Emerald Coast Investment Property 101

Ready to start building your Beach Rental Investment Empire? It can be hard to know where to start if you're new to the process of purchasing a vacation rental for. Here are a couple of helpful tips for potential buyers of vacation rentals for investment. This information is specific to the Emerald Coast of Florida, but some aspects will apply to other areas as well.    1) You can hire a Property Management company. There is an abundance of options available from Destin, FL to Panama City Beach, FL. How much is property management? Each company will have variations in its pricing structure and services, but in general, you can plan on 20-30% of your gross rental income going to the Property Manager.   2) You can self-manage through an online service (such as Airbnb). You'll save in management costs, with your main costs being processing fees for the online service. Cleaning fees are usually passed on to the customer at the time of booking.   3) On the Panhandle of Florida, our peak season is Memorial Day to Labor Day. The highest rents can be charged during this period. Higher rents can also be expected around major holidays (New Years, Christmas, Thanksgiving) and Spring Break season. April, September, and October usually command lower rents, and the winter season will often be slow with the exception of snowbirds, who pay considerably less rent, and often stay for a month at a time.   4) HOA fees can impact your bottom line. Be sure to factor in the community Association fees. In resort communities with things like pools, tennis courts, and beach acesss, it isn't unusual for these fees to be $500-$900+ dollars per month for condos. Detached single family homes come at a higher price point, but the HOA fees tend to be much lower.   5) Rental projections can give you a rough idea of future income, but rental histories are more reliable.  Also note how often and during what season the Owner used the property, as those weeks would not have produced any income.   6) Proximity to the beach is EVERYTHING. Rentals still rent well if they're within a short drive to a public beach access, but you'll want to aim for property south of SR 98. The closer to the beach, the better. The exception to this rule is Sandestin Resort.   7) Not every community will allow short-term rentals. Be sure to ask if there are restrictions of this type when checking out a property.   The bottom line: There is much to consider when purchasing a short-term rental investment property on the beach. With your investment goals in mind, contact Julie Endsley at Gulf Realty 30A for expert guidance on the best way to reach those goals. The experienced Agents on the Endsley Team are your local investment experts, specializing in working with out of town buyers for a smooth and profitable experience.  Happy investing Friends!   - Julie

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Condo Mortgages: What You Need to Know

  Hey there, folks! If you're considering buying a condo instead of a house, you're in for some exciting perks. Condos are a great choice for those who want a more manageable living space, easier maintenance, and a more affordable option. Plus, as noted by Bankrate, being close to all the action in the heart of the city can be a major draw for professionals who like to be "in the thick of it." But hold on a sec! Condo mortgages come with their own set of complexities that you need to be aware of. Let us break it down for you so you can make an informed decision. First things first: pre-qualification and pre-approval. Just like with home mortgages, you'll need to go through these steps. Condo mortgages usually come in the form of conventional loans or FHA loans. According to Investopedia, conventional lenders typically require a FICO score of 620 or higher, while FHA loans can accept a minimum score of 580 for a 96.5 percent loan. And don't forget, you may also need to show a favorable debt-to-income ratio. But it's not just about you, my friend. The condo's homeowners' association (HOA) also plays a role in the mortgage approval process. Lenders want to see that the HOA is responsible and financially sound. They'll check if the members pay their dues on time, if the association has sufficient insurance coverage, and if they maintain reasonable financial reserves. Now, when it comes to FHA-approved loans, they have some stricter requirements. For example, MortgageReports.com explains that the FHA may insist that at least 70 percent of the units in a new construction have already been sold. If there's an association involved, it may need to confirm a minimum of 50 percent occupancy. So, it's important to consider these factors before diving into the condo mortgage world. Let's talk about warrantability. If you're going the conventional loan route, you need to understand Fannie Mae or Freddie Mac's criteria for a "warrantable" condo. U.S. News & World Report notes that a warrantable condo meets specific requirements set by these organizations before they'll buy the mortgage. They look for completed construction, a majority of owner-occupied units, on-time HOA payments by at least 75 percent of the residents, and more. But what if you're eyeing a non-warrantable condo? Well, that can complicate things a bit. You may need to explore alternative mortgage financing options. Smaller to mid-sized lenders often offer more flexibility in these cases compared to the big banks. However, MortgageLoan.com cautions that non-warrantable mortgages often come with higher interest rates, larger down payments, and less competitive pricing overall. So, weigh your options carefully. Here's the bottom line: navigating the world of condo mortgages requires expertise. It's not just about you doing your research; it's also about finding a mortgage broker who specializes in condos. Trust us, having an expert on your side can be the difference between finding your dream residence and facing nightmarish obstacles. So, if you are considering a condo purchase, take the next step and talk to a knowledgeable mortgage broker today. They'll guide you through the intricacies of condo mortgages and help you make the best choice for you. We have had the opportunity to work with several local mortgage brokers that specialize in helping folks finance their condo purchase. Contact Us and we would be happy to send you a list of those mortgage brokers! 

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