All Forum Posts by: Rich McElaney

@Bob B. There have been rumors about a plan to close off Pleasure Island (Carolina Beach and Kure Beach) to non-resident traffic - as of yet nothing is confirmed. 

@Mark H. Porter  I understand your math - I would consider it a win if I attained break-even on this property in year one given all the uncertainty.

Are the beaches still open in Myrtle?

Thanks for your input on this!

@Melinda O Miller 

"We have five vacation STRs in Carolina Beach and Kure Beach. We use vrbo and AirBNB. Our main rental property-oceanfront, pool 5BR/4.5BA has been booked from April 24 - August 23 since Jan. April 8 - 15 has cancelled and we refunded 100%. April 3-5 cancelled due to baseball tournament cancellation; we refunded 100%. We had a family here from Minnesota (drove here) March 15 - 20. They have extended their stay for an extra week--why not practice social distancing at a beach house?!? We have also had a request to move a May 20 - 27 stay to the fall. We informed all of our current reservations that we were relaxing our standard cancellation policy-meaning that they have longer to decide to cancel and hoping that the craziness will blow over sooner rather than later. So far, no more cancellations.

Three of our other properties are smaller one- or two- bedroom units that are rented month to month during the off-season and are occupied until May. They have a smattering of reservations throughout the summer but usually are not booked very much in advance.

The beaches are closed for now but we are hopeful that a little pain now will nip this thing and we can have a robust summer and fall season. And hopefully no hurricanes this year! This is our third season with rental properties on Pleasure Island and each one has brought challenges. Vacation STRs definitely require nerves of steel as so much is unknown and out of your control.

Melinda O. Miller

Our Places in the Sun, Inc."

The beach closure definitely pushed me to consider what the rental income for my first investment might look like for year one of ownership.  I do think we'll get to the flat part of the curve at some point in the near future but none of the experts are advancing predictions of when that will happen. 

This is a great area for investment and I think long term prospects will be solid - my gut tells me to pass on this particular deal and wait for things to re-calibrate before moving forward with another purchase. 

Best of luck with your rentals and may this pandemic resolve optimally!

@Christina Savinar I totally agree that it's easy to unintentionally underestimate total rental ownership costs - just making an offer and going deep into due diligence opened my eyes to expenses I didn't initially consider.

Thanks again for your input here.

That sums it up pretty well @Anand S. - I was on track to purchasing my first rental and now it no longer makes financial sense to move forward. The number one focus is on stopping the spread. 

@Joe Prillaman , thanks for the update - keep those bookings rolling in!

@Chris Seveney Thanks for your reply - much appreciated.    Do you know what the typical rental policies are relative to a transfer in ownership of a property with existing bookings? I'm in the process of researching it right now and don't have a definitive answer yet.

@Joe Prillaman Hey Joe! I'm overdue in reaching out to you! That's great to hear you've had no cancellations to date and booking activity is strong. 

Thanks for weighing in here!

I'll touch base and bring you up to speed on this pending purchase.

@Joey Morea  Thanks for your reply and great to hear of the rebooking! I agree with you on the drivable destination being potentially more attractive than flying and increasing exposure - at least until the reaction starts to level off.

The breakeven number came from talking to other local property owners about average length of stay for similar properties in the immediate area - it's more of a goal threshold than anything else,

I just found a Coronavirus discussion on the main discussion board but wanted to drill down more specifically to get input from current STR property owners in the North Carolina Beach areas.

I have a pending deal for a 2/2 STR in Carolina Beach that has been rented short term for 5+ years showing decent net income history. There are six dates already booked for 2020 by the current property owner but those guests will have to be notified of new ownership and bookings would need to be transferred or re-booked soon after closing on the property. ( I plan on keeping the rates exactly as they are for those bookings.)

My calculations show that I would need 52 bookings to break even, which would be an approximate 30% drop in activity using last year's booking numbers. 

My questions:

1. To date, what are current STR beach property owners seeing in terms of cancellation activity?

2. Are NC Beach area STR property buyers (whether new or experienced) buying in the face of coronavirus' unpredictability?