All Forum Posts by: Carlos Lopes

I’m currently looking to add to the portfolio by getting a 2/2 beach front property. It’s my first time buying in this area, and I have a decent idea/expectation of what it’s all gonna cost overall to own the property. I’m first going to live in it for a year (so all losses then), but after that year I’ll likely be moving and turning it into a rental. Goal is to refinance (hopefully rates are down in a year), and rinse and repeat. As of right now with today’s numbers and rates, and if I’m right around what Airdna and all the other sites estimate, I’ll be just about breaking even. Maybe a few bucks in the green…MAYBE. Other motives for the property isn’t just investment, but also to be able to have our own beach vacation rental we can go to once we move. So that said, breaking even at first isn’t a HUGE deal for us, as long as it doesn’t suddenly become a liability. 

So my question is more what are YOU guys actually pumping out numbers wise on 2/2 units? Success stories, fail stories, etc. Anyone been lucky and doubled projections from what the rental estimators say? I’ve talked to a couple people that told me theirs have nearly hit 6 figures gross for the year, for units that are in buildings that projected no more than 50-60k. So it clearly all comes down to management and how you market it. What have you seen that has helped your property immensely to stand out from the crowd, outside of your typical “updated” or beach front view with pool cases? (Since beach view and pool is gonna be the case for 99% of the properties here). 

So just curious how replicable those success stories are. 

Curious what everyone here has been averaging on STRs in the Destin/Ft Walton area? 

Some of the profits and losses I’ve been seeing in certain properties have been significantly lower than Airdna projects, with only a handful being in the projection range, and maybe one or two exceeding. 

So what’s been your average annual gross for a 2/2 beachside? 

Quote from @Villy Ellinger:

Quote from @Carlos Lopes:

yea I have noticed the overall STR performance is down for the area, but I'm trying to really see the pros and cons for long term holding. I know there's a lot of expansion happening on okaloosa island, to include the new bridge, and new outlets they're looking to build. So I'm hoping that's a future boost in the economy there. Occupancy rates seem to be ok hovering around 62%, so maybe with some really amazing managing I can expect about the same? I've come to terms that currently I'd probably break even once I move and turn it into a STR, but I would hate for it to be a break even forever. So I'm hoping that after a little while I could refinance again for lower rates and hopefully have more cash flow. It's all really hard to tell as I'm still learning a lot in the process. I'm still going through the learning what questions to ask phase.

1) profits and losses?

2) STR allowed?

3) assessment fees and costs?

4) warrantable?

5) occupancy rates? 

6) comps? 

Currently two units I’m looking at in the same complex, one is a 1 bed and other is a 3 bed. They gross ~51k and ~60k respectively. So I’m trying to figure out if paying the extra 200k for a 3 bed is even worth the investment since annual gross is so close. But those numbers are also all based on people using Vacasa as their manager, which I hear they’re mediocre at best. But at a glance I noticed people average around 10% of total home price as far as annual gross income, so a $500k home is grossing about $50k a year. Is this about what most of you have experienced in the area? If so, how do you break above that?

Overall, I’m loving the learning process and am getting close to a pull the trigger point. Just want to really make sure I’ve asked all the right questions: 

 You're definitely asking the right questions. While no one can predict interest rates with complete certainly, they have already come down from the highs 7-8 months ago. So a re-fi situation will definitely be a good option in the not so far future. I, personally, have a owner-financing loan on a property I recently bought that I plan to refinancing once the rates are lower and to get better cashflow just on that.

You mentioned that you are considering Destin West. Great complex. I used to own Heron 505 (3 bedroom unit on the Bayside). Sold it a couple years ago. The person who bought it used VA financing. I know that Sandpiper and Pelican at Destin West might be harder to do with VA because of how their covenants were structured by the initial builder. Heron and Osprey should be ok for VA. I'm not 100 % sure about Gulfside.

Pluses for Destin West: great amenities, very popular with guests, spacious and updated units, good rental potential.

Some minuses: HOA is pretty high, beach access can be an issue for some guests. Beach facing units and complexes tend to get higher rent, even though the amenities at Destin West are superior. The Bayside units are very nice, but the ones at Gulfside, which is older, can be pretty dated and have odd layouts. Also, with the new beach regulations in Okaloosa County, the beach section where the beach service for Destin West can be set up has been narrowed significantly and the Island Hotel amenities and beach area are no longer available to Destin West guests to use. That makes the beach area tight for the many guests that Destin West can hold as an overall complex.

If you have any further questions, feel free to message me if I can help. There are a number of other complexes on the Island that are also VA approved.

Oh that’s actually great to know you owned in Destin West. You mind me asking why you sold?

I’m currently trying to decide between two 3 bedroom units (one is roof top with gulf views and boat slip, other is ground floor with direct access to pool and big patio) , or a one bedroom in the same building that’s also roof top with gulf views (I believe sandpiper). So I’m playing the game of trying to figure out which one is gonna be the best bang for my buck as far as rentability goes. Would the extra 200k (720k and 540k respectively for the 3 vs 1 units) that the three bedroom costs yield much more in rents in this area? The One BR unit has the typical bunk beds in hallways that you see a lot here as well, so you can sleep multiple guests in it. Or are people typically looking to rent bigger units? 

On this same subject, what’s been your experience when you compare how Destin West performed vs your other properties here? Do you happen to have any that are actual beach side? I looked at a handful of 1 bedrooms on the beach with amazing beach views. Direct beach access, and a little pool; but no lazy River or giant pools, no gyms, etc; just slightly more of a residential vibe. I liked Destin West because I figured the “resort” vibe would be appealing to guests, but I did wonder how unattractive that 5 minute sky bridge walk to the beach would be. What was your overall experience with all that? Would you give up direct access beach views for the Destin West amenities. 

Thank you again for all your help!! I really appreciate the advice. 

yea I have noticed the overall STR performance is down for the area, but I'm trying to really see the pros and cons for long term holding. I know there's a lot of expansion happening on okaloosa island, to include the new bridge, and new outlets they're looking to build. So I'm hoping that's a future boost in the economy there. Occupancy rates seem to be ok hovering around 62%, so maybe with some really amazing managing I can expect about the same? I've come to terms that currently I'd probably break even once I move and turn it into a STR, but I would hate for it to be a break even forever. So I'm hoping that after a little while I could refinance again for lower rates and hopefully have more cash flow. It's all really hard to tell as I'm still learning a lot in the process. I'm still going through the learning what questions to ask phase.

1) profits and losses?

2) STR allowed?

3) assessment fees and costs?

4) warrantable?

5) occupancy rates? 

6) comps? 

Currently two units I’m looking at in the same complex, one is a 1 bed and other is a 3 bed. They gross ~51k and ~60k respectively. So I’m trying to figure out if paying the extra 200k for a 3 bed is even worth the investment since annual gross is so close. But those numbers are also all based on people using Vacasa as their manager, which I hear they’re mediocre at best. But at a glance I noticed people average around 10% of total home price as far as annual gross income, so a $500k home is grossing about $50k a year. Is this about what most of you have experienced in the area? If so, how do you break above that?

Overall, I’m loving the learning process and am getting close to a pull the trigger point. Just want to really make sure I’ve asked all the right questions: 

Quote from @Villy Ellinger:

@Carlos Lopes pretty good plan actually, as long as you are able to use your VA financing. So, yes, you have to make sure that whatever you buy is VA-approved. I'm very partial to Okaloosa Island. My four personal investment STRs are located there. I like that access to the beach is a lot easier than in Destin, Miramar and 30A. Also the location is much closer and more convenient for access to Eglin and Hurlburt. I've actually had a number of military servicemen on TDY here stay at my smaller condos for several months in the off-season. That's another thing you may want to consider as you turn your property into an STR later. Okaloosa Island gets more than just tourist renters.

The northside of Okaloosa Island, starting from Bluefish and going west, does not allow for STRs per the current ordinance. The section east of that does. All of the south side allows it as well. There are not many townhouses on Okaloosa Island that allow STRs, but there are some. I actually own one. No HOA and easier financing than condos. My other three properties are condos, two small ones and one large. If you are looking at condos, those can be a good option too even with the HOA, because of the lower maintenance and with the added amenities like pools, lazy rivers, etc. Those type of things drive rental revenue and attract more guests. The key with condo complexes is to do due diligence on each individual complex as far at whether they are warrantable, VA-approved, and whether they might be facing any upcoming special assessments or have issues with the state-mandated structural integrity studies and their reserves. Special assessment can be a huge financial drain if they come up unforeseen.

You can also consider single family homes or townhouses in town in FWB or Navarre. Those are usually ok for VA financing. Many people are very successful in turning them into STRs. The main issue I see there is the higher maintenance costs, especially if you are no longer local when you turn the property into an STR. Even if you get a full time property manager they will not be able to deal with a roof repair situation or any storm damage without your direct involvement. Just some examples of things that come up with owning a home :-). Also, revenue potential is lower further from the beach.
With a condo a lot of building issues are handled by the HOA, but there can also be more restrictions.

Lot's of option :-).

thank you for the good info. Super helpful. Currently I’ve been looking at Destin West Vacations. Condo complex looks like a huge resort and has a pretty robust lazy river and pool. Properties mostly have bay views, but the condo has a sky bridge that connects to the gulf side for easy pedestrian crossing. Currently waiting for rental profit numbers and waiting on answers about assessments. Really trying to find out the pros and cons. I was told someone got one of their buildings VA approved, so hopefully I can do the same for the adjacent building. 

Quote from @Ricardo Hidalgo:

Quote from @Carlos Lopes:

Looking to buy a property in Fort Walton Beach. I’m in the military, and will be moving again in about 15 months. Currently renting, but was really debating buying a beach front condo in Okaloosa island to live in for the remainder of my time here, but then hoping to rent it out once I leave. 

Does anyone have any experience buying short term rentals in that area? Any recommendations? Just currently exploring what would give me the best bang for my buck. Seems like okaloosa is very busy and lucrative during summer, but kind of a dead town in the winter. 

You may want to know difference between warrantable and non warrantable condos! It will affect your financing. This was the list of non warrantable condos as of last year but could have changed. Townhomes are much easier on financing. 

Destin Harbor Resort West – 09/20/2024

Indian Lake – 01/09/2025

Sandestin/Miramar Beach:

Ariel Dunes – 11/22/2024

Ariel Dunes 2 – 09/05/2024

Crystal Village 1 – 12/31/2024

Heron Walk – 02/27/2025

Points of View Condos – 01/02/2025

Seascape (Phase 2) – 04/16/2025

Fort Walton Beach:

Commodores Landing – 11/19/2024

Emerald Isle Club – 09/11/2024

Indianola On The Water – 05/19/2025

Island Gardens – 03/17/2025

Sea Oats On the Beach – 05/06/2025

Venus Condominium Association – 11/18/2024

Veranda Condominium- 03/25/2025

Ok definitely need to look into this. Didn't know much about it. My MLO did mention places need to be VA approved, so I'm assuming this plays into it?

Quote from @Sarah Kensinger:

Destin is a great market to purchase a property in, and like already mentioned you would do well to live in the place first and then rent out as a STR later on. I highly recommend Allison Freeman as a realtor, and she knows the Destin area as well!

Thanks! Will keep that in mind. What's everyone's thoughts on condo complex where they manage everything for you (all baked into the HOA), vs buying somewhere where I could just Airbnb myself? Seems like most condos only allow STR through their own management for a hefty fee, but the ease of not having to worry about advertising and listing sounds nice.

Quote from @Steven Wachtel:

Honestly I think that's a great move, and I wish I would have done it. I bought a condo in Destin while I was there at Eglin, but I never lived in it and I'm still stuck with an awful rate. If you can get a primary residence rate on it and STR it when you move out, you'd probably be sitting pretty. Just keep in mind that your insurance will probably go up when you change your policy to cover STRs. Also watch out for any HOA restrictions of course, and be aware that interest rates may be a lot higher for a non-warrantable condo - although I'm not sure how that would play out if it's your primary.

Where about did you end up buying. I’m slowly noticing a lot of the beach condos I’d be looking at breaking even once I rent them out unless I put down a hefty down payment. At 40% down if I wanna make the passive income. Otherwise, I’m still trying to decide whether breaking even is still a good deal because I get to own a beach rental I can use, while still building equity. 

Looking to buy a property in Fort Walton Beach. I’m in the military, and will be moving again in about 15 months. Currently renting, but was really debating buying a beach front condo in Okaloosa island to live in for the remainder of my time here, but then hoping to rent it out once I leave. 

Does anyone have any experience buying short term rentals in that area? Any recommendations? Just currently exploring what would give me the best bang for my buck. Seems like okaloosa is very busy and lucrative during summer, but kind of a dead town in the winter. 

Quote from @Ryan B.:

@Carlos Lopes I don't think it's completely unacceptable, but it's less than ideal.

Yes you're getting the loan paid down by the tenants and hopefully the property appreciates in that time. You're also getting tax benefits from the property. Cashflow on top of that would be ideal, but I guess technically not required.

Also, over time as rents increase, the property should start to cashflow.

I think it's just not ideal because it's a matter of opportunity cost. Yes you're getting all of those benefits, but you may be getting those benefits plus strong cashflow with a different property.

If you're barely cashflowing then any repairs or vacancy would put you into the negative easily.

Gotcha makes sense. Yea cash flow is obviously the most desirable outcome, but I just felt like the loan pay down aspect of it seems to always be dismissed as if it doesn’t exist. So really it’s still a benefit, just not ideal because you could be making cash flow elsewhere with the equity of your property, assuming you have any. In that case would you sell or cash out refi to use that equity elsewhere? I guess depending on future rates, cash out refi could potentially make a break even property finally cash flow all while taking out cash to buy another?