I would recommend looking at it from the back side.
Its not about buying an oceanfront condo and putting it on a rental program.
Take a look at the top rental income properties, filter through those to see what you can buy for the least amount of money, and then filter through those and focus on the ones you personally like.
When you do it this way, these properties usually make the best investments.
The key analyzing if a property is average or way above average is to run the numbers. Its about cash flow. If an on site management company charges 40 or 45 percent and you get 60 or 55 percent of the rates, you just have to compare what it is that you get. That will included linens, towels, sheets, daily house keeping, maintenance ( for example if a toilet overflows it is automatically taken care of, you never get a bill, and don't even know it has happened), advertising, security, local accommodation licensing, and local accommodation taxes are filed and taken care of, as well as accounting, monthly statement, and your check at the end the month.
Now you have to take a look at what you get with some off site rental companies. What are the actual charges? Do they charge you if your guest uses a credit card, or for towels, sheets? Do they charge you for cleaning? Do they nickel and dime you for every Manhattan issue? ( charge to change a light bulb, a broken dish, batteries in a remote, or an overflowing toilet) What if there is a maintained issue and they are not on site. Who quick are they to respond and what damage could be done or you to be liable for?
You have to compare what you get at the end of the day.
Let's say one onsite rental company is very efficient and does a great job with the rentals, and books the unit 75% of the year, but charges 45% and can give you and an example $30,000. gross rental dollars.
Let's say an off site company charges 25% but you pay for linens cleaning, maintained, credit cards, licensing fees etc. they do a good job of renting and get 68% booked for the year, but the way they do that is by lowing the rental rates 20% lower than the on site company charges and you end up with $20,000. gross rental dollars, but still have all the expenses of cleaning etc to pay. (Of course you can rent anything and have 100% occupancy during the year if the rates are low enough)
You just need to put a pencil and paper to it. Or have a pro give you some advise.
Some buildings will have great onsite rental companies and I would say that they are the best option. Others I would say stay with an off site company and your bottom line will be greater. But it is all relative to the building, the area of the beach, what rental companies do better that others in that particular area, and your other options.
You have to consider all options. If you have a Realtor that is working For You, they will give you information on the good, the bad, and the ugly. They will tell you about the options and then you can weigh them against each other.
Its all about the bottom line....Not about how much they charge. Its all about how much you have in your pocket at the end of the day.
The rental numbers and the cost to buy a condo are looking very attractive. It is a fantastic time to buy. Many great deals are currently being made.
Just let us know if we can assist you in any way.
Jerry Pinkas Home Selling Team - http://www.homeguidemyrtlebeach.com/ is your local expert in all your Real Estate needs in the Myrtle Beach Area. Our Team is dedicated to inform our clients on how to be a pro in the local real estate market and avoid common pitfalls that are costly. You will have access to the most comprehensive MLS Listing Service in the area with Free access and with lots of tools for both Buyers and Sellers. Award Winning â€“ Top Ranked â€“ Highly Recommended â€“ Call The Pros - Google or call (843) 222-1926; Put our team to work for you today.
Properties with offsite management the services are a bit more limited. The HOA fee on these properties sometimes include some of the services mentioned above. Cleaning and maintaing the grounds and pool area are often contracted out. Cleaning service is typically not a daily service, but performed at check out.
Volume of rentals is going to be higher at an ocean front resort, but I have found that it can end up to be close to the same gross income generated. An off the beach condo, like in a golf course community such as Barefoot Resort, may not get the rental traffic that a OF may get. But, you are not paying nearly as high of a fee. I think it depends on what your ultimate goal is and how much you would intend to use the property as to what will help accomplish your goal.
I would be happy to discuss this with you if you would like to contact me.
Coldwell Banker Chicora