All Forum Posts by: John Mausteller

I second what David said - you can find more affordable options in OBX and we have always been a short term rental vacation destination so there are not the worries of “what if the enact rules” 

Good Morning Edward, 

Have you spoken with any local lenders down here on the Outer Banks?  I know a few who offer one time close construction loans and have had multiple clients use them.   Let me know if you’d like me to send some your way.  

Quote from @Zach Edelman:

Think there's more too it. I would reach out to the short-term shop and speak with one of their OBX agents. They can advise. 

Zach, 

wilmington + Carolina beach isn’t part of the Outer Banks… not sure if they have an agent down there.  As far as I know they only have one agent here in the Outer Banks. 

Quote from @Chris Seveney:

Quote from @Derrick Williams:

Hello, 

I am considering purchasing a short term rental in the OBX area. Can someone provide me with some insight as to how profitable this would be? Also, I'd like to know good lenders in that area. 

Thanks!

 I own some land in OBX and for years wanted to buy a rental property, but the reality is if it is strictly for rental purposes, you will not make money. OBX is a great place, but it will take a very long time to be cash positive based on its current pricing, management fees and the short season.

We were going to also use it during offseason but it’s just a pain to get too. Again, love the place, but would not buy there for only investment purposes. 

Interesting seeing this opinion - there is definitely investment properties that provide great returns on the Outer Banks.  Yes, today with the high prices and high interest rates it is harder , but still not impossible.  That being said, if you bought 2021 and earlier, and are using the right methods to rent your property - I have seen great return.  This is both in my own properties and clients of mine.  

Quote from @Wilson Hunter:

My OBX property is outperforming my cabin in the Smokies.

 Same for my properties here versus my properties out near Asheville. 

Quote from @Carrie Zhang:

Quote from @John Mausteller:

Quote from @Mark S.:

@John Mausteller And if the rate hike requests are denied you can expect insurers to continue to pull out of those jurisdictions. Companies won’t agree to continue to lose money on their premiums.

They have been denied here before - most major insurance providers (the State Farm’s, Allstate, etc) pulled out of the outer banks years ago.  Almost all policies are underwritten by the North Carolina Insurance Underwriting Association and that was formed specifically so coastal area homes could and would have insurance. 

Oh interesting, I didn’t know that. That’s good they’ve take it up locally to protect property owners. I’d imagine it still being pretty expensive. Any idea on ranges? 

Hard to give a range as it depends on a variety of factors.  For one of my rentals (4bed 3bath, 1850sf w/ pool, todays value around 800kish) my premium is 4,000 a year  Again, it varies depending on so many things so I tell my clients to get quotes for properties they are interested in to really get an accurate idea. 

Quote from @Mark S.:

@John Mausteller And if the rate hike requests are denied you can expect insurers to continue to pull out of those jurisdictions. Companies won’t agree to continue to lose money on their premiums.

They have been denied here before - most major insurance providers (the State Farm’s, Allstate, etc) pulled out of the outer banks years ago.  Almost all policies are underwritten by the North Carolina Insurance Underwriting Association and that was formed specifically so coastal area homes could and would have insurance. 

Hey Carrie!

insurance rates have definitely gone up here in the last couple years (outer banks) - but I’m hopeful they cannot just keep increasing them.  The last rate hike request got denied by the insurance commissioner and there will be a hearing sometime this summer I believe (I’m sure a rate hike will follow but not the one the insurance companies asked for) 

weather events certainly can impact but typically it is just a quick in and out hurricane and of course, hope for minimal damage to property.  

Quote from @Derrick Williams:

Hello, 

I am considering purchasing a short term rental in the OBX area. Can someone provide me with some insight as to how profitable this would be? Also, I'd like to know good lenders in that area. 

Thanks!

Hey Derrick - 

happy to send you over a list of local lenders here that I recommend.   I’ll shoot you a private message.  

Hey Christopher -

You are pretty accurate, though there are some listings that come up where the CoC is decent. I think in most vacation markets right now the returns are tight... rates, higher prices, etc all making it that way. The ones where the CoC is decent, are the ones getting lots of attention and multiple offers, typically going for above asking price.