Sally loves the beach. She always books her vacation time in a VRBO condo that is at the nearest beach to her Nashville home. The seven to ten hour drive is worth it once she gets there. She would love to own a beach rental but she has a great job in Nashville. For now she soaks in the salty waves and sun by renting a VRBO when she can get enough time off.
She has a retirement plan but has been thinking lately that she wants to leverage some of her equity from her home into a beach rental. Because she loves going to the beach so much she’s wondering if maybe it would be a good investment to buy a beach condo.
Here are the top 3 things she needs to consider before making her move.
Investment Property Cash Flow
When she plugs in the sale price, mortgage terms and expenses against estimated income she has 10% cash flow. The equation also taken into account the area as it relates to tourism and booking averages. She has checked all her numbers and finds out that she can buy a beach condo and still have a healthy cash flow in addition to adding an investment property to her portfolio.
This gives her peace of mind that she is making a wise investment. She doesn’t want to make an emotional investment just for the sake of her wanting to enjoy the beach. She wants her money to make money!
Property Management
Once she buys a VRBO she’ll need to hire a management company because she is so far away from the rental. In addition to the distance, she doesn’t want to have to go out to her beach rental for repairs. She’s ok with delegating this.
Future Building or Demolition Plans
Because Sally is thinking of buying a condo she wants to be sure to get full disclosure and background information on the building she is buying into. The last thing she wants is to buy a condo who’s building won’t be maintained.
She also wants to know if the building is letting itself depreciate to the point of needing to be demolished. If this is the case then what happens to her ownership in her condo? Getting full disclosure on any property is important and even more so on an HPR, Condo, Townhouse or other property with an association or attachment to another building.
If you’re like Sally and have always dreamed of owning a family beach rental that you can enjoy, share and rent out for extra money – we can help! Make an appointment today. We’ll be happy to sit down with you to review your situation and figure out how best to make your dream a reality.
