Outer Banks North Carolina

[Greg Dickerson]

Who has a question about investing, owning and or building on the Outer Banks? 

I lived there from 1997-2011 and was one of the largest builders in the area. I have built and developed hundreds of homes and done over $200 million in total building and real estate transactions over the years. I still build houses there today and have owned lots of rentals over the years. I know the area intimately. I am a North Carolina General Contractor and a North Carolina Real Estate Broker as well. I would be happy to discuss and answer any questions. 

[Greg Dickerson]

@Courtney Johnson sorry I am not familiar with that area at all. It’s a ways south of the OBX. You can probably find some real estate companies there to reach out to.

[Herman Hall]

@Jason Hathcock, In today's housing  market, I don't think much is cash-flowing at all from the weekly rental perspective. From what I understand, even a fully rented summer vacation 3/2 beach box is negative cash flow after property management, debt service and expenses. The expenses are brutal as the houses take a beating in the weekly rental programs and renters expect a lot and want to pay little. I would wait for a correction to buy something to have a better chance at cash flow. 

[William Kimble]

I am a newbie here to posting on the forum.  My wife and I are looking to buy our first investment property.  I live on the Outer Banks (Roanoke Island).  We have been studying hard for the past six months and now it's time to get in the game.  Most of the studying I have done has only been about long-term rentals.  We would like to house hack first to get our feet wet.  We are still looking for duplex or triplex in a desirable neighborhood (they are rare, but we still keep looking).  Anyway, a large amount of Outer Banks residents have seasonal employment and lower wages.  There is definitely a housing crisis for the working population.  Even if they do find housing, there is only so much they can afford in rent.  My wife and I are also looking into purchasing a short-term rental.  It seems to the way to go here (that is why there is a limited number of yearly rentals).  I have enjoyed the thread, and thanks for sharing your knowledge!

[Greg Dickerson]

Originally posted by @William Kimble:

There are lots of options on the OBX for rentals and yes there is a huge demand for year round. I sent a PM if you would like to discuss further.

[Chris HartNova]

@Greg Dickerson Thank you for this post.  I have been researching the area for about a year now.  Just about ready to get into the market.  I am considering the following areas - Rodanthe, Salvo, Avon.  What are your thoughts on those areas?  Found a property in Avon that I am interested in.  It is a 3/2 on the Oceanside.  Price per sq. ft. seems a bit high making it somewhat difficult to make the financials work.  Is there an average house size, number of bedrooms and price per sq ft that seems to work out best?  

I would also consider purchasing something as a long term rental or possible a double if they are available.  Have not seen many of them in the area but I might be looking in the wrong place.  

Any chance I could PM you or we could talk on the phone sometime?

Thanks again for sharing.  Really enjoyed this thread.

[Greg Dickerson]

Originally posted by @Chris HartNova:

@Greg Dickerson Thank you for this post.  I have been researching the area for about a year now.  Just about ready to get into the market.  I am considering the following areas - Rodanthe, Salvo, Avon.  What are your thoughts on those areas?  Found a property in Avon that I am interested in.  It is a 3/2 on the Oceanside.  Price per sq. ft. seems a bit high making it somewhat difficult to make the financials work.  Is there an average house size, number of bedrooms and price per sq ft that seems to work out best?  

I would also consider purchasing something as a long term rental or possible a double if they are available.  Have not seen many of them in the area but I might be looking in the wrong place.  

Any chance I could PM you or we could talk on the phone sometime?

Thanks again for sharing.  Really enjoyed this thread.

 I will shoot you a PM to discuss. There are lots of variables and no consistency in terms of type of house or sqft prices. That doesn’t really work or apply on the OBX as location and type of house, amenities and rental income make a huge difference on prices.

[Chris HartNova]

@Greg Dickerson - Thank you for the quick reply.  I will respond to your PM shortly.  

[Greg Dickerson]

Originally posted by @Herman Hall:

@Jason Hathcock, In today's housing  market, I don't think much is cash-flowing at all from the weekly rental perspective. From what I understand, even a fully rented summer vacation 3/2 beach box is negative cash flow after property management, debt service and expenses. The expenses are brutal as the houses take a beating in the weekly rental programs and renters expect a lot and want to pay little. I would wait for a correction to buy something to have a better chance at cash flow. 

 The smaller houses are actually doing very well if they are updated, decorated well and in the right location. Especially on AirBnB. The big houses are the ones that take a beating. I have owned a bunch of giant oceanfront and semi ocean fronts. They can do really well with today’s interest rates if you buy right.

[Andrew Hartigan]

This is a great thread.  My family just got back from spending thanksgiving up in Rodanthe.  That new bypass bridge they are building is going to hurt the view of a few of the houses (like the one we stayed at that are on the sound).  Anyways, we are about dead set on moving to buxton area (schools).  We enjoy traveling when the kids are out of school and I was considering purchasing a vacation rental type house with water views as our main house but then renting it out during summer months while kids are not in school.  Any issues with this?  Those months demand the highest rents and have most occupancy so it would seem we could offset some of our housing costs and then maybe in 2 years purchase another and make the original full time rental if it works.  Main issue would be if we needed different type of insurance, loan issues if renting out short term, storage of our things while renting etc.  Any feedback on this would be greatly appreciated.  

[Greg Dickerson]

Originally posted by @Andrew Hartigan:

This is a great thread.  My family just got back from spending thanksgiving up in Rodanthe.  That new bypass bridge they are building is going to hurt the view of a few of the houses (like the one we stayed at that are on the sound).  Anyways, we are about dead set on moving to buxton area (schools).  We enjoy traveling when the kids are out of school and I was considering purchasing a vacation rental type house with water views as our main house but then renting it out during summer months while kids are not in school.  Any issues with this?  Those months demand the highest rents and have most occupancy so it would seem we could offset some of our housing costs and then maybe in 2 years purchase another and make the original full time rental if it works.  Main issue would be if we needed different type of insurance, loan issues if renting out short term, storage of our things while renting etc.  Any feedback on this would be greatly appreciated.  

You can definitely rent the house during the summer as that is peak season. Insurance is not an issue just a cost you need factor in. You can get the same mortgage as any other house so no issues there either.

[Stephen Ray]

Is anyone cash flowing on and OBX property? I'd love to get something to rent during the summer months and be able to use in the off season but can't seem to make the #'s work. I would be managing myself. Even some places that look like I can build a bit of equity in with some renovations don't cash flow. Maybe better chances further north in Kill Devil Hills/ Nags Head?

[Greg Dickerson]

Originally posted by @Stephen Ray:

Is anyone cash flowing on and OBX property? I'd love to get something to rent during the summer months and be able to use in the off season but can't seem to make the #'s work. I would be managing myself. Even some places that look like I can build a bit of equity in with some renovations don't cash flow. Maybe better chances further north in Kill Devil Hills/ Nags Head?

Yes some people are doing very well with certain properties in the right area especially with AirBnB feel free to shoot me an email if you would like to discuss 

[Mike Shemp]

@Stephen Ray - It is possible to cash flow, but going to take some research and careful buying.  We are looking for our 2nd property out there.  Please feel free to message me with any questions.

[Greg Dickerson]

Originally posted by @Mike Shemp:

@Stephen Ray - It is possible to cash flow, but going to take some research and careful buying.  We are looking for our 2nd property out there.  Please feel free to message me with any questions.

I have been developing on the OBX since 1997. Interest rates are unreal right now and are creating the opportunities for cashflow but you do need the right property. People are doing really well with AirBnB and New construction is a great way to go especially with oceanfront. Keep in mind expenses are going to run 40% of gross income if you are using a management company. 

[Andrew Hartigan]

What is a conservative timeline on new construction in outer banks?  

[Greg Dickerson]

Originally posted by @Andrew Hartigan:

What is a conservative timeline on new construction in outer banks?  

It depends on what you build. Smaller houses 4 months larger up to a year or more. 

[Jason Riddick]

Originally posted by @Stephen Ray:

Is anyone cash flowing on and OBX property? I'd love to get something to rent during the summer months and be able to use in the off season but can't seem to make the #'s work. I would be managing myself. Even some places that look like I can build a bit of equity in with some renovations don't cash flow. Maybe better chances further north in Kill Devil Hills/ Nags Head?

the people (at least locals I know) are doing great with AirBnB. the hands off management companies take so much of the pie that they are very hard to cashflow with from what I can tell. 

[Brad Johnson]

Hi @Greg Dickerson - thanks for doing a thread like this! I've been renting a few SFH in the Raleigh area for about 5 years now and am looking to buying a beach house as a rental property (that we can use a week or 2 per year). The problem I'm facing is determining what houses will rent for on airnbn/vrbo etc? I have tried airdna's calculator but find it hard to trust. Would you recommend I just find realtors who specialize in selling beach rentals? Do you have any recommendations? I have been all over the coast and really love all the areas, so ROI is really the most important thing, regardless of location.

[Greg Dickerson]

Originally posted by @Brad Johnson:

Hi @Greg Dickerson - thanks for doing a thread like this! I've been renting a few SFH in the Raleigh area for about 5 years now and am looking to buying a beach house as a rental property (that we can use a week or 2 per year). The problem I'm facing is determining what houses will rent for on airnbn/vrbo etc? I have tried airdna's calculator but find it hard to trust. Would you recommend I just find realtors who specialize in selling beach rentals? Do you have any recommendations? I have been all over the coast and really love all the areas, so ROI is really the most important thing, regardless of location.

Brad - Reach out to Jeff Scott at  https://scottrealtyobx.com he's a good friend and a top Realtor on the OBX. You can tell him I sent you.

[Brad Johnson]

Thanks @Greg Dickerson I’ll do just that

[Jonathan Scheeler]

Thinking of adding STR/vacation rental to our starting portfolio. We have the capital to invest at the moment but WAG'n these numbers is posing to be difficult. Anybody have any insight on estimated costs per sq ft for electrical, water, etc? Buy in the populated areas, or a larger home on the ocean away from the populated areas (Kitty Hawk vs Duck)?

[Kim Philips]

There is a lot of desire for renters renting in homes near or on the beach. What about condos and those that are on the sound-front? I am interested in a condo in Nags hear near Jennetts pier, but ready to buy yet. Any advice is appreciated 

[Glenna Wood]

Originally posted by @Jonathan Scheeler:

Thinking of adding STR/vacation rental to our starting portfolio. We have the capital to invest at the moment but WAG'n these numbers is posing to be difficult. Anybody have any insight on estimated costs per sq ft for electrical, water, etc? Buy in the populated areas, or a larger home on the ocean away from the populated areas (Kitty Hawk vs Duck)?

Cost by SQ ft may be hard to find. Comparing by bedroom may be easier to dig up. It's the number if people that drive the showers, laundry, cooking, etc. For an example, I have a 3/2 in Kitty Hawk. The electric bill goes from $50/mon (winterized, heat on) to $300/month when guests are present. Water from $70/quarter to $180. When I added a pool and hot tub to my Nags Head house, it upped the electric about $100/mon in season (doubled the rent so well worth it).  So add the amenity operating cost in with # of people in your estimate. My 4/2 in Nags Head seemed to add another $80/Mon for that 4th bedroom over the KH house. Water double overall vs Kitty Hawk since the cleaners empty hot tubs after every rental. 

There are renters for both markets. The numbers on any individual property would drive my decision. The number one rule is as close to the beach and you can afford. I would go smaller by the beach vs larger a couple blocks off. My general impression is that rents are better on the upper banks than lower. Also the lower banks are evacuated more often with bad weather. But good rentals can be found all over. If I were buying now my sweet spot house is 5 BR. Big enough for two siblings + kids + grandparents. More rent per BR to cover the  cost of your basic house systems. At 6+ BR you start needing bigger game room space, double up appliances or second kitchens, etc. Also up your maintenance costs. In 15 years I've never had a heat pump last more than 8 years. The salt and wind are brutal.

I do not buy condos for rentals in any market as I do not want decisions about my property to be made by a committee. The HOA fees are a sunk cost and compared to a SFH, the insurance seems higher. OBX is renter friendly so I believe there is less risk than other areas for HOAs deciding to kick out STRs in the future.

The REMAX Surfside office has an awesome website for researching OBX properties. 

[Kim Philips]

Originally posted by @Glenna Wood:

Originally posted by @Jonathan Scheeler:

Thinking of adding STR/vacation rental to our starting portfolio. We have the capital to invest at the moment but WAG'n these numbers is posing to be difficult. Anybody have any insight on estimated costs per sq ft for electrical, water, etc? Buy in the populated areas, or a larger home on the ocean away from the populated areas (Kitty Hawk vs Duck)?

Cost by SQ ft may be hard to find. Comparing by bedroom may be easier to dig up. It's the number if people that drive the showers, laundry, cooking, etc. For an example, I have a 3/2 in Kitty Hawk. The electric bill goes from $50/mon (winterized, heat on) to $300/month when guests are present. Water from $70/quarter to $180. When I added a pool and hot tub to my Nags Head house, it upped the electric about $100/mon in season (doubled the rent so well worth it).  So add the amenity operating cost in with # of people in your estimate. My 4/2 in Nags Head seemed to add another $80/Mon for that 4th bedroom over the KH house. Water double overall vs Kitty Hawk since the cleaners empty hot tubs after every rental. 

There are renters for both markets. The numbers on any individual property would drive my decision. The number one rule is as close to the beach and you can afford. I would go smaller by the beach vs larger a couple blocks off. My general impression is that rents are better on the upper banks than lower. Also the lower banks are evacuated more often with bad weather. But good rentals can be found all over. If I were buying now my sweet spot house is 5 BR. Big enough for two siblings + kids + grandparents. More rent per BR to cover the  cost of your basic house systems. At 6+ BR you start needing bigger game room space, double up appliances or second kitchens, etc. Also up your maintenance costs. In 15 years I've never had a heat pump last more than 8 years. The salt and wind are brutal.

I do not buy condos for rentals in any market as I do not want decisions about my property to be made by a committee. The HOA fees are a sunk cost and compared to a SFH, the insurance seems higher. OBX is renter friendly so I believe there is less risk than other areas for HOAs deciding to kick out STRs in the future.

The REMAX Surfside office has an awesome website for researching OBX properties. 

Thank you Glenna, that was very helpful. I understand that you say the Northern part of OBX is better but what about the new bridge that is being built to help with the issues you mentioned.  It is a jug handle from pea island to Rodanthe. I was looking in Hatteras, but am fearful of the issues you mentioned as well. Who do you use to manage your property in OBX and have you consider switching from short term to long term renting? Thanks for your help

[Jonathan Scheeler]

Originally posted by @Glenna Wood:

Originally posted by @Jonathan Scheeler:

Thinking of adding STR/vacation rental to our starting portfolio. We have the capital to invest at the moment but WAG'n these numbers is posing to be difficult. Anybody have any insight on estimated costs per sq ft for electrical, water, etc? Buy in the populated areas, or a larger home on the ocean away from the populated areas (Kitty Hawk vs Duck)?

Cost by SQ ft may be hard to find. Comparing by bedroom may be easier to dig up. It's the number if people that drive the showers, laundry, cooking, etc. For an example, I have a 3/2 in Kitty Hawk. The electric bill goes from $50/mon (winterized, heat on) to $300/month when guests are present. Water from $70/quarter to $180. When I added a pool and hot tub to my Nags Head house, it upped the electric about $100/mon in season (doubled the rent so well worth it).  So add the amenity operating cost in with # of people in your estimate. My 4/2 in Nags Head seemed to add another $80/Mon for that 4th bedroom over the KH house. Water double overall vs Kitty Hawk since the cleaners empty hot tubs after every rental. 

There are renters for both markets. The numbers on any individual property would drive my decision. The number one rule is as close to the beach and you can afford. I would go smaller by the beach vs larger a couple blocks off. My general impression is that rents are better on the upper banks than lower. Also the lower banks are evacuated more often with bad weather. But good rentals can be found all over. If I were buying now my sweet spot house is 5 BR. Big enough for two siblings + kids + grandparents. More rent per BR to cover the  cost of your basic house systems. At 6+ BR you start needing bigger game room space, double up appliances or second kitchens, etc. Also up your maintenance costs. In 15 years I've never had a heat pump last more than 8 years. The salt and wind are brutal.

I do not buy condos for rentals in any market as I do not want decisions about my property to be made by a committee. The HOA fees are a sunk cost and compared to a SFH, the insurance seems higher. OBX is renter friendly so I believe there is less risk than other areas for HOAs deciding to kick out STRs in the future.

The REMAX Surfside office has an awesome website for researching OBX properties. 

Thanks Glenda!!!!  Very helpful!