Question about Purchasing Condo in The Caravelle Resort (Myrtle Beach: for sale, oceanfront)

[old-school]

Hello everyone, my wife and I after visiting several resort properties in MB are thinking of taking the plunge and investing in a unit, or possibly 2 at The Caravelle Resort. Not the Caravelle Towers of which we were not at all impressed with. However The Caravelle was recently updated (2006) with all new appliances, flooring, bedding, granite counter tops, carpeting and tile floors. We would be buying one or two of the oceanview studios with what they call the "Bump out" for extra room. We really like these units as they are quite large for an efficiency unit and the decor is very nice indeed. Since we do not live in SC we would love to hear from South Carolinian's as to how the Caravelle is regarded down there.
Thanks in advance!

[phillybound]

If you look at realtor.com they have all these condos for sale for as little as $30,000 whats up with that ? seems like a steal, I wish a local could fill us in on that as well

[canudigit]

I'm not a local, but I have done a lot of research, and it appears to be a case of too many condos, not enough buyers, and too many condos that were purchased when times were better and now the owners can no longer keep up the payments so they have slipped into foreclosure or short sale status.

To give you an idea, we are in the process of buying a condo in MB for under $140,000 that sold for $485,000 only three years ago. When the housing and employment markets crashed, the values on these properties crashed as well, and people couldn't make the payments on a second property that cost them almost $500,000 and is now worth less than $200,000. I think another problem is/was that a lot of people buy vacation rentals expecting to make money monthly on them, but the reality is that with all of the expenses involved, you have to go into it not expecting to get income out of it on a monthly basis, but rather on the future appreciation (hopefully, if you can hang onto it long enough) and the benefit of using it for yourself for vacation. There will be months where you will come out ahead financially (primarily June, July, and August), and months where you had better have some money in reserve to pay the monthly fees when the unit isn't renting regularly. I think that a lot of owners didn't budget for that, and if you add a mortgage payment on top of that, it's going to be a lose/lose proposition. If you can't pay cash, most banks won't lend for vacation condos in this economy, or so I've read here and our realtor confirmed it, and your dream condo will quickly become a nightmare as the expenses far outweigh the income. Do it with cash, or not at all, and definitely don't expect to see money coming in hand over fist every month.

[blueherons]

Originally Posted by old-school

Hello everyone, my wife and I after visiting several resort properties in MB are thinking of taking the plunge and investing in a unit, or possibly 2 at The Caravelle Resort. Not the Caravelle Towers of which we were not at all impressed with. However The Caravelle was recently updated (2006) with all new appliances, flooring, bedding, granite counter tops, carpeting and tile floors. We would be buying one or two of the oceanview studios with what they call the "Bump out" for extra room. We really like these units as they are quite large for an efficiency unit and the decor is very nice indeed. Since we do not live in SC we would love to hear from South Carolinian's as to how the Caravelle is regarded down there.
Thanks in advance!

I can give you good information on The Caravelle because I know the builder, I know the owner who redid all the units, and I know the General Manager of The Caravelle well.

The Caravelle is considered one of the nicest properties in Myrtle Beach. They have a very high occupancy rate and the property management company is very respected in our community. They run a tight ship and keep their units rented.

Kevin Warren who redid all of the units, is a stickler for quality and did not skimp on the units.

Chip Russell, the manager, is excellent at his job and his been in hotel management in Myrtle Beach for the last 25 years.

With all due respect to canudigit, this does not apply to the Caravelle.

If I'm not mistaken, the split with The Creel Company is 60/40.

Phillybound, those $30,000 units are motel rooms at the St. John who is owned, managed, and is rented out as The Caravelle.

[canudigit]

Originally Posted by blueherons

I can give you good information on The Caravelle because I know the builder, I know the owner who redid all the units, and I know the General Manager of The Caravelle well.

The Caravelle is considered one of the nicest properties in Myrtle Beach. They have a very high occupancy rate and the property management company is very respected in our community. They run a tight ship and keep their units rented.

Kevin Warren who redid all of the units, is a stickler for quality and did not skimp on the units.

Chip Russell, the manager, is excellent at his job and his been in hotel management in Myrtle Beach for the last 25 years.

With all due respect to canudigit, this does not apply to the Caravelle.

If I'm not mistaken, the split with The Creel Company is 60/40.

Phillybound, those $30,000 units are motel rooms at the St. John who is owned, managed, and is rented out as The Caravelle.

It sounds like you work for the Caravelle in some capacity.

Right, the place that we're buying has a 65/35 split, so I know all about that, but I'm talking about the monthly HOA fee added to the fact that you only get around 60% of the rental income. Add to that property taxes, insurance if it's not included in the HOA fee, other assorted costs, and it still isn't going to be like owning regular rental property that you manage yourself, which is what I'm comparing it to, since my dh and I have owned rental property for several years. If you look at a detailed financial statement for any of these vacation condo units, it's not a huge money maker overall.

We briefly looked into buying in the Caravelle, which appears to be a very nice property for the most part, but ultimately we wanted something bigger and a bit newer. When we asked to see the financial statement for one particular unit in that building, it didn't look much different than those of any other oceanfront condo property. The costs are still relatively high compared to the income, again, in comparison with regular rental property that one manages themself. We own several apartments and have no HOA fee, no management fee, and no contents insurance fee, so our monthly bottom line looks a lot better than it would for a vacation rental property. We are purchasing a vacation rental strictly for the appreciation value and for a place to escape to during the colder months. I have spoken to several realtors and several management company personnel in MB, and they all echo what I stated here, namely, that you don't get into vacation rentals for the monthly income but for the long term appreciation value and for a personal vacation destination for yourself and your family.

[blueherons]

No, I have never worked for the Caravelle. I'm just good friends with Chip and Kevin and grew up with Alicia Creel.

One important thing to keep in mind, the Caravelle has a much higher occupancy rate than other properties because they spend so much money in marketing, direct mail, and are very active with the Chamber of Commerce, etc.

June, July, and August 95+ percent occupancy is a given. Where the Caravelle stands out is that it heavily markets group sales and golf which is what fills the hotels and keeps them at 70% during off and shoulder season.

They spend money to send their golf department to golf shows and the group sales to various conventions and sales trips.

Compare it to properties such as The Sands which have pretty much done away with their group sales department.

I worked in the hotel business in Myrtle Beach for many years.

[blueherons]

Yes, I'm very familiar with the fact that you don't purchase these units to make money but it's icing on the cake when it pays for itself.

My family owns a lot of rentals and all of ours are property managed.

The Caravelle is such a stand out because it is run as a hotel (daily maid service, front desk, restaurant, etc).

Where are you purchasing?

I can probably give you a ballpark occupancy.

[canudigit]

Thanks, but I'd rather not say until it's a done deal, since it's a short sale and we're still waiting to hear if the bank accepted our offer. We already did the necessary homework, such as checking occupancy, rental revenue, etc. and it's a sound investment, we just need to get the final okay from the bank, since the owner has already accepted our offer.

My dh and I have always managed our rental properties ourselves, so of course, we have been able to collect 100% of the rent and realize a tidy monthly income. This will be different, but nothing that we're not prepared for at this point in our lives. We're looking forward to using it as a getaway for many years to come.

[OAKHARBORGUY]

I stayed in the Caravelle last year in a Ocean Front "Deluxe" 1,000 ft condo. It was a terrible experience. Closet doors in the bedroom were off the track. Called maintenance they came out and looked at it and tried to fix but left without it working. Trash was all over the grounds under our balcony. We complained and in 3 days no one showed up to clean the area. Only got worse and smelled bad. The pipes were leaking and the building smelled moldy. Our room was was filthy dirty. No hot water in the morning to take a shower. Very loud noises from floor above us and on both sides. Constant noise from horns honking when people locked their cars. Maid service was terrible. She never cleaned, just dumped the trash baskets and left. I would never ever stay there again.

[blueherons]

Originally Posted by OAKHARBORGUY

I stayed in the Caravelle last year in a Ocean Front "Deluxe" 1,000 ft condo. It was a terrible experience. Closet doors in the bedroom were off the track. Called maintenance they came out and looked at it and tried to fix but left without it working. Trash was all over the grounds under our balcony. We complained and in 3 days no one showed up to clean the area. Only got worse and smelled bad. The pipes were leaking and the building smelled moldy. Our room was was filthy dirty. No hot water in the morning to take a shower. Very loud noises from floor above us and on both sides. Constant noise from horns honking when people locked their cars. Maid service was terrible. She never cleaned, just dumped the trash baskets and left. I would never ever stay there again.

Contact the General Manager Chip Russell.