Vacation Rental Ownership Experience?

[Chocaholic]

Sale of house proceeds have us considering investment options. Thinking about buying a beach (or slightly off-beach) home on the SC or NC coast to use as vacation rental. Would have realtor manage things and don’t intend to use it for ourselves much, if at all.

Properties stay rented late spring to early fall pretty reliably. We especially like Oak Island but exact location TBD.

Anyone done this? Idea would be to have a reasonable mortgage, probably 50% of value. Trying to build an income foundation as planning for retirement.

Appreciate any insights or ideas.

[fastfredracing]

My partner is doing this. His first one was right on the shore. One big flazoo, is that they get pounded by the weather. He had to put some big money in it every year, from storm/wind, and water damage. Flooded his septic a few times, etc...
He sold that one, and moved inland a little bit.
New one does not rent for as much, and he has not filled the season yet.
There are tons of them for sale. My take is that there is a reason for that .

[recycled sixtie]

As mentioned be aware of storm damage. With climate change there is weather change and possible rising sea levels with resultant flooding. Cliff erosion, soil erosion etc.

Add to that guests that like to party and complaints from neighbors about the noise.
Add to that possible damage to a rental. Sounds negative but it can be done with a well thought out plan!

[masraum]

Seems to me if you're looking for income then a regular rental vs vacation rental would be better, but I don't know since I've not done either.

I guess the deal is with a regular rental, you probably get steadier money, but less of it. With a vacation rental, I assume you get more money per rent, but it's less steady, and possibly more trouble since they are so short term.

And as previously mentioned, anything on the coast is going to be a magnet for mother nature's wrath which sounds expensive.

[Seahawk]

Here are your comps:

https://www.airbnb.com/s/Oak-Island--NC--United-States/homes?checkin=2018-04-28&checkout=2018-04-30&adults=1&children=0&infants=0&place_id=ChIJs0xusYGgAIkRc-rOLDysT7k&source=mc_search_bar&refinement_paths%5B%5D=%2Fhomes&allow_override%5B%5D=&s_tag=KJO7Ajr8

Call the owners of the houses listed. You will be amazed what 1/2 of them will share with you.

Interesting, not a lot of reviews on the properties.

[john70t]

Once rented a house down south with a bunch of people on Topsail Island, NC.
It was a nice place with the usual modern features.
(which are quite nice but cookie cutter IMO)

But..
The area was on a narrow strip and there were a ton of competing houses crammed alongside the road.
There were two houses packed into that property and the neighbors were uncomfortably close. I could throw a rock in their hot tub.
NC adds a significant tax to rentals. Something like 8%. I don't remember.
Beach house plus weather=Overhead.
Limited rental season at top dollar.

[Rick Lee]

My folks bought a beach house as a second home, but rented it out during peak season for around $3k per week. That money easily covered the mortgage and maintenance for the whole year, and they went down there on weekends and for longer stays off season. I don't know how, but they swear the tax advantages alone were worth it all. Once they retired, they moved there full time. So now they have a pretty expensive house free and clear that was mostly paid for by others.

[sugarwood]

One vote to skip the real estate hassles, and just park the money somewhere and enjoy your free time instead of filling it with work.

[KFC911]

Originally Posted by sugarwood

One vote to skip the real estate hassles, and just park the money somewhere and enjoy your free time instead of filling it with work.

^^^^ Concur...unless the coast is where you want to retire and live. Another data point....all of my properties' insurance premiums increased significantly a few years ago....you see where I live....due to storms on our coast . Insurance co's do NOT lose money....

My landlord experiences....ONE bad tennant, or trashed property will make the $ seem moot...and I've had mostly great renters, long term. Short term, one week transients, at the BEACH ....nope, not for me....and $ don't matter, nor does YOUR property matter to some of them...YMMV.

[ckelly78z]

Unless I were in close proximity to keep an eye on the property, and fix potential problems quickly, I wouldn't do a rental situation. I wouldn't mind one if I could be the fix it guy, and the cleaner/care taker (If I were retired), but would grind my teeth paying others to do it.

[hcoles]

There's another thread around here on this.
We've been vacation renting a house we own for 20 years along with managing another vacation rental.
If you do a good job it is MORE work than you think it will be.
I would not do it unless you can be within a 30 minute drive.
If you don't mind being crapped around all the time with small stuff - it is an okay business.
My wife does 99% of the work - I'm the fix it guy for most things.
I could list 20-30 things that you will run into but I won't I think most were listed on the other thread. We are close to being OVER-IT.

[Salty Springs]

Choca,
All of the above are valid points. That said I have had a vacation rental (Cocoa Beach Fl.) for 18 years and have done very well. I would move your search farther south (Florida) South of Daytona Beach. You will then get year around rentals. I manage it myself and use VRBO for most of my guests. I have had no damage at all over those years. Jan - Aug I am almost always full. Sept thru Dec is slower with a sprinkling of weekend rentals., but that is fine. That's when our family uses it most. Put a pencil to it and if you can get a positive cash flow go for it.
Dave

[mgatepi]

My wife and I have been spending some time researching the costs associated with this. We are considering property in South Florida on the West coast.

I have put together a rather complex business plan. You can plug in your own numbers and see if it makes since to you. My information is based on conversations I have had with realtors and owners, it is somewhat specific to the area we are considering.

Send me a PM and I will forward the spreadsheet to you if you are interested.
mg