Buying real estate strictly for churning an income requires the buyer to shop from a new perspective that is focused on the potential for profit rather than personal taste. The amount you are willing to pay for the property will be determined by how much you think you can get others to pay you for the property. You want to know you will collect more than you pay for the property. Ideally, select a beach condo that has the most desired location, lowest taxes, best market and most amenities for your investment.
Choose a Good Location
Renters of beach condos are often looking for convenience and views. Generally those condos that are closest to the water generate higher rental incomes and are also much more desirable. Having direct access to the beach is what renters think of when they think of beach condos. The neighborhood is also important, as renters enjoy the novelty of walking to local shops, restaurants and bars if they are in the area. Choose a condo that is in a clean and beach-friendly community, as close to the beach as you can afford.
Evaluate the Real Cost of Ownership
Renting out a beach condo means someone will have to be responsible for managing the rental and for the maintenance. If you are living nearby, you may be able to handle all of this yourself. If not, you will need to investigate how much it will cost you to hire an agency or someone else to take care of the rental for you. Additionally, research homeowner association fees, additional costs for parking, the property taxes and the cost of utilities for the condo you are considering.
Know the Real Rent Amount
Many beaches have a peak-season and an off-season. A longer peak-season is better. During the peak-season, rental properties can charge higher rents because of increased traffic and competition. The beach condo must generate enough income to cover its costs during the off-season when rents are lower. Research the history of the rents in the area where you are considering buying. Choose a beach condo that will be profitable overall, not just a few months of the year. Also consider the value of the amenities the property offers.
Research the Market
The housing market is not the same for all beaches. Do your homework about which beaches have hot housing markets or where the market is expected to boom in the near future. Avoid choosing a beach condo in an area where there are many empty rentals available when you can't afford to have your rental sit empty. In some markets, you may even find the potential for selling your beach condo with a renter in it, for substantially more than you paid to another investor.
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