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Updated over 4 years ago on . Most recent reply
How much of a Covid discount would you need to purchase now?
I invest in a county that has a limited number of permitted vacation rentals - these properties trade at a premium and only make sense to purchase if you are going to run it full-time as a vacation rental so you aren't competing against "regular" buyers who may use it as a second home or only rent part-time.
I had a broker bring me an off-market deal this week and I struggled with what to offer given all the uncertainty regarding Covid. I ran the numbers assuming pre-Covid performance and came up with what I would have offered on the property in February, but obviously some discount to that price is needed now.
If you are making an offer on a vacation/STR rental today, how much lower would your offer price be than on the exact same property in a world where Covid didn't exist?
Dan
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I am placing two offers in PCB Monday. I used a Comp set of sales since January 2020. There was no appreciable drop in prices...even in March after everything had pretty much shut down. My starting offers are 10% below avg price per square foot for the comps just because I like to know I got a good deal and not because of the corona virus.