let vacation renters buy their condos/homes for them and even made money. But during the craze I heard investors comment that appreciation was the new game, which obviously hasn't worked out. Can you actually buy a condo, townhome or beach home at today's prices that would break even with rental demand offset by expenses? If so, what properties fall into that category -- gulf-front condos, condos/townhomes/homes in planned communities with deeded access and amenities, private beach homes?
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Any investment scenarios that make sense?
- Thread starter Beachgirl
- Start date
SHELLY
SoWal Insider
At the current prices, with falling values, and with increasing costs, I'd say no.
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SHELLY
SoWal Insider
I think anyone can "make it happen" on paper...but there are a bunch of folks on here, even those who've bought before the frenzy, find that with the increasing costs and increased competition--it just ain't so.
The only way I can imagine it working would be for someone to purchase a multiple dwelling (say 8 units)in good shape at a foreclosure price and renting out the units to full-time service workers. Vacation/full time rental condos or single units are not going to break even at these prices.
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Kurt
Admin
I am seeing condos at 50% off the peak. I suppose it depends on your loan. Remember substantial downpayments?
30ashopper
SoWal Insider
Breaking even is possible I think. Big returns don't look too plausible. I came into this hoping a return of 10% or more was possible on a $500,000.00 vacation rental house, but so far I'm just not seeing it. Long term rentals on single family homes in nice communities like Sandestin look more promising. The big problem with vacation rentals here I think is the short rental season - I see a lot of property sitting idle for months in looking at some of the management company's web sites.
SHELLY
SoWal Insider
Problem is at the "peak" these properties were 100% overpriced.
With substantial down payments you've gotta include the missed opportunity costs of the money you put down. That $20,000 one puts down on a property is taken away from some other investment opportunity...add to that the fact that's it is being invested in a depreciating asset and it can be lost altogether in the coming months.
The trick to making money on real estate is to use none of your own money; buy into an underpriced market that is on a tear; and having the wherewithal to take your profits off the table....we all know that boat has sailed. That being said--the way to really lose money in real estate is to do the opposite.
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AAbsolute
Banned
Check out the Watersound West Beach VRBO
I know I've talked about it many times before, but I think you should look at the Watersound West Beach house that is VRBO on the pool. JOE gave us a great deal on the lot with approved plans and Beach Club Membership. We built and sold the house quick with numerous buyers in line. We sold it to a second home party who has it booked solid through VRBO. Check their rates and bookings and compare it to our sales price of 750,000.
That's 1 transaction that I think is real worthwhile and even in the down market Bank of America has the appraisal at a little over 900,000. I don't think I'm breaking confidence as this is all information in the public domain.
I know I've talked about it many times before, but I think you should look at the Watersound West Beach house that is VRBO on the pool. JOE gave us a great deal on the lot with approved plans and Beach Club Membership. We built and sold the house quick with numerous buyers in line. We sold it to a second home party who has it booked solid through VRBO. Check their rates and bookings and compare it to our sales price of 750,000.
That's 1 transaction that I think is real worthwhile and even in the down market Bank of America has the appraisal at a little over 900,000. I don't think I'm breaking confidence as this is all information in the public domain.
TooFarTampa
SoWal Insider
I think the only ones who should be buying into the market are folks who love the area and want to reserve their piece of the beach. This is not a suburban Dallas rental house -- cash flow is not the main reason to buy here. I have learned firsthand that even a decent rental season results in very little after all is factored in. Increased supply has actually driven many rates down. It is what it is.
If you really want to buy, then buy! Don't invest, be an end user. If you don't want it bad enough, then buy a suburban Dallas rental house and become a landlord.
If investments here (in the Internet age where everybody knows everything about everything) were cash flow positive, EVERYBODY WOULD BE BUYING HERE! If everyone wanted to buy here, then prices would go up. Prices are always going to be high for precious coastal real estate.
We have our piece of the beach and are very happy about it.
Some people value different things. Those people should not buy. 
And hey, if the only people who buy are end users, values are bound to go up, because no one will want to sell!