Surfside Beach, TX (outside Houston)

Hi there- I posted (copied below) for the first time a few weeks back and rec’d no response. I am pretty excited about the market in the area outlined below, but do not have a lot of experience in TX (and am only a notch above novice in RE investment) so would really appreciate any feedback.

Surely there must be some locals or inverstors experienced with the greater Houston area and/or any investors experienced in weekly vacation rental properties? Your thoughts would be greatly appreciated.

The beachfront place (SFR) i purchased for $320K rents for $2K/week in peak season (summer). Here is picture. http://www.beachresortservices.com/Wave%20Runner.htm
With a littl advertising I hope/expect to fill shoulder peak weeks to get to neutral/postive c-flow This appears to be only area on entire gulf coast (FL to TX) that you can still get beachfront for under $500K.

Thoughts, advice, feedback?

Thanks.

Tue. Jun 07, 2005, 01:06 PM »

Hi There. My first time posting. I recently purchased two beach front properties in Surfside Beach, TX Small beach community. www.surfside.org
Gulf front lots are running just over $100K and Gulf Front houses from $200 to $400. There is established and growing vacation rental market there with peak season 11 weeks in summer ending mid-Aug.
I am slightly negative c-flow, buit have a lot of open weeks/winter months to try to market to get to BE and positive.

I have some reference/experience in the FL gulf coast market (Panhandle/Destin in particular). That has been an incredible market over last couple years, but it scares me now. It has gone so far so fast (one example - a place I looked at less than 3 years ago sold for $92K then is now just over $900K. Another; place that sold for $1.4MM 3 yrs ago is now listed for $3.8M).

So, feeling priced out of that market, I have followed the map along the entire gulf coast from bottom of FL around to bottom of TX looking at and for the relatively ltd supply of sandy gulf beaches and submit to you that Surfside Beach is one of the few if only places you can still get gulf front SFR property on a sandy beach for under $500K, especially within an hour or two drive of a major metro area. This area is relatively unknown as of yet much beyond the HOUS metro market, but locals on the ground there made a number of comments to me when there about all of us ‘out of towners’ showing up of late.

There is only so much gulf, and with baby boomer demographic I expect law of supply and demand is on my side. Surfside is just under an hour from Houston Hobby airport and 45 mins or so south of Galveston.
I am curious to get the groups input/feedback/advice on this investment, particularly some of the Houston contingent that likely have some good ‘local’ perspective vs my perch out here in CA.
A couple of tidbits: If you look at this area there are a couple of negatives to be aware of; There are erosion issues in this area, so some apparent great values are perhaps not values at all, with some houses that have lost beach now encroaching on state property with state threatening eviction/demo. I can supply further info/links to those interested. (There are also areas where the beach is accreting (growing) and for my money, those are the better bet, but for those with more tolerance for high risk than me, there could be some values there 9if state does not prevail or beach starts moving other way).
Also, the gateway between Lake Jackson and Surfside is major industrial including Dow Chem and BASF. You drive right through that to get there. I researched polution etc and found nothing concerning, but still wonder about market perception driving right through that.
For what it is worth, I also really liked the Port Aransas area, but that has really taken off (for ex, GF lot that went for $137K a yrear ago, just listed for $425K…), so word is sort of out there. I got so excited about Surfside, I never made it down to PA, but expect still likely some good values there though too, albeit at a much higher entry point.
Anyway, any feedback positive or negative appreciated is appreciated! Thanks.

I agree with you on the lack of gulf property left, eventually it will all be overpriced.
Surfside sounds like a good idea, the only concern would be the ereosion areas. Gulf property is almost sure to go up over time, probably sooner than later.
Sounds like a great investment, especially if you buy in an area with little erosion or at leat an area where the city/govt agencies, whatever, are trying to slow the erosion.
I moved to Texas from South Florida. I don’t pay much attention to CA as far as watching the house prices, I just know they are ridiculous and seem to keep climbing. But , from what I hear CA is much like South FL with home prices off the wall. Ocean lots are in the millions I believe down there, and they will keep rising in price as time goes on. Thats almost assured.
I would really think any oceanfront property would be the same. Good luck with whatever you do.

don’t forget about hurricanes I would account for them also with negative c-flow one bad hurrican can really do alot of damage and not just to the home but to the wallet. Can you cover any repairs while having that negative c-flow?

AC in CA: I’m heading down to Surfside in 2 weeks to look at property…currently invested in Dauphin Island, AL and a few other places along the FL panhandle. Surfside looks really good.

What agent did you use and how did you find the beaches and surrounding areas (not as pretty as eastern gulf from what I have seen).

You might also want to check out Port Bolivar - Crystal Beach, Bolivar Beach, and Caplen as those areas are priced near Freeport/Surfside and get alot of pressure from beaumont and east texas crowd.

Any info you have would be appreciated. lsjijv"at"yahoo"dot"com.

I would also be interested if you find a good agent. I tried to check things out on the net but not much info…

I like this alot I bought my Mom a condo in Gulf Shores Alabama five years ago 3 bed plus den two and a half bath for 75k two blocks from the gulf it is now worth 490k Should have bought ten more! Let me know how this works out!

The real estate sites in these areas are a bit behind the times, so it can be painful sifting through info. For the bolivar peninsula try:

http://crystalbeach.com/newpage.htm

There is a listing of real estate agenices in the far right frame.

For surfside, try:

  1. http://www.brannanrealty.com/Surfside_Beach_real_estate.shtml

I am working with an agent from this company and she has been very responsive thus far. They have several other agents that also have a ton of listings.

Good luck.

Thanks for the replies all. I can probably save interested parties some legwork with some of the things I learned when researching/visiting the area. I am a little (a lot) updside down right now, so will try to post more on that tomorrow, but wanted to squeeze some quick information in.

I worked with Columbia Property Mgt. in Surfside. http://www.columbia-property.com/index.html They are not an MLS agency and are very small (basically mom and her daughter). I wound up working with them almost by accident when the team at Lake Jackson ReMax First Team could not meet with me as planned when I had flown in from CA. They (Columbia) were great and they live there and so really know the area intimately, are involvd in local politics, but again, they are very small and not MLS so not for everybody.

There were a few other off island agencies that I noticed had signs up when I was there. I wrot most down, so will try to post those tomorrow.

Brannan mentioned above is the other on-island agency. I heard both positive and negative; they have a lot of listings.

Quick note to make sure any considered property is inside Surfside Village iteslf (and not ‘county’). Surfside ends a couple/few miles NE of the ‘stoplight’ and properties beyond that are ‘county’, and have insuarnce and essential services issues I think. Also as mentioned, erosion is an issue in the general area so need to be sure to look for areas acreting not eroding (although one strategy is to buy “2nd row” in eroding areas and wait… i will provide link to state of TX info on the 2 year moratorium on thos eproperties that are ‘on the public beach’

If i did not post www.surfside.org before, they have alisting of agencies thatr might include one or two more agancies. Agencies listing is sort of hidden in odd place under ‘places to stay’ or something like that. Mor tomorrow.

ps: In addition to the 4BR house, I just today closed on a FSBO lot in Surfside. A gulf front/beach front lot with the two contiguous lots behind it included. $145K.

I wanted to try to quickly answer some of the above posted questions/comments:

Rental agncy that manages my property is:

www.beachresortservices.com

20% mgt fee 1st yr, 25% threreafter. I bought 4br/3ba property that rents for $2K/week in peak season (summer) and tends to be fully booked in peak. (for those interested, my house is called Wave Runner and can be seen here):

http://www.beachresortservices.com/Wave%20Runner.htm

Columbia (url in above post) also started managing this year, so less etablished, also less expensive (15%?)

Yes, the gulf in TX is definitely not like Destin FL (Desting is carribean aqua marine water and snow white sand). Sand is nice sand, but more traditional goldish/blonde. Water is not carribean like or even very blue.

reoconsultants: I am kicking myself for not buying 10 condos in FL panhandle/gulf shores a few years back too.

lsjiv: Nice job on FL panhandle, Anyone who invested in FL panhandle more than 12 mos ago, has prob doubled More than 36 mos ago, I have seen a number of 10X. I was just there a few weeks ago (South Walton Cty). I LOVE that area but that market is showing early signs of top, possible correction I think.

Crystal beach/Bolivar looks interesting. What does gulf front run there?

Mr Dizzo: great point on hurricanes (with Dennis proving your point). I was told i can get lost rental income for very short dollars maybe under $25/mo i think (but do not have it, you have reminded me to lookinto that).

Here is a TX GLO photo of Surfside. Yellow marks are houses slated to be ‘reclaimed’ by state of TX. If you poke around the GLO site, you can find a list of the houses that TX will be demo-ing and I noticed a few props that are 2nd row now that will have unobstructed front row view when state and land owners work things out.

http://www.glo.state.tx.us/news/archive/2004/events/jpgs/Map2-Surfside.jpg

Will post more soon. have to go now.

AC: Thanks for info, good stuff. I’m heading down to SS and Bolivar next w/e. Did you by chance look at a planned community called sea shore estates (http://www.seahorseestates.com/about.html). I believe it is a bit north of surfside. Also, how about Quintana, just south of SS?

On the note of lost rental income, you can add a lost income clause to most homeowner’s insurance policies. It’s typically one of the main schedules on a homeowner’s policy. Having lost a few weeks from Ivan last year I would definitely recommend it (although hurricanes don’t typically make landfall in tx, especially south of houston).

PS - Beachfront in Bolivar, in the nicer gated communities, is between 150 and 250K. The bay proeprties are also attractive since there is a ton of salt water fishing done in that area, and some people prefer houses they can pull their boats up to.

AC: Just reading through your intial post again…a few notes on Port Aransas: that market has taken off over the last 6 months, as you note. The primary driver is that San Antonio and Austin are witihn a 3 hours drive, and many people in those markets vacation in PA during the summer. The beaches and water are prettier so it’s more of a vacation destination than Surfsidie is with the houston crowd (my wife is from houston and I’ve spoken with a bunch of her friends and family to get their perspective on bolivar and surfside. The general consensus is that those aren’t areas the truly consider as vacation destinations. However, I still believe they can’t go anywhere but up,up,up over the next 3 years).

San Antonio and Austin have close to 2M people between them, so there is a large market applying pressure to those areas. If you have the cash those markets are good b/c they are still grossly undervalued compared to South Padre and the FL/AL gulf. I’m currently invested in a place called Dauphin Island, AL, which this time last year was priced where PA is now. Prices have quadrupled there in the last 12 months. It would not surprise me if that happens to PA. I’m heading down there in early August and will post more info when I get back.

yeah, I really wish I had the time and bandwidth to get down to port A. Kicking myself for not getting down there last year when someone mentoioned it reminded them of FL panhandle 10-20 yrs ago.

Very intereting to hear your wife’s ‘native’ perspective. I sort of suspected the water at the beach might be nicer in PA and am looking forward to getting down there to see for myself. In many ways that may be the better invesytment as it is better marketed and structured as a vacation destination. I am betting on the substantially lower priced SSB area catching up, but that does not always happen. I had researched PA area a fair bit and was merely ‘stopping off’ in Surfside for 48 hours on my way down to Port A when I got so excited about the surfside area that I stayed, bought two props. and never made it down to Port A. Hopefully I can get down there in next couple months. I worked with an Agent I liked very much in Port A. Would highly recommend her. Can’t remember here name, but will get it and post here.

A couple of other interesting areas I would have liked to spend some more time in were the areas just north and just south of Galveston.

The NORTH: Did not make it up there, but woul like to.
Not sutre if it is in your Bolivar, but think so, a development that caught my eye was:

http://www.beachtowngalveston.com/pages/1/index.htm

They made some vague claim to be same design/develop team that did some succesful higher end developments in the SoWal/St Joe FL area. Don’t know much more about it, but it did catch my eye and a lot of people in FL have done extraordinarily well with those.

The general area 5 or so miles SOUTH of Galveston also appeared to have some possibly compelling beachfront values. Only spent an hour there in the Indian Beach/Jamaica beach area, but some high end homes, and still many beachfront for median $500K.

Agent I stopped in on there I liked. Bit of an oddball, but good guy/liked him and got the feeling he would really work to help me.
His name was Kip, owner (sole employee?) of www.deemrealty.com As asidebar, he is looking for investors for Costa Rica where he used to live for the record.

Seahorse estates: I think there may be problems with that one. That is one of the ‘county’ properties. This is all second hand from parties who wanted to sell me other stuff, so I could be very wrong and do your own research, but was told because it is not in surfside, fire/police/essential svcs etc. are an issue there and also that insuarnce is insanely high (“$20K/year” and ‘if you can even get it’ was mentioned). There were two houses built there when I was there, and omebody mnentioend they were grandfathered or something at lower ins. rate that wopuld not be avail to new buyers.

Agent I liked a lot in Port A, she been there 12 years:

Linda Johnson @ Mark Gross RE:

http://www.wesellporta.com/

I was reading this thread and although I’m not an investor, I am someone that is looking for a vacation rental around the Houston area.

I wanted to let you know there is a market for the “outside Houston” area that you might be overlooking.

I am a native Houstonian and relocated to Abilene Tx ten years ago. Both my family and my husbands’ family live in the Houston area. We enjoy visiting with them, but prefer our privacy. We also have two small dogs that travel with us (this elliminates the hotel option). Renting a cabin or beach house for a week, 3 or 4 times a year is very attractive.

Most people in Abilene, Tx. vacation in Ruidoso, NM. However many people in Abilene also have family living in Houston and visit them often.

One last word… we don’t have a beach near Abilene, but we DO have 3 universities and an Air Force Base. The drive from Abilene is about 7.5 hours.

Hello MsLance.

Thanks for the Abilene/former Houstonian perspective.

Summer is peak season with strong demand but I am interested in filling in more shoulder and off peak weeks to get to neutral (or better yet positive) cash-flow. This could be a good market for that maybe?..
Do you have any suggestions or are you aware of any ways I could (ideally @ low/no cost ) advertise/communicate the ‘weekend/weekly beach house rental opportunity’ for greater Houston visitors in the Abilene area who might want to visit Houston area as mentioned? These homes can be a great ‘family retreat’ options as well - my house is 4BR/3ba that has lots of beds sleeps 17-20, (and a few others in the area even more BRs/capacitiy).

Not sure if Surfide Beach is too far (~45 mins drive from HOBBY) for what you are looking for, but wherever you are looking www.vrbo.com is a great place to look for “Vacation Rentals By Owner” (hence “VRBO.com”) in general and many are pet friendly. Also sometimes www.craigslist.com is good resource too, although a bit more spam to filter through there.

I have just (yesterday) placed my Surfside beach house on the vrbo site and has availability calander/rates at web address below if you want to check out.

http://www.vrbo.com/67390

Thanks again. /AC

Your probably right, Abilene may not really be a good market for off season business.

But for what it’s worth here are a couple of brainstorm ideas I’ll share.
First, it seems logical to assume off season visitors are not there for the beach and sun. Unfortunately, when people are not interested or focused on a beach vacation they rarely pay attention to “beach” vacation sites advertisements. You might consider minimizing the beach reference during off seasons. Of course it is still a selling point, but if they immediately brush off the ad because the trigger in their head says… “beach? No, that’s not what we are looking for.”, you just shot yourself in the foot.

In off season times, you will need to price the house competitively with a hotel.
I’m guessing your target market will be people around Houston that are holding special events which will bring visitors from out of town. Weddings,50th Aniversary Party’s, Rodeo’s, etc. Heck, this may sound terrible, but even funerals.
Direct advertisement to that group of people would probably be costly and unrewarding. However, you might be able to target large companies and offer a “benefit” for their employees. Again, I’m no where near an expert on this subject so I may be totally clueless. But it seems to me you might be able to make a deal with some of the larger companies around there… for example, get the company to pay half the cost so their employee only pays the other half. The company gets to add the perk to their benefits list. I don’t know your field well enough to know how you can play with this idea and come up with something that works. But it might be something to toss around. Houston is a big city and competitive company benefits and perks are important.

Hardin Simons University offers a couple of similar benefits for their employees. Note, I said “similar”. Below are links to information on their programs.
http://www.hsutx.edu/admin/hr/Employees/LakeTravis.htm
http://www.hsutx.edu/admin/hr/Employees/Ruidoso_instrs.htm

-mary.

lsjiv- How did your trip to the coast go? what did you think of Surfside Beach and the other areas you looked at? Find anything to buy?

It was a good trip. Bolivar/Crystal Beach and Surfside both showed well. Ssurfside, especially, given its quaintness and small town feel.

There’s not much good for sale in either market, but evidently there is still room to negotiate as houses come on the market so it’s a great time to be a buyer (i.e., market showing signs of heating up). I’m just waiting for a good property or two to come on the market…

is there any area around there have any foreclosures?