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Buying Resort Destination Investment Property
It is everyone’s dream to own a condo or home in a fabulous coastal destination. Many think this is only achievable by the ultra rich and hope for a just a weekend holiday at the beach for themselves.
But more and more people are realizing this dream. As more people retire or consider their retirement, they understand that coastal real estate is at its lowest price in years and is only headed up into quite possibly unattainable market values.
In order to get into a property today, which they can enjoy part-time now and perhaps full-time later, many buy rental properties. Destination rental properties can be anything from beachfront high-rise condos, multi-family homes, sea cottages, or condo-hotels.
In an area like South Padre Island, which is very reasonable, coastal real estate properties can still cash flow, especially if the property was purchased at a great value, is a highly desirable rental, and is marketed aggressively. But even if some of these factors are not met, most properties can perform reasonably well and return some of the investment to assist with the cost of ownership. Many of our buyers eventually recoup enough equity in one property to buy another rental or upgrade their property several times over before they retire.
There are also tax benefits, and you and your family have the option to enjoy your property during vacations, weekends, and holidays.
The keys to successful rental ownership are property selection and rental management. It is important to select a property that meets the rental criteria fairly well. Be aware of price and ask for a rental history. If a property doesn’t have a rental history, then ask a rental agency to give you an idea how a certain property will perform.
You can manage your rental property in several ways. Some buildings have their own on-site rental service. Often this is run well and keeps the risk of damage to a minimum. However, if you don’t feel you are getting the best service, then you have no other choice. Other properties allow you to select your own rental agency. There are a number of companies to choose from in each destination. Agencies here typically take 30% of the gross profit for management fees, cleaning services, and marketing. They often book a significant number of rentals, making up for the additional expense.
Other owners choose to manage their own rentals. The popularity of “rent by owner” websites has made it possible for owners to market their rentals nationally for a reasonable fee. Local services can be contracted to clean and check-in guests if the owner lives at a distance. This is potentially the most profitable management choice, but does take time, and owners need to consistently attend to inquiries.
When calculating the property you can afford, always be aware that this is a seasonal industry. Our high profit times are summer and spring break. There are consistent rentals in the winter and some good weekends in the fall, but rental income checks will vary greatly throughout the year and can't necessarily be depended upon at all times. Also, your property will need to be upgraded as items get damaged or outdated. Keeping up the interior of your property will translate into more inquiries and repeat rentals.
So is it a business or is it a beachfront condo? Well, on our island most owners think their property is a little of both. But enjoying an island property now and in retirement is a great reward for a little hard work.
Wendy Hauschildt is responsible for marketing and design for Coastal Properties GMAC Real Estate and is also a contributing columnist for the Island Breeze newspaper on South Padre Island.
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Wendy Hauschildt is a licensed Texas Real Estate agent and columnist for South Padre Island's newspaper.
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| Home Buyer Must Haves – Today
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Number of Views: 12270
These days, buildings are trendy, kitchens are seriously trendy, baths can be elevated to high fashion, and ceilings are certainly cutting edge.
New buyers are demanding that their properties meet high design standards. And it is surprising where the décor fashions are popping up.
The first buyer must have – Ceilings
Popcorn ceilings are now the pinnacle of bad ceiling style. Smooth is in and acoustic popcorn spray is seriously out. This is odd as the new ceiling height expectations make popcorn texture barely visible. 9 – 11 foot ceilings are now the desirable norm. In addition, architecturally accented ceilings are favorable. Add a tray design, raised panel for lighting, or barrel ceiling for maximum trendiness.
The second buyer must have – Lighting
Florescent lights are officially a bad idea. Preferred lighting includes pendant lights, track lighting, and recessed lighting. Additional accent lights are a big deal as well. Buyers like to see under the counter halogens, over the cabinet lighting, or even lit glass cabinets. To combine trends, include accent lighting in your raised tray ceiling design. Bathroom lighting has grown up, too. A row of round vanity bulbs on a mirrored fixture won't meet with buyer enthusiasm. Look for stylized fixtures often flanking the mirror.
The third buyer must have – Bathrooms
A traditional vanity with faux marble top has been met with disdain in recent seasons. Tile top or granite has been better received. Bathroom sinks have changed, too. The pinnacle of trendiness are raised bowl sinks with faucets mounted in the wall above. They may be glass, porcelain, stone, or even wood. They are almost too pretty to spit toothpaste in. Fiberglass shower surrounds are out as well. Buyers prefer a tile or granite surround. Open showers without doors are a unique new trend. Of course, these must be cleverly designed to prevent flooding.
The fourth buyer must have – Flooring
On South Padre Island we don’t see a lot of carpet anymore. Living areas are definitely covered in a hard flooring. Tile, marble, travertine, bamboo, or hardwood are acceptable. Tile sizes have changed, too. Traditional 12 inch tiles are a thing of the past. Now 14 – 24 inch tiles have become the favorite. Colors are fairly neutral, but quality is a big consideration.
The fifth buyer must have – Architectural Elements
New builders have been getting creative. Otherwise vacant walls are now sporting elegant niches. Some may be deep enough for shelves, others are shallow lit spaces designed for displaying art. Door frames that used to be square are now soaring arches. Cathedral ceilings may make room for high sculpture storage, and accent windows are appearing everywhere.
Feeling less than trendy? These kind of specific changes may not be a remodel option for older, low ceiling properties with Hollywood baths and nicheless walls. But don’t be alarmed. Someday smooth ceilings will be sprayed with popcorn again, and owners of high ceilinged homes will be wondering why their electric bills are so high. These trends too shall pass.
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 Our Real Estate Advisor magazine is full of articles, real estate trends, and advice. Plus, it includes all the best listings for South Padre, Port Isabel, Laguna Vista, and the SPI Golf Course. Contact us to have a copy of the magazine mailed to you or click here to download a .pdf version.
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