Buying a condo in FL as an investment?

We’re in Panama City for a week and the idea to buy a condo as an investment came up for conversation.
On the surface it seems like a no brainer. We’re spending just under $2,000 for a week. If this condo rents for that from March through September, you’d make more than enough to cover the mortgage and a maintenance fee of ~3-5%.
Normally I’m very conservative with money, but this has me/us thinking.
Do any of you guys have a vacation condo that you rent out? If so, where? What are the pitfalls? Obviously, the rule of location, location, location still applies. Hot spots like Panama City Beach have been vacation go-to places for decades. I’m not tied to PCB; other areas on FL are nice vacation places too.
Thoughts, all knowing beeb?

 

My GF had a house on 30A (literally) in Rosemary Beach. I think they had to have 16 with 12 of those being peak summer weeks rented to cover expenses. She said the biggest issue was getting the company managing the rentals to push it for the weeks it wasn't booked. Also painting every couple of years, furniture around every 5 years, bedding probably yearly, random missing kitchen things

"Rental companies will give a projection of income but it's always inflated. Not a great time to buy - sellers market."

Her, now her ex's, beach house has gone up about 400k in value since Covid - value now is around 1.8M and rents for 8k a week in summer..

 

Wife and I stayed in one in Destin and came home with the same idea. We almost got it done but the deal fell through right before Covid hit so we took that a sign from God to leave this alone for a little bit….could have been pretty bad for us. You’re more than likely going to have a better experience than we did. We hooked up with a local realtor and the company that handled our rental to get some valuable information.


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Yeah, it's not florida but Condos in NoVa are tough sells right now. Maybe it'll bounce back after we fully get out of Covidland but people were afraid of being packed in tight and were all trying to sell. Townhouses and single families sold within hours of the rumor of them hitting the market. Condos took months.

Remember, with condos you have all those "fees" that come along with them. Maintenance fees, HOA (or whatever they are called in a condo), parking and all that shit. Dude I knew in Arlington was paying almost 50% of his mortgage in fees.

 

Anecdotal - prices down there are going through the roof and rentals are booked solid and way above average. With Covid people realized they didn't need to stay at there primary house and many folks moved to their vacation house for at least summer if not permanently. Available units are way down as a result. Pre Covid would have been the time to buy as odd as that sounds.

 

buy a timeshare

 

I would be looking closely at the covenants of the property. Many exclude short term rentals. I did a deal with some inlaws where we had a 3 level townhouse type unit with a community pool but it wasnt on the Gulf side and the views were meh. Then a Canadian family moved next door and gave us a generous unsolicited offer which allowed us to parlay that into a partially finished high rise on the Gulf not too far away. We got a 3/2 on the 5th fl...for $225k... no money out of pocket. Sold it a couple years later. In our case we did ok with the maintenance fees... the new owners got a juicy one for property grounds a few months after closing.
I would not have trusted any local firms to handle managing it for profitability.

 

I'd rather just book a vacation for where I want to go than be tied down with the hassle of owning a second "home" and the associated costs and hassle. I keep reducing what I own and it has definitely made life easier and less stressful.

 

I've been trying to buy one for months due to a 1031 situation. Every condo we have looked at prohibits short terms rentals. Some people still do it, but I'm a bit of a rule follower.

 

I'll sell you a WHOLE House in town about 10min from the beach bridge...with extra 24x24 garage, in a really quiet neighborhood...it ain't cheap..but no HOA, and not in a SubDivision.

 

Condos are generally a shitty investment. They don't go up in value like sfh

 

Condos are great, if you don't mind a bunch of people controlling your property and pocketbook.

Parking lot needs repaving? $8,000, please.

The biggest problem I saw in FL is that people move there for cheap living, buy a condo and consistently vote against assessments, so they can continue to live on the cheap.

Then, the hurricane comes and rips the roof off the building(s). The insurance reserve is underfunded, so they can't cover the deductible.

The roof doesn't get fixed, the condos fill up with rain, mold happens and your investment goes to zero value.

 

Florida's full up anyway.

 

nah uh.

I was in Key Largo last week. Plenty of space.

E'rryone come on down. Also make sure you vote the same idtios into office that ruined where you came from. People love that.

 

I'd invest in a REIT before buying a single residence elsewhere.

Real estate investment trust - Wikipedia

 

I live in Treasure Island(St. Pete/Clearwater), and am a realtor and investor. I own a triplex here on the island, and am in the process of buying a duplex here as well. I also own several rental properties in Pennsylvania. There’s definitely money to be made in real estate all over Florida. Condos are a good option if you’re going to be an absentee landlord. My island here is filled with condotels, who will manage everything top to bottom for you, but limit the amount of time you can spend there. Most regular condo buildings will have some sort of rental restrictions, so people aren’t having different people in there every weekend. Shoot me a pm if you want to have a conversation about options.

 

Love Treasure Island. We stay at The Palms right beside the Publix on Gulf Blvd. whenever we come down for Bucs games. Great little area and close to everything fun. We'll retire somewhere close to there to a spot with a boat lift out back.

 

I’m with you on the boat lift! I’m not there yet, but hoping within the next couple of years. For now I’m just happy to be a block from the beach!

 

We've got some property that we'd like to sell, but we also are looking for someplace we'd like to buy first, with a 1031 exchange, and are finding the same thing.