Blake and I have been talking about purchasing an investment property for a long time. It’s always been an interest to buy a fixer upper that we can make into a short term rental. It’s been a long process, but we ended up picking a property in Fripp Island, South Carolina. Fripp is right off the coast of Beaufort, South Carolina. The best way to describe Beaufort is, it’s a mini Charleston, South Carolina 20 years ago. Beautiful historic town without all the tourists and traffic.
The home that we ended up purchasing was built in the late 70’s and a family had owned it for the entire time. They were able to enjoy it for decades, and we feel lucky to be able to now do the same. I don’t know if you have ever been to Fripp, but it is definitely a special place. If you enjoy nature, riding around on a golf cart, and a laid back vacation on an island, with access to a really cute historic town, this is a great option.
Our goal with this house is to get it up and running as an Airbnb/VRBO by November. In our case we are doing a couple of updates to the property. Blake makes fun of me because I told him we would just “do a few”, and that has turned into new floors, new bathrooms, new kitchen, paint, and a few more things that aren’t as fun to talk about. I mean we are really doing all the things, and I can’t wait to share when we are done.
Choosing a location for our investment property took a lot of time and energy. I want to share some of the factors that helped drive our decision.
Things to consider when buying an investment property at the beach:
- How often do you plan on personally using it?
- If you plan on using it often you want to make sure the property is closer to your primary residence and easy to get to.
- Do you plan on managing the property yourself?
- Property Management can be a challenge if you live far away from the property.
- How much do property management companies in the area charge?
- This can be crippling if you are using the rental as secondary income, make sure you do your homework here.
- How close is it to the water?
- Vacationers want to be near the water, or have easy access to it. (ie. golf cart)
- How much is flood insurance?
- You want to make sure that all of your costs with the property don’t put you into a deficit if you are trying to turn a property, make sure you understand how much the flood insurance is going to cost.
- Is there a history of flood/water damage on the property?
- This is really important so that you can understand what you are up against when you take ownership of the property.
- Are there activities/restaurants to do things year round?
- If you are looking at this as a secondary income source you ideally don’t want your home sitting around vacant for half the year. Try to ensure that you will have income at least 70% of the time.
These are the main things we were thinking about when we landed on Fripp Island. The biggest hurdle for us was just getting an understanding of what our monthly output is going to be and using the 70% occupancy rule to understand what our potential ROI could be annually.
If you are in the market, good luck!