Purchasing and owning real estate investment properties along Hwy 30a in South Walton County isn’t as complicated as you might think, however it is critical that you find an agent with a vast knowledge of the local market and understands how to determine cost of ownership, rental income and net income .. Most investors are looking for around an 8% return or around 5% if there is some appreciation in value which we are beginning to see once again. Gone are the days when buyers could find “steal deals” due to the collapse in prices here but opportunities are everywhere today because prices are on the rise. Buying property at distressed prices in a declining market meant your purchase would be worth less over time but today that same purchase is now going to be worth more and investment purchases are on the rise as well !
Homes On 30A prepares pro forma operating projections for any residential property that qualifies as a rental property. We can give you a close estimate of your operating expenses, have one of the rental management companies that we work closely with, give you an estimate of what gross rental income to expect, include principal and interest payments if a mortgage is involved and arrive at a solid estimation of what you can expect as a return on your investment. This service also allows potential buyers to pinpoint their price point which is critical in determining what to look for.
Other considerations that your Homes On 30A agent will assist you with is your homeowners insurance coverage. When purchasing a second home or condominium, there are rules and regulations that insurance carriers will require depending on the use of the property. Rates for coverage will vary for buyers who are interested in placing the property in a vacation rental pool vs personal use or both. Purchasing a property under an LLC is another consideration. Lenders will also have requirements as well as rates depending on how you intend to use the property.
Once your completed income/expense projections have been made, we recommend that you check with your CPA or whoever handles your taxes and that they have all the information required to guide you in your purchase from a tax standpoint. As always, we are available to answer any questions you might have and will work with any financial advisors you might have.
In summary, a good “rule of thumb” to remember is that if you are planning on financing most of the amount of your purchase, your rental income will cover all of your operating expenses, property taxes and insurance as well as some of your mortgage payment but not all of it. The only investments that will “cash flow” on their own are all cash purchases. Having all of the information that we are willing and able to provide you will make your decision the right one for you.
Contact one of our 30a real estate specialists today.