Vacation Rentals in Ocean Pines/Ocean City MD area.

[Justin Weaver]

My wife and I are currently looking into purchasing a vacation rental in the Ocean Pines/Ocean City MD area. We were wondering if the market for vacation rentals are worth it in this area? Would love to get some insight as this would be our first rental property purchase. Any information would be greatly appreciated.

[Lauren Kormylo]

I've been looking at OC for STRs for about a year and a half. My grandparents had a cottage there from the 50's to the late 80's, so I spent my summers there growing up, and still go on vacation there almost every summer. Up until now, OC was not great for investments - you could use STR to defray your costs for a condo you used, but it wasn't great for pure investments. But since Covid, I see two things that have happened.

One, prices for condos have gone up.  I think it spurred people to buy because they were free to work from wherever they wanted, and they loved the beach.  Two, daily rental prices for larger 3, 4, and up bedroom condos and townhouses especially have gone up this season dramatically, even more than the purchase prices - to the point that now they are profitable as pure rentals, but only if you self-manage, which is easy to do with smart locks and modern technology. I get daily listings from a realtor in OC, and he just did a blog about this very subject, exactly what I have observed.  http://www.myrealestatespot.co...

Now is a great time of the year to go to Airbnb and VRBO and use Luke's "enemy method" to see if you will make money:  https://www.biggerpockets.com/...

Although Airbnb has changed this somewhat, It's traditional for STRs in OC to rent by the week (usually Sat to Sat) during the summer, mid-June to early September. The larger condos will book up completely, because they are in demand - there are not that many rentals that have room for 9+ people.  It's also traditional for guests to bring their own linens and towels, although there are now linen rental services that will deliver and pick up (but won't make up the beds).  So pay attention in the listings to whether they include linens in their price, and things like toilet paper, soap, etc.  A lot don't.

Re Ocean Pines, why do you want to buy there?  You have to drive to the beach, and it's mostly residential, and they've had problems with STRs in the neighborhoods.  The association is adding restrictions there.  https://mdcoastdispatch.com/20...  

I would look in OC, ocean block, or possibly directly on the bay (with a great view) if you run the numbers. Ocean block because people with children don't want to cross the highway on foot carrying all their beach gear.  And they like rentals with a pool.  My own grand kids love to go in the ocean in the morning, and the pool in the afternoon or evening or when the ocean's rough.