Best investment for vacation rental..Florida/SC/other location??

[Fred Buechel]

We are new to the RE investment world, just trying to decide how we want to get this thing moving. We are looking to purchase a vacation rental in Florida, Hilton Head Island, or Myrtle Beach. We would like to keep the pp in the $200,000 range or cheaper. I know the market is saturated with these STR's, but it seems like a better option right now than buying multiple local SFH's for what seems to be top market value, and not seeing a significant enough cash flow or chance of appreciation. We're in SE Michigan, and most of the homes I would consider purchasing as investment homes are currently at their max value. Not a lot of good flip possibilites around here right now either. I don't wanna buy a $30,000 house for $50,000, and that's where we're at right now in this Metro Detroit market. The margins are just not good enough right now.

That being said, we've decided we may want to go the vacation rental route instead, and at least have a nice place to show for it, with hopefully reasonable ROI. We love SW Florida, especially Sanibel Island. However, you cannot get anything on the island for less than $400,000, and that's a 1 bed/1bath condo at 500 SF. It is oceanfront. I know the oceanfront resorts (Sundial is our favorite) do have solid returns, so it may be worth the extra money we would shell out. If we decided that was the best place to invest, we could pull it off with a history of strong returns. The other options we considered were other oceanfront properties in Florida (Vero Beach, Cocoa Beach, Clearwater Beach, Destin, etc), or oceanfront on Hilton Head or Mrytle Beach, SC. The prices in the areas other than Sanibel are way cheaper for oceanfront condos. Just not sure about the weather year around, as we know it's beautiful all year in Sanibel.

If anyone has any advice, tips, other locations to consider, or any other information on investing in a STR in any of these areas, please feel free to respond.

Thanks