At first glance, it looks like it will pay for itself and give me a vacation home at the same time.
Besides Maintenance fees, insurance, and taxes, what other expenses should I look at?
What is the best way to prepare for appliance replacement, etc. costs?
Besides the occupancy rate for the past 12 months or so, and the charges for those occupants, what other things of that sort should I look at?
This will be my first Investment purchase, and I plan on using it, but want to make sure it pays above the costs of ownership, so any and all advice will be eagerly devoured!
By the way, If I plan to go in with another person (or two), what type of setup should it be? I am thinking a LLC, but am not sure. Ideas??
There of course is maintenance which may be high. Carpet is a big expense too and vacation property is not taken care of by party goers etc. My dad owned two condos at the beach in Corpus Christi that he thought he would buy and use as a free vacation home. After loosing 5 grand a year for several years he sold them both finally for a big loss. There was maid service too he had to pay as well as large vacancy. The rental agency also charged large commissions on renting the units each time. After driving back and forth to Dallas he did not even use the vacation aspect. He did plan on living in one when he retired but he can not afford to retire because of the stock market crash.
Be careful. My dad wishes he had never seen these two units
The maintenance fees are locked in as part of the management services, as well as the rental fees, etc. I am trying to research the previous vacancy and accupancy for the past year as a benchmark, and get straight answers from the manager. He keeps passing me off to a real estate agent, but I want property information BEFORE I talk to a RE agent.
I am just worried I am not asking the right questions when I DO get the right answers.
Especialy if I have to give in and talk to an agent. Being out of town, it is hard to feel I can trust what I get told by someone whose only interest is how much commision he gets when I buy.
Mike,
Is it a time-share? No? Are you sure? If it happens to be a time-share, then it’s a whole new game with a completely different set of questions.
If it’s just a pure vacation setup, then it’s a bit easier, but probably still not a wise decision for an “investment”. I have very little experience with this as I’ve only looked at a few, but if you want to make an investment, why not do it on your own?
I’m a landlord and I have a real difficult time seeing how this property will “pay for itself”. If it pays for itself, then why is it for sale?
Are you buying from a previous owner or from the hotel?
Why would you want to mix other parties in this transaction?
How many units are for sale? How does this one compare? What’s the percentage received for resale?
I’d look long and hard before jumping on this one.
It is located in a beachfront hotel where the rooms are rented out as standard hotel rooms when the owner is not there. When the owner IS there, then they use it. From what I understand, (still researching this) the rental payments go to the owner, who then pays the taxes, maintenance, insurance, etc. If the rental income is greater, profit, otherwise, loss.
I am not looking at this as a great income opportunity. My family tends to go down there at least twice a year. We would go more and stay longer if it was cheaper, so I am considering it.
What I am hoping for is a situation where the annual income (since monthly would vary) that pays for the condo and it’s related costs. I am hoping to see a little profit, but not expecting this to generate much beyond expenses after figuring in annual replacement costs, etc.
The idea is to get a vacation home free, anything else is a bonus.