By Mary Phillip

Since the day we opened our doors, we have received a continuous flow of calls from real estate investors seeking opportunities at South Padre Island. Land values have doubled and, in some cases, tripled in the last few years. This has influenced builders to put as many units as possible on one lot. As the beachfront becomes more expensive and more scarce, we are being forced toward more vertical construction.

The current town of South Padre Island is primarily geared toward tourism. As a result, most property here is owned by investors and rented by vacationers, “Winter Texans”, and weekend visitors. We are seeing an increased demand for residential real estate, including planned neighborhoods with amenities, activities, and beach and boat access. This is largely attributable to the millions of Baby Boomers coming into retirement age over the next 20 years.

The goal of Coastal Properties GMAC Real Estate is to provide these investors and future residents with the information and tools needed to determine the type of property that best suits their family, financial, and investment goals. Once they have determined what they want, we can help them identify the exact property that will maximize the realization of those goals.

Because property at South Padre Island is priced reasonably when compared to other coastal locations in the United States, it is not uncommon for investors to purchase property sight unseen. These investors are more concerned with the financial potential of the property than with the color of the carpet. The information they require in making their decisions must consist of historical or projected rental incomes, and actual or estimated fixed and variable expenses. Occasionally, even a cap rate is provided, though most investors prefer to calculate that themselves.

Financing of property on a barrier island is not your usual cup of tea either. Those investors who insist on using out-of-area mortgage companies can almost certainly count on not having a smooth or timely closing.

In some cases, they will lose the deals because of the lack of familiarity of their lenders with condos, time shares, and condo-hotels, to say nothing of flood plains, elevation certificates, resale certificates, qualifying of complexes, and so  much more that is unique to this market. If there is one bit of advice that I can give a potential buyer, it is to use a local island lender. I cannot stress this enough. It is the single largest deal breaker.

The real estate community on South Padre Island is quite interconnected. We know and respect each other and routinely cooperate in selling each others’ listings. I encourage investors to find a realtor or real estate agent whom they like and trust, and stick with that person. Those investors who try to work with multiple agents may find themselves with no representation at all.

Also, I want to clarify the difference between a realtor and a real estate agent for those who may not know the difference. A real estate agent has taken the coursework and the exam necessary to be licensed by the state. A realtor has done the same, and in addition has been accepted into membership by a Board of Realtors and must abide by its code of ethics. A realtor also normally belongs to an MLS (Multiple Listing Service) whereas a real estate agent does not. Therefore if you are looking on realtor.com, you will find only the listings of those who are realtors.

Not all the agents at South Padre Island are realtors, so there is another service called a PLS where all the realtors and real estate agents have their listings. Those of us who are realtors belong to both. It can be confusing, so as I said before, find a real estate professional you can trust and let him or her lead the way. Above all, relax and enjoy the process.