First STR ... Outer Banks vs Wilmington/Southport

[Sarah Hylander]

After a few years of dreaming, we are ready to purchase our first STR.

Strongly considering these two areas .... 

Outer Banks (Nags Head, Kill Devil Hills, Kitty Hawk) 

or 

Wilmington/Southport (Carolina Beach, Oak Island, Surf City)  

Would love to hear your thoughts on the areas, experience as an owner, pitfalls, potential, etc ... Lay it on me! 

Goal: 

Family beach house, but would love positive (or near positive) cash flow. Hoping for good appreciation too :) 

Budget 500K, 3 Bedrooms ... 20% Down / Finance 80% 

https://www.realtor.com/realestateandhomes-detail/4328-W-Barracuda-Dr_Nags-Head_NC_27959_M62648-39263

https://www.zillow.com/homedet...

https://www.zillow.com/homedet...

[Mike Shemp]

@Sarah Hylander

We have a short term rental in Kitty Hawk.  Here are my thoughts along with "What I wished I knew before I bought in the Outer Banks".

1.  The "off season" seems to be getting less "off which each year.  November to January are slower, but we still get plenty of bookings and seem to get more each year.  May through September are the high demand months.

2. It feels like a more mature STR market. Homes have been rented there for a long time, there are local county taxes that get collected on the STR revenue, etc. so hopefully that means less regulation since its well established. I did hear Nags Head wanted to have some regulations, but not sure where that went.

3.  Maintenance is much higher.  Being anywhere near salt water means things wear out faster.  

4.  The local government prevented non-resident owners from getting to their own houses when Covid first happened.  It is my understanding that some of the owners won their lawsuit against the county to prevent that from happening again, but something to note.

5.  Some areas prone to flooding during storms.  Less of a problem if the property is elevated on pilings.  You may want to drive around the area you are interested in when its raining really hard to get a sense if the property/immediate area has an issue.

6. Hurricanes area so you have higher insurance premiums, plus potential loss of income if roads are damaged.  For this reason we pay for income loss with our insuranc plan in case we are down a month due to a storm.

7.  I think smaller homes have a better chance of year round bookings.  Larger homes have a better chance of higher nightly rates and revenue during peak months.  The reason being that groups of 10-20 people usually aren't getting together as often in the shoulder/off-season to go to the beach.

Hope that helps!
Mike