A vacation property by the beach can sound enticing to any buyer. When you are looking for a beach condo for income, there’s a major, extra component you must consider. No longer are you simply looking for a property that suits you and your family, you need to determine what will best serve the needs of your potential renters. Take your time in your quest to choose the right beach condo that is likely to provide you with income for years to come.
Assess What You Can Afford
When you are choosing a beach condo for income, consider the worst-case scenarios that could happen. While you ideally want to choose a condo that is in an in-demand location where visitors want to come throughout the year, you need to consider there may be months when you don’t have a single renter. Will you be able to afford to cover the costs of the condo when you’re getting no rental income from it? Avoid risking more on your condo than you can pay. That way, you can stay afloat financially even when things don’t go as planned with your beach condo investment return.
Sure, many factors will go into deciding how much to spend on the condo, but you should never base your monthly financial budget on turning a profit with your rental property. Beyond that, consider how much you’re likely to get in rental income from the property every month. If you do your research and determine that the condo is likely to bring a large monthly profit, it may be worth moving funds from a traditional savings account and investing in the beach condo. Speak to a lawyer or financial advisor before making any rash decisions with your investment funds, though.
Consider the actual costs of renting the beach condo, too. You will probably need to clean it in between each renter’s stay. That can get time-consuming if you are doing that yourself each week, or it may get costly if you hire a property management company to do it for you. Maintenance is another expense that can be amplified if you have vacationing families rotating in and out of your home. Also, before making any commitments, know all the details about home ownership fees, costs for parking and utilities you’ll need to pay.
Choose Your Ideal Tenant
You won’t be able to control who is interested in your rental property, but you can decide who you would ideally like to attract to the beach condo. For example, do you want a small beach condo that’s likely to attract couples without children? If so, that will automatically narrow your options considerably when you start looking for condos. On the other hand, if you want to attract vacationing families, you’ll need to look for a condo that has at least two bedrooms.
When you know the kind of tenant you want, it can help you more easily identify which buildings will be suitable for your rental. If you don’t want to allow your renters to bring their pets along, choose a building that doesn’t allow pets. That can immediately cut out the possibility, and you won’t necessarily be the “bad guy” if you point out that pets are not allowed on the property.
Focus on an Ideal Location
When you’re choosing a beach condo for income, choose a gorgeous locale that will entice visitors from all over the world to come and stay. It’s also wise to choose a location that’s not too far from you, if possible. That way, you can always be near your property in case you end up with a bad renter you need to monitor or otherwise need immediate access to your beach condo.
Not only do you need to choose the specific city and beach where you want to invest in a beach condo for income, but you should also carefully consider where the condo unit is located within the building. Does it allow renters to have direct access to the beach when they’re staying in the condo? Do potential tenants have a picturesque view of the beach? These factors may increase the price you pay for the condo, but they can also greatly increase the amount of income you can generate from the property every month.
Also, consider whether the condo is in a good neighborhood. If you’re going to seek long-term tenants for your beach condo, you may need to know things such as whether it’s located in a school district for families. If you intend to rent out the property as a short-term vacation rental, you need to know all the vacation-friendly aspects of the location. For example, determine how close the condo is to local shops and restaurants. Be able to point out where the closest movie theater and amusement park is if you’re targeting families or college kids.
Do Careful and Thorough Research
Do meticulous research about the area before you consider owning beachfront property there. Know how much rental income you are likely to get in the busy season and the off-season. Peak-season rental income may be so high in some areas that it will provide plenty of income to make the rental worthwhile all year. Some vacation property owners only open their condos to renters during designated months of the year. They don’t bother renting it during the off-season when rental rates are lower. If you hope to rent your property only at certain times of the year, you need to be relatively certain that the condo will generate enough income during the peak season to cover the expenses throughout the year while also providing a profit.
Look at how much beach condos are selling for in the area, too. Learn the average cost of a beach house in the neighborhood where the property is located. If you plan on reselling the condo within a few years, it’s especially important to know how much you can expect to make on the sale and how long the condo may sit on the market. Even with your research, always talk to a real estate lawyer before buying property. Unfortunately, many scams target potential owners of vacation homes, and having your own legal representation is important.
Decide Which Improvements You’ll Make
When you’re buying a beach house, determine how much money you are willing to invest in fixing up the property. If you buy a beach condo that’s a fixer-upper, you may be able to get a great deal. However, if you don’t have the funds to do the necessary improvements to get it ready for renters, it can quickly become a drain on your finances. If you don’t have the time and skills necessary for renovating the condo and cannot afford to hire someone else to do the job, only consider condos that are ready to rent when you buy them.
Celebrate Buying a Beach House
Is buying a beach condo a good investment? It absolutely can be. You need to be well-informed and set realistic expectations about the beach condo investment return from the start. Go into the acquisition of a beach condo for income with a full understanding of the depth of such a commitment.
Robin Raven is an experienced journalist and author. She has a BFA in writing from the School of Visual Arts and loves to write about personal finance. She has contributed to USAToday.com, The Huffington Post, The Nest, Grok Nation, and many other publications.