Destin, FL Vacation Rental: worth it?

[Leah Simmons]

Hi all,

We are fairly new to the real estate investing market. We recently sold 8 units and are looking to reinvest our proceeds (we have already screwed up our 1031 exchange, lesson learned). We have friends who have several units in Destin, one of which is a 2 bedroom/2 bath gulf view unit they claim to have grossed nearly 60k in annual rent last year, their purchase price was mid 300s, per their claims they profited nearly 30k for the year after accounting for their loan payment, HOA fees, taxes, and insurance. Their other units gross around 45k which I feel is pretty reasonable for a good unit and seems to be where the average lies. Is it reasonable to think we can turn a profit on a vacation rental? We would be managing ourselves to save the 25% management fees. We are looking for a 2 bedroom/2 bathroom in the 300-400k range and we'd be financing. If we can't realize at least a $800-1000/month profit after expenses (not getting into depreciation and things like that, just strictly gross rent - loan payment, taxes, insurance, maintenance+cleaning), I feel like we might be better suited to take our cash and purchase several more rental houses locally which would get us about $200-300/month profit each after all expenses. Any opinions?