Our experienced team of Destin real estate agents is always ready and able to answer questions about buying and selling properties in Northwest Florida. To help answer your questions, Newman-Dailey Real Estate Agent Heather Sprigler has tackled some of the most frequently asked questions about buying a vacation rental at the beach.
What should my budget be?
This is a great question and should always be the first place to start when looking to purchase an investment property. Unlike your primary residence, more often than not a lender will require a minimum of a 20% down payment to purchase an investment property. In some cases, investment properties can be purchased as a second home, which might require less money down. Using a local lender in the Destin area will be your best resource for finding the best financing options. They will guide you on how much cash you need out of pocket, which will help dictate your buying power for finding the right price point.
Should I buy a condo or a single-family home?
I’ve found this to be one of the most frequently asked questions for purchasing a vacation rental at the beach. This choice, in particular, will often come down to personal preference. To answer this question, I would first start by asking yourself if you’re purchasing a vacation rental property mostly for your own personal use and just renting it out to offset your costs, or are you looking to make the most money possible? If you love sitting on the balcony and watching the waves, you will probably be happiest by owning a beach condo. If you’re wanting to maximize your rental income, you will probably want to look at purchasing a house. By purchasing a house off the beach, you will be able to buy a larger home that can sleep more people and can often earn higher rental income.
How much income can I expect to make?
A detailed cost analysis is an absolute must when looking at purchasing an investment property. If the property you are interested in is currently operating as a vacation rental, your Realtor will be able to provide you with the actual rental income it is already producing. If the property is not currently a rental, your Realtor will be able to provide you with rental projections from a reputable property management company such as Newman-Dailey Resort Properties. By receiving projections from an experienced professional in the market, you'll have an accurate view of what the property could potentially generate annually based on average rental rates and occupancy rates for similar size rentals in the same location.
Should I hire a rental company or manage it myself?
Unless you have a lot of spare time on your hands, a property management company is the way to go. They will handle every aspect of your investment property from phone calls, reservations, cleaning crews, maintenance and repair assistance, etc. Managing your vacation rental yourself might seem like an easy task, however, it never fails that your guest gets locked out at 10 pm or they can’t figure out how to work the remote control or the air conditioning breaks. A property management company offers 24/7 support for your rental guests which means you can rest easy knowing your renters are well taken care of and your investment property is safe and sound.
What is the best area to buy in?
Most of this will be determined by your budget. A good rule of thumb is to look at a map from Destin to Rosemary Beach, and starting with Destin the further East you go the prices increase. If budget isn’t a concern, then identifying a beach community that fits your personal style with amenities and local activities that interest you is a great start. Destin and Miramar Beach are filled with activities such as go-karts, putt putt golf, parasailing, dolphin cruises, fishing charters, outlet malls, and restaurants galore. While 30A/Santa Rosa Beach is quainter with a lot of high-end dining options, very few high-rise buildings, and fewer people.
What do the HOA dues cover?
When purchasing a condo, the HOA dues will usually cover most utilities and insurance. As an example, a lot of the condo buildings in our area will have their dues include water, sewer, trash, cable, Internet, upkeep of the amenities, insurance on the building, landscaping, pest control, and on-site management. The HOA dues for a single-family residence will often only include the maintenance and upkeep of the neighborhood amenities. For the most accurate HOA information consult with your Realtor.
What happens if we get hit by a hurricane?
Most condo associations will include hurricane, flood, and wind insurance in the HOA dues. For a single-family residence, finding an insurance policy that will have you covered, whether it’s from flooding or high winds, is a must. Prior to your purchase, get several insurance estimates from local agents to compare premiums and coverage options.
Are you ready to find your dream vacation rental property?
View properties for sale online or contact Heather Springler ([email protected]) or any one of Newman-Dailey's experienced Real Estate agents to learn more about buying real estate in the Destin area.
Not ready to purchase an investment property?
Conduct additional research by planning a stay in one of Newman-Dailey's premier vacation rental homes or condominiums. View our collection of vacation rental properties online or call one of our friendly vacation specialists at 1-800-225-7652 to narrow your search.
See you @ the beach!
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