Ralph, Home Buyer in Nashville, TN

Cash flow on Rosemary rentals?

Asked by Ralph, Nashville, TN Thu Aug 7, 2008

Wondering if anyone has a good enough feel for the Rosemary (proper) rental market and costs to ballpark the following: Assume I buy a 3 bedroom house on the north side of 30-A for $1mm (several available it appears). How much am I likely to net if I put it on the rental program? Having a hard time getting a straight answer. Seller's make the market out to be pretty strong rental-wise. But they can't cash flow or they wouldn't be dropping in price. On the other hand, rental rates seem to be staying awfully high given how much is for sale down there. Trying to gauge is the rental market will offest the costs enough to buy something I will use personally at most 2 weeks a year. Chime in if you think the prospects of a cash-flowing vacation property are substantially better elsewhere on the panhandle. I'd have to pay the ridiculous nonresident property tax.

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Ralph, I know Michael Henderson, and he is extremely knowledgeable about crunching the numbers on rental properties in Rosemary Beach. I would highly recommend working with him and his partner, Katie, if you are considering Rosemary Beach. They also have some great listings in Rosemary, and would be of great benefit to you. Katie is extraordinary in her knowledge of the rental market, as she is also a property owner and manages her own short term rental property. Work with them, they are the BEST!!
Web Reference: http://www.MykeTriebold.com
2 votes Thank Flag Link Fri Aug 8, 2008
On any purchases made today, you will not cash flow unless the property is mostly paid for. With 20% down the only way to cash flow in an area like South Walton is to find some of these bank owned houses north of Hwy 98, and rent them long term, and be the landlord, rather than hiring a mgt company. However, doing so, you buy yourself the job of landlord which in many people's minds is a four letter word, especially if you are a long distance landlord.
1 vote Thank Flag Link Fri Jan 15, 2010
Most homes in the mil range will not pay for themselves unless you put down 30% or more The rentals on 4 bedroom with a pool(a Must) on a rental program might hit 40K with 30% of that going to the rental management company, you can add to the rentals by 1) doing yourself 2) refering to the rental company from VRBO sites. Mostly your rentals will cover taxes, insurance and partial mortgage but cash flow or break even is rare unless you manage yourself. The other things that help are the tax breaks.

The rental market might have increase but the number of homes on rentals has also

The best place is on Crystal Beach in homes in the 500-1 mil range you can find a link to crystal beach on http://www.destincondosandhomes.com
1 vote Thank Flag Link Thu Aug 7, 2008
I have been a visitor renting in RB for the last few years. I have been able to negotiate some really sweet rentals, via sites like vacation rental by owner dot com. I have also looked and looked at buying, but even with no rental agency split the taxes, insurance, maintenance and HOA fees will kill you! The only way it works as an investment is if you really time the bottom of the market and then get the benefit of an appreciation bounce sometime in near future?
0 votes Thank Flag Link Thu Nov 12, 2009
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