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My husband and I are looking to purchase some 1 bed 1 bath economy condotels. When we met with a realtor, January 2021 he stated we could have 6-12k positive cash flow yearly at Corolinian, Dunes Village, Meridian Plaza, Baywatch, Schooner and Ocean Reef.
We really like Ocean Reef. I am wondering if anyone here who owns one can answer some questions. I have asked on FB and my realtor to have me speak with someone and people say they would love to help and then never answer me. This is my 4th try.
1. Are you happy you purchased a condotel. Reasons why and why not
2. Are the profits told to me above factual
3. Are there more expenses beyond taxes, listing company to rent and HOA
4. Any positive and negative like people destroying the property etc
My husband and I are looking to purchase some 1 bed 1 bath economy condotels. When we met with a realtor, January 2021 he stated we could have 6-12k positive cash flow yearly at Corolinian, Dunes Village, Meridian Plaza, Baywatch, Schooner and Ocean Reef.
We really like Ocean Reef. I am wondering if anyone here who owns one can answer some questions. I have asked on FB and my realtor to have me speak with someone and people say they would love to help and then never answer me. This is my 4th try.
1. Are you happy you purchased a condotel. Reasons why and why not
2. Are the profits told to me above factual
3. Are there more expenses beyond taxes, listing company to rent and HOA
4. Any positive and negative like people destroying the property etc
I would also take a look at Caravelle, Beach Cove, Sea Watch, Ocean Creek, and Kingston Planation.
They are all higher end properties.
Do not for any reason have to depend on the cash flow to pay for the unit.
My family has multi condotel units at Ocean Creek. Yes, we like the condotel because we don't have deal with renting it out.
Profits are never guaranteed. One big assessment or something like Covid can wipe out any yearly profits.
Not really any additional costs beyond a weird assessment.
The nicer the property, the less you have to worry about someone trashing your unit.
Don't go into this thinking you will make lots of money. Your goal should be someone else paying off your unit.
My husband and I are looking to purchase some 1 bed 1 bath economy condotels. When we met with a realtor, January 2021 he stated we could have 6-12k positive cash flow yearly at Corolinian, Dunes Village, Meridian Plaza, Baywatch, Schooner and Ocean Reef.
We really like Ocean Reef. I am wondering if anyone here who owns one can answer some questions. I have asked on FB and my realtor to have me speak with someone and people say they would love to help and then never answer me. This is my 4th try.
1. Are you happy you purchased a condotel. Reasons why and why not
2. Are the profits told to me above factual
3. Are there more expenses beyond taxes, listing company to rent and HOA
4. Any positive and negative like people destroying the property etc
I have one at the True Blue golf course in Pawleys Island...
1: So-so. I haven't quite had mine three years yet, but tbh sometimes I wish I had gotten just a standard long term rental house instead.. It's doing ok, but so far it's just barely breaking even. Meanwhile I have a rental house that brings in over $15k annually on a $1k monthly mortgage. Plus I had to furnish the condo which I wouldn't have had to do with a standard rental. My plan was to use it as an investment property/vacation home - but I only get down there maybe three times per year so far.
2: I'm not familiar with the properties you listed, but that sounds about right... unless by "positive" cash flow you mean 6-12k in yearly profit. Mine brings in ~13-14k total, which barely covers the mortgage, the property management fees, and the monthly HOA fee.
3: Yes.. there is an additional county tax of some sort where they somehow tax you on your furniture inside the condo. It falls under some weird vacation rental tax rule... or something lol. But yes.
I have one at the True Blue golf course in Pawleys Island...
2: I'm not familiar with the properties you listed, but that sounds about right... unless by "positive" cash flow you mean 6-12k in yearly profit. Mine brings in ~13-14k total, which barely covers the mortgage, the property management fees, and the monthly HOA fee.
.
This. My family didn't start making any money until all of the mortgages were paid off. Even then, the management company takes about 50% of the rental revenue. However, it is worth it not to have to deal at all with renters.
The last thing you want is someone calling you in the middle of the night for more towels.
This. My family didn't start making any money until all of the mortgages were paid off. Even then, the management company takes about 50% of the rental revenue. However, it is worth it not to have to deal at all with renters.
The last thing you want is someone calling you in the middle of the night for more towels.
If you don't mind me asking - why so much?? Mine charges 15%
We have owned a rental beach condo for almost ten years. This is NOT something you go into for the extra income, because as others have said, by the time you pay all of your expenses, and we never even had a mortgage, there are months were you will end up in the hole, specifically in the winter.
Our condo is in a very nice, newer resort near the Grande Dunes area. We pay a just over $1,000/month HOA fee which doesn't cover property taxes or insurance. As others mentioned too, there is a weird tax in SC wherein you have to do an itemized inventory of the contents of your rental every year and place a dollar amount on each item and then they tax you separately on this. It doesn't usually amount to more than a couple of hundred bucks, but it's there.
We use a rental company because we live 800 miles away and don't want to deal with renters directly ourselves. They do a great job and keep it full almost year round, except for a week or two in the late fall. We are VERY blessed to have a Canadian snowbird couple who have fallen in love with our unit and rent it like a year in advance every year for the following December, January, and February, otherwise it would likely sit empty for much of that time. Even at that, we still end up in the hole during those months since the winter rates are so much cheaper, but it's better than not renting it at all, and most of the time the summer months of June, July, and August give us surplus income over monthly expense so we keep the unit mainly to have a place for us and family to go for vacation and for the increase in value over time. It has already appreciated about 50% of what we paid for it, but were very fortunate to have purchased it during the housing crash after the great recession and got if very reasonably via short sale.
Every year there are added expenses here and there, such as a linen replacement fee and a furnace and air conditioner maintenance fee in May, which add up to several hundred dollars, and occasionally we have been instructed that we need to replace slightly worn furniture, appliances, or carpeting, but these expenses are not optional if we want the resort to continue to rent our property out, and right now we need the income. My dream is to eventually have it without having to rent it out to strangers, but that is a few years away.
If you don't mind me asking - why so much?? Mine charges 15%
It's oceanfront and the rental management company does an excellent job of keeping the units rented out. A few of our neighbors are on VRBO, Homeway, and other rental venues and they don't stay rented near as much as I do. I'd say I'm averaging about an 80% occupancy rate for the year.
Quote:
Originally Posted by Southernatheart11
THANKS SO MUCH FOR THE REPLY!! I am not familiar with assessments please advise.
An assessment is something major that has to be done to your building like an roof or redoing the pool.
Keep an eye on the age of the buildings you are looking at. The Federal Government makes every building go through an assessment at 40 years of age and hotels built in the 1980s are reaching that assessment. It is usually rebuilding balconies but it can be more. Speak to your realtor.
In summary to the above, renters are hard on rentals. I had holes in doors, stains, broken fixtures and furniture. Most resorts have a 50% split fee, some are 60/40. Taxes are higher if you live out of state. HOA is expensive for oceanfront units. My unit was paid in full, no mortgage, and most years I just did break even, no profit. But I had a nice place to retreat to and visit in the winter when it wasn't rented as much. Good luck!
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