Just because something is priced under market value, it isn’t necessarily a bargain. By finding something on 30A that is affordable, valued at more than its initial cost, and that has high investment potential, you can guarantee you have a real beach bargain.
Bargaining for 30A Many clients love HGTVs fantastic programs because they offer insight into not only buying and selling but also decorating as well as what’s out there. The network showcases real estate all over the country as well as on the gorgeous stretch of the Florida Gulf Coast best known to locals as 30A.
Since a segment on HGTV has to be wrapped up in half an hour to an hour, many clients don’t realize how complicated it is to go from that initial meeting with a realtor to signing the papers on a beautiful beachfront property that one could call a “bargain”.
What Makes a Bargain?
The word bargain itself is subjective; a bargain to one is not necessarily a bargain to another; however, it can probably be universally agreed that a bargain is a property that is procured at / below market value or that is considered to be worth more than was paid at the time or purchase.
So, if you buy a beach house in Destin for $1.2 million and that home is valued at $1.5 million, then you have a bargain. Ideally, when you get ready to sell, then you will be able to gain from your investment. The ability to profit is the implied benefit for a bargain.
That said, it is important to keep in mind that part of being a bargain hunter means being able to see beyond the present. In other words, look into the real estate future (or ask your estate agent for their opinion if you are not sure) and make a decision on what will be a bargain in the future. (It is important to note that unless you have expertise in this area, it is highly advised you speak with someone with experience in this area before making any major financial commitments.)
From Bargaining to Investing
While resale value is one aspect of a bargain, the ability to draw income is another. For example a condominium in Panama City might be procured for $500,000 and have a resale value of approximately the same amount; however, if the mortgage on that property is (or would be) $2,500 a month and the property yields $1,000 per week during peak season as an investment property, then the decision to purchase the property can be justified.
Determining if a Property Has Investment Potential
Figuring out if a property has investment potential requires talking to someone who has access to the property’s background information. Even if the investment is a bargain (i.e., is listed below market value), the seller will most likely still make any investment potential available to motivate the sale of the property.
If the seller doesn’t make that information available, then check with your realtor and see if you can get the specifics. What you’ll want to know are:
- What is the most the property has ever been worth?
- What is the least the property has ever been worth?
- What is the longest period the property has gone without renters?
Once you explore these facets of the property’s potential, you can make an informed decision about your ability to afford the property regardless of its potential.
In other words, you might find a delightful beach house in Rosemary Beach for half a million under market value and with the potential to be rented six months out of the year; however, if you cannot afford the lease on the home for the six months that the property is not being rented, then though it is a bargain, it is not a bargain for you.
Those interested in finding a beach bargain investment property should talk to their realtor. Find a realtor familiar with the community you wish to invest in as they know what sells and rents for what amounts; they have the most ready access to the amount of traffic the area sees per year, and they can best advise on what property is best for your needs and budget.
There’s no place on the Florida Gulf Coast like 30A. Sunny, sugar white sand beaches and charming, playful, romantic communities abound. With everything from picturesque beach cottages to chic condominiums, there’s no shortage of beach bargains for investors. So, if you want to get invested on 30A, contact local real estate expert, Melissa Clements.