Condo Short Term Rental

[Kyle Wise]

Hello,

I'm looking for a little insight from the group. I currently reside in Tampa, FL and am in the final stages of closing on my first vacation rental property in Western, NC but now want to focus my sights on a condo in the Treasure Island, Madeira Beach, Indian Shores etc. area. 

My primary goal is to generate solid COCR while using it partially as a vacation spot for my family.

I was curious to see what everyone's experience has been investing in these areas and if there are any recommendations you can provide? 

These are some of the questions I have to generate discussion:  

-What are the returns like for condo hotels compared to unmanaged?

-Views: Ocean vs Intercoastal. Obviously ocean is preferred but are people still doing well with intercoastal views?

-Can anyone recommend certain buildings that perform well over others? 

-What is your top criteria for investing in beach condos? 

-What are potential red flags e.g age of building, assessments, lack of parking, month long rental requirement vs. weekly etc. 

Thanks,

Kyle

[Michael Weigum]

Hi @Kyle Wise

I personally think condos can be a good option for STR. I have 2 in Myrtle beach and they have cashflowed very well. You have to look at all the numbers and know the right buildings to invest in. You definitely do not want to use onsite management. They have a 60/40 split here, and that means you don't make money. I purchased my condos in a building that doesn't have a resort manager onsite. I manage my properties myself and that helps with the cash flow. At first I was a little cautious about the high HOA fee, but when you see what it includes, it makes sense. My HOA includes all the electric, water, cable, internet etc so I just have one bill I pay every month and it is predictable. I bought my properties right after they had an assessment, so I got the benefit of an upgraded building without having to pay the assessment. The biggest sticking factor is the financing on a condotel. Most large banks don't finance them. However, there are other options out there and you can get financing if you know the right people. Condo's typically don't appreciate as well as houses, however, my condo's have doubled in value this last year. Appreciation is a bonus for me with my investments. If it cashflows and appreciates, that is a win win.

Get with an agent who specializes in the area and knows the ins and outs. Give it a try! Having a condo and a SFH would be great, then you can start putting together your own data to see which one performs better. At the end of the day, having an ocean front condo that you and your guests can see and smell the ocean is not a bad option. Good luck!