I am looking into STR in OBX, what my research shows so far is you get around 10% of house value gross rents annually. So if I buy for $500K, $50K in annual rents.
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
5y
All this is subjective. You can run numbers all day long but they will never be more than a guess.
People have cheaper house that make more than a more expensive house. It comes down to location, expensive you can provide, draws to the area, etc. You can't predict wild fires or pandemics either.
If you hire a PM, the fee alone will be more than 20%. Maintenance is at least 5%, but you should budget 10% to be safe. You are also missing property tax and utilities in your math. Electricity in the summer can easily go up to $500 a month. Plus at least $100 monthly for internet. You also have no reserve for big ticket items like roof and ac and etc. These expenses will wipe out your remaining $13k.
I think the realistic estimate is that you will get net 0 cash flow, but in 30 years you will get a house on the beach fully paid for (and will be worth probably $2M in 30 years), plus free vacation every year in this property.