Destin FL vacation home investment is a unique getaway paradise. It can be a solid investment if you plan to rent the vacation home or transform it into a hosting event venue. Before you visit Destin Florida real estate agency, there are several questions to consider.
How much budget is essential?
This is the first question that comes to mind when you visit the destinflorida.com blog to check the different types of property for sale. Remember, you will need at least a 20% down payment for purchasing the investment property. There are several local lenders in the Destin region to approach for your financing needs. The DestinFlorida blog offers the best resources to obtain a great deal on a condo or a townhome in Destin or you can choose beachside condos in Walton Beach or a house in Sandestin.
One important thing to remember is to buy a rental property you can afford. Even if the vacation home has the potential to earn income, never count it to pay the mortgage. Factor costs like taxes, utilities, insurance, maintenance, and property manager to keep the condo or vacation home in tip-top condition.
Is a single-family home better than a condo?
Investing in a vacation rental home means the property is mostly for personal use, while you will rent to offset your expenses. Besides, you may desire to earn profit from this investment. If you desire to increase rental income, then choose a large house in Santa Rosa Beach or Seacrest or Miramar Beach. It will allow accommodating more tourists and earning high rental income.
If you adore sitting on your balcony and watching sunrise and sunset, then invest in a beach condo. On DestinFlorida.com, you cannot just find real estate deals but even vacation rentals, weather situations, upcoming events, and book activities directly from the platform.
Which is the best location for property investment?
The best location for property investment in Destin Florida will depend on your budget. In 2021, the median listing home rate in Destin FL is $575K. Among the neighborhoods, Crystal Beach is costly with an average home price of $1.2M, while Indian Bayou is economical with a price of $210K.
If budget is not an issue, then look for a beach community that holds local activities and amenities that suits your interest and personal style. Miramar Beach and Destin are loaded with activities like outlet malls, fishing charters, dolphin cruises, golfing, go-karts, parasailing, and restaurant galore. Rosa Beach is on the quiet side with plenty of luxurious dining options and less noise or crowd.
The best location is the one that makes you feel comfortable and offers convenience. For example, if you adore organic food and the store nearby sells only packaged food then it is an inconvenience. Your desired vacation rental has to offer convenience which is a good selling point for potential customers [guests].
How much income can you expect?
When you are investing in a Destin FL vacation rental property there is a need to perform a detailed cost analysis. In case the house or condo you are interested in buying is operating currently as a vacation rental then you can obtain the information about the real rental income it produces from the realtor.
If it is not, then the realtor will give you an estimate from reliable property managers around the area. You gain an accurate idea of the property’s potential based on occupancy rates and average rental rates for the same size rental house or condo in that location.
The revenue potential of a condo rental in Destin will depend on the property’s age, location, and condition. According to a study, top-floor 2/3-bedroom gulf front condos including appealing amenities like tennis court, whirlpool & pool, clubhouse, and grilling station are capable of bringing $50,000/$67,000 annually. In Miramar Beach, top-floor 2 bedroom condos with similar amenities grossed at $51,390 annually. In 30A, a top-floor 3-bedroom unit receives $41,650 in gross revenue.
What’s covered in the HOA dues?
The HOA [Home Owners Association] manages the new condo community after 90% of homes in the building are sold. The HOA has the authority to enforce CC &Rs [Covenants, conditions & restrictions]. The HOA dues usually cover most of the insurance and utilities, when you buy a condo.
For example, the majority of condo buildings have their dues covering sewer, water, cable, trash, amenities upkeep, Wi-Fi, building insurance, pest control, landscaping, and on-site management. Owners will pay their property tax, while HOA dues cover the common area taxes.
Does HOA cover natural calamities like floods, wind, and hurricanes?
If you are planning to buy a home in a tornado or hurricane-prone area like South Walton beach, then ensure that HOA offers catastrophe insurance. If it doesn’t then you will look at a huge sum to pay against damage repairs in the common areas.
Do you need to hire a vacation rental property management firm or DIY?
If you are a busy person then hire a property manager. They have team experience to handle every aspect like attending calls, making reservations, as well as supervising the property cleanliness, repair, & maintenance.
On paper, vacation management sounds simple but it fails to mention that your guests can get locked out at midnight or the AC breaks down suddenly, or the plumbing system malfunctions. The property manager has good relations with emergency service providers, which means the issues of your guest’s experience are resolved as soon as possible. The property management firm offers 24/7 support to rental guests. You can relax as your rental guests are taken care of properly.
If done correctly, your vacation rental home will generate profits as well as enjoy tax benefits. You can deduct items like property management fees, utility costs, mortgage interest, occupancy taxes, etc. from your taxes. Never jump headfirst without planning. Before, you leap double-check to see if the investment decision is worth it. Well-prepared investors can find that their buying decision of a vacation rental property in Destin FL will pay off in the coming years!