Looking to purchase my first AirBNB in Panama City Beach!

[Adam Rose]

Hello Everyone,

I'm looking for a bit of guidance. I'm interested in purchasing my first AirBNB property, and have found a place I think I would love to invest, Panama City Beach! I've visited the area a few times, and it seems that they are trying to distance themselves from their prior party roots. I'd really like to purchase a beachfront condo, rather than housing elsewhere in the city. My question is threefold. First, what condo resorts would you recommend looking for properties? I've heard from locals that Treasure Island, Emerald beach are good places to look. I also have a friend who has a condo at Edgewater that I really liked. Secondly, for any resorts that are preferential, what makes them stand apart from the others (better HOAs, no special assessments, higher occupancy, cheaper HOA cost to amenities provided etc). Finally, I'm interested in beachfront as that's where I would like to stay when I visit, but I would be open to hear about other ideas that have better ROI if there any.

Thanks,

Adam Rose

[Villy Ellinger]

@Adam Rose you are getting some really great, if diverse and therefore somewhat confusing opinions, lol. Either way, it's good info and hopefully helpful. One of the best things about Bigger Pockets is that you will get these diverse opinions that will allow you to make an educated decision. See my two cents below:

1) Most of us commenting here on your post are real estate agents (myself included). What that means is that (probably) most of us are very familiar with the market, the various complexes and how they will perform potentially. That said, most of us can't quite disassociate with the idea that you might be a potential client for one of us. So, I would suggest, read everything with that in mind. I will try to pretend like I'm not an agent and will give you my most honest opinion as an investor.

2) Whether you consider condos or not will depend on not only your budget and financing options (most ARE non-warrantable) but also on how you plan to manage the property. Will you self-manage or will you use a full-service management company? Will you use mostly Airbnb or mostly VRBO or your own direct site? The reason these things matter is that some complexes like Edgewater, Shores of Panama, Tidewater and others will make it EXTREMELY difficult for someone who is self-managing. It's doable, but it's hard. Trust me, lol. There are a handful of management companies that have monopolized most of the large complexes and being the small newcomer is hard. Try getting parking for your cleaning people at Tidewater in the middle of the summer season, lol. 

3) If you MUST do a condo (for example because you definitely want to have a direct beach view), then I would look on the WEST side, closer to 30A and away from Edgewater and Shores of Panama (legal issues here in addition to THIS WILL NOT CASH FLOW unless you are some sort of magician :-)). I like EMERALD ISLE (Different from Emerald Beach. Emerald Beach is the definition of condotel and cashflow there will be super hard. Nice place to stay on vacation, but not my pick for investment. I like Splash (if you must) and Aqua (more expensive). I don't like any condos down Thomas Dr. I really like ENDLESS SUMMER toward the west end. No beach views here, but if you want to use Airbnb rather than a mgmt company charging 25%+, this is a great option and it can cashflow. If you gotta go closer to the center and be in a beachfront condo, I like Ocean Reef. You will probably need to remodel some in order to get your rental $$ to where they need to be. But buying something completely remodeled there will be paying unnecessary premium. You could potential self-manage at Majestic Beach Tower, but it's an average pick of mine. As for Calypso.... if someone invites you to stay at their condo there, definitely go. You will enjoy it. Newer (if gaudy) nice complex with great amenities. If you are buying... this is super expensive per sq ft and will NOT cashflow. Also, keep in mind that Calypso III (the newest one) is NOT on the beach and even if some of the higher floors currently have some sort of sideways beach view, that will soon go away as active construction is going on directly in front on that view (which also overlooks the busy street, the mall side streets, and a bunch of parking).

4) I'm going to go with @Ricardo Hidalgo on several points here. Cashflow right now is tight, so condos are hard to squeeze for cash unless you get a super deal and then you self-manage the heck of it. If you are buying with a long-term view in mind and absolutely would like to be on the beach, than you may need to prepare for a few years of near break-even or even losses with beachfront condos (again depends on revenue and mgmt fees). If you can buy and remodel that would help you negotiate a better price of a "less updated/desirable unit" in your selected location, so potentially will get you increased value in the future. If you buy turnkey at today's prices that will be harder. I also REALLY LIKE townhouse in PCB. There are many, they finance better, they are easier to resell, they are available in different price ranges, etc. (Just prepare for higher insurance. Still less than the condo HOAs.). Look into Gulf Highlands Resort -- all townhouse and directly across from Majestic Beach Tower, Horizon South complex has some units that are actually townhouses. A number of townhouse options on the west end and in Sunnyside/Laguna/Riviera. If you MUST go to Thomas Dr, then look at the various townhouses there. Again, if you can do some updating rather than looking for "turn key", you will probably get a better deal. 

5) Get a LOCAL lender!!!!

6) The good news is that as the market is right now, you will not need to make all cash offers with $$$ appraisal contingency waivers, etc like you would have in March of this year :-). 

7) Rental projections: these are useful ... to a point. If you buy a unit with brown carpet and yellow walls and rental projections of $40K, chances are that might change if you update the unit and self-manage or use another mgmt company. If you are NOT looking to self-manage, then definitely approach your purchase from that perspective and make sure you buy something that will be in  location where good management is available. I.e. don't buy a house 5 miles away from everything that no manager will want to deal with :-). If you plan on using a certain management company, then use their rental projections. In some complexes you almost have to use certain ones. Picking on Tidewater again, lol. Vacasa manages over 100 units there and has a front desk on the second floor. Imagine a confused guest family who finally make it out of the parking structure, get inside the lobby and are trying to get their magnetized wristbands (you can't open any doors without those at Tidewater). And lo and behold, their management company is not Vacasa or Panhandle Getaways or another big one and they are lost.... and the person at the Vacasa desk gives them "the look", lol. (Sorry, I've shown a bunch at Tidewater, so I have stories, lol.)

I really like PCB as an investment option. I almost bought there this spring (a unit in Endless Summer), but I ended up buying a townhouse on Okaloosa Island (FWB) instead.

Good luck!!!