The past four years have been a roller coaster ride to say the least. Some of the things we have experienced include:
§ The covid wave, with many people permanently moving here to work remotely.
§ The rise of AirBandB, which created a shortage of available housing for seasonal workers.
§ Extreme drop in residential inventory creating an imbalance between supply and demand.
§ Unprecedented growth in property values, with some areas experiencing a 105% increase in median sales price.
At present, we are beginning to see some reduction in market pressures mainly due to the rapid rise in mortgage interest rates, which recently topped 8% for the first time since the year 2000. The higher borrowing rates have reduced mortgage applications to the lowest level seen since 1995. Even with this downward pressure, there is light at the end of the tunnel. Our inventory remains low and there is still considerable demand. The saving grace for sellers is cash buyers. Over 51% of September sales in the Northern beaches have been cash purchases. This includes the Corolla, Duck & Southern Shores markets. Prices have held steady; however, we have seen an uptick in price reductions in recent weeks.
Globally, we are experiencing tremendous uncertainty in financial markets as well as geopolitical unrest. Four of the five US regions have already experienced Year-Over-Year sales declines. These factors could lead the OBX housing industry in the wrong direction. It is a difficult thing to accurately forecast, but I have been an active OBX broker and investor since 2000 and have lived through numerous market fluctuations.
While we are predominately a residential market, the US commercial market trends can be a bellwether in forecasting the overall real estate market. The Mortgage Bankers Association (MBA) has forecast Commercial lending to fall 46% this year and the overall transaction volume expected to fall 65%. Personally, I believe this will be a significant drag on all housing metrics, across the board.
Most of you are probably very happy with your OBX home and have a very low interest rate on your mortgage. It gives me great pleasure in knowing that I might have helped you achieve that goal. That is always my aim. However, I also realize people’s goals change whether it be a change in personal situations or simply investment objectives.
Should you want to sell your OBX investment, there is still an attractive window to accomplish this goal. As previously mentioned, our overall inventory remains low indicating we are still in a seller’s market. The overall Days on Market (DOM) for the Northern Beaches remains relatively low. The average DOM in 2023 is 64 days, however that is up from an average of 31 days in 2022. There is no question that the exponential rise in interest rates will put the brakes on our market, but cash is still king. When there is uncertainty in the financial markets, like stocks and other securities, investors tend to look to reallocate to more tangible assets, like real estate and precious metals. We are definitely seeing investors move wealth into our market in the form of cash. In September 2023, OBX cash transactions in residential real estate totals were over 53 million dollars.
What does all this mean?
I am a student of data and try to offer sound guidance based on the market analytics and reading the tea leaves. Based on the data, I believe we are in the midst of a unique period that still offers sellers necessary market advantages. If you decide selling helps you achieve your investment goals, there is still time and can be done with the right marketing, pricing and exposure. With 23 years of experience, I can help you take advantage of this moment of history.
If you are curious as to your current property value, please scan the QR code with your phone to be taken to my Instant Property Valuation tool. It is also a great way to keep track of property value trends. In other words, check it often to follow which way your property value has changed. This tool can also be found on my website.
Those that know me, can attest that I am not a “hard sell” guy nor am I one that would try to create panic selling. I simply offer guidance based on experience, data and always striving to help my clients make sound investment decisions. That is my goal here. If you would like to discuss your situation in more detail, I welcome the opportunity and would be happy to jump on a call at your convenience. I look forward to speaking with you.
If you are new to the world of Outer Banks Investment Property, we have written a short overview that you may find useful. You can see that HERE
Stats through September 2023
Interested in the value of your home?
Click HERE for our INSTANT VALUATION Module
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“Seas the Day” and seize the opportunity to own this classic 15 bedroom, 10,000 s.f. home! This sleek and stylish investment will make you and your guests happy while on ...
Listing courtesy of Carolina Designs Realty.
Four levels and over 10,000 s.f. of carefully designed living space make this home stand out! With 15 bedrooms, plus a bunk suite, nursery, office, media room, theater, g...
Listing courtesy of Carolina Designs Realty.
A sensational MUST-SEE updated home that perfectly blends chic industrial-style elements with modern yet comfortable furnishings and designer finishes to create an extrao...
Listing courtesy of Twiddy And Co. - Duck.
Newly constructed luxury oceanfront estate like you've never seen! This 12-bedroom retreat sits on an oversized oceanfront parcel in Section C of Ocean Sands boasting an ...
Listing courtesy of Twiddy And Company - Corolla.
Sprawling, recently updated, and completely reappointed 9 bedroom estate spread across a highly elevated and expansive oceanfront lot boasting ocean to sound views, direc...
Listing courtesy of Twiddy And Company - Corolla.
Absolutely amazing 12 bedroom Oceanfront estate available for purchase. Turnkey investment at the perfect time of year to capitalize on the rental season. This home is...
Listing courtesy of Outer Banks Realty Group.
Exclusivity, serenity, and beauty converge into the heart of the Outer Banks at 104 South Baum Trail. One of 13 very distinguished homes, this 5-bedroom, 5-bathroom, 2-pa...
Listing courtesy of Outer Banks Blue Realty Srvcs..
This is a money maker, Oceanfront custom built home in the sought after Whalehead Club. This builder had a design in mind to maximize space while creating a resort-like ...
Listing courtesy of A Better Way Realty, Inc.
This investment property brings great returns year after year. The stunningly beautiful oceanfront home boasts 12 bedrooms and 12.5 bathrooms with a grand top-floor livin...
Listing courtesy of Basnight Realty.
This magnificent home has a fantastic floor plan for entertaining or a family retreat. It is over 6000 square feet with an abundance of decks. The home as 13 bedrooms and...
Listing courtesy of Charles S Motosko.
Welcome to "Exta Sea" a luxury Oceanfront home in Nags Head. This opulent home features 9 Master Suites with countless amenities throughout. The ground floor offers three...
Listing courtesy of Saga Realty And Construction.
Virtual tour interior: https://www.vizsourcevr.com/virtual360/194053702710/ Virtual tour exterior: https://www.vizsourcevr.com/virtual360/191166980166/ The Oaks on Hun...
Listing courtesy of Island Crest Obx Realty.
This is the one you’ve been waiting for! Beautiful new construction, turn-key, fantastic rentals, views for days, and so much more with this drop-dead gorgeous Corolla oc...
Listing courtesy of Landmark Sotheby's International Realty.
Oceanfront luxury with a strong ROI! With an opportunity of over $380,000 in gross rental revenues, this property is an investor's dream! Indulge in coastal luxury liv...
Listing courtesy of Saga Realty And Construction.
RARE OPPORTUNITY FOR 4.7 ACS AT A STOPLIGHT ON THE BYPASS. A vacant commercial site of this size is very very unusual on the Outer Banks. Centrally located across from J...
Listing courtesy of Harrell & Associates.
Million $ Makeover! Well, almost a million! This stately home is practically new inside and out and it shows! You really won’t recognize it if previously viewed. You m...
Listing courtesy of Outer Banks Realty Group.
Indulge in the finest craftsmanship and construction at 64 Ocean Boulevard, where luxury meets durability. This exquisite residence boasts a range of high-quality materia...
Listing courtesy of Saltwater Realty Obx.
Remodeled Oceanfront rental machine in Desirable Duck. Easy walk to downtown or the soundfront walkway. Beautiful panoramic views of the breakers from the huge great ro...
Listing courtesy of Twiddy And Co. - Duck.
Gorgeous and exceptionally well-maintained six-bedroom home on the oceanfront in the heart of Whalehead. Owned by the same loving family since built in 2001, this propert...
Listing courtesy of Twiddy And Company - Corolla.
Welcome to Ocean Serenade, located on Salt House Road in the coveted Pine Island neighborhood of Corolla. Situated on an elevated lot with panoramic ocean to sound views,...
Listing courtesy of Twiddy And Company - Corolla.
Perched on a nice and high Oceanfront Dune for dynamite Ocean Views, this outstanding Nine Bedroom Oceanfront Beach Home, is loaded for fun gatherings ! Enjoy Ocean & Sur...
Listing courtesy of Sun Realty - Corolla.
Spacious and luxurious oceanfront home perfect for an extended family or large group. Attractive investment property; Owner uses the home several weeks, add those weeks ...
Listing courtesy of Outer Banks Realty Group.
WOW : $180,000 PRICE REDUCTION !! MOTIVATED SELLER. High-end, well-maintained Oceanfront Home. Oversized rooms and living area. Originally built for second home luxury...
Listing courtesy of Brindley Beach Vacations & Sales-Corolla.
Magnificent Oceanfront Retreat with Exceptional Rental Income Discover the oceanfront home you've been dreaming of! Already boasting over $230,000 in rental income booke...
Listing courtesy of Howard Hanna Outer Banks Realty.
A well-maintained 8-bedroom oceanfront home that offers a luxurious and spacious living space with direct access to the ocean. breathtaking views of the ocean, providing...
Listing courtesy of Outer Banks Realty Group.
Approximately five acres of commercial property adjacent and west of the new 7 Eleven at the corner of US 158 and Woods Road with access from US 158 already in place with...
Listing courtesy of Village Realty Holdings, Llc - Nh.
Gorgeous Ocean Front Home with Spectacular Ocean Views located in the much sought after Buck Island gated community! This custom built 6 Bedroom / 5 bath / 2 half bath h...
Listing courtesy of Corolla Beach Realty.
Rare opportunity to own a thriving business and living quarters in Downtown Duck! Centrally located with high traffic! Well-established, turn-key, successful business w...
Listing courtesy of Brindley Beach Vacations-Duck.
MAJOR UPDATES FINISHED IN SEPT 2023! Don't miss this rare opportunity in one of the BEST neighborhoods in Duck! Just upgraded with NEW ROOF, ALL NEW AND EXPANDED DECKING,...
Listing courtesy of Four Seasons Realty.
STUNNING OCEANFRONT HOME IN DUCK! BREATHTAKING OCEAN VIEWS! ELEVATOR! NOT A RENTAL…SHOWS BEAUTIFULLY! IMPECCABLY MAINTAINED/PRISTINE CONDITION/ TASTEFULLY UPDATED! 161...
Listing courtesy of Landmark Sotheby's International Realty.
This Semi Ocean front absolute gem is oh so sweet and slightly salty making the perfect mix. “Sugarpops” is the third masterpiece created by the Gorman_Love family and bu...
Listing courtesy of Outer Banks Blue Realty Srvcs..
Rare South Nags Head opportunity! Owner-operated and meticulously maintained, this multiple-dwelling listing offers a remarkable location, 15 bedrooms across 5 units, oce...
Listing courtesy of Harrell & Associates.
The 8BR oceanfront estate sits on nearly 2 acres of oceanfront property with 151 feet of water frontage enjoying sunsets over the Sound and sunrises over the Ocean! Absol...
Listing courtesy of Kingdom Real Estate Services.
Oceanfront in Corolla - views, views, views! 'Serenity Sunrise' is an incredibly spacious and updated seven bedroom oceanfront home that sits on a massively wide 100ft lo...
Listing courtesy of Four Seasons Realty.
This luxurious oceanfront estate boasts 8 spacious en suite bedrooms, an elevator and a floor plan that maximizes living space. The grand great room is adorned with vault...
Listing courtesy of Landmark Sotheby's International Realty.
Ocean to Sound views! This stunning newly constructed home in Duck is only 4 houses from the beach and was finished in 2023 by revered Outer Banks builder Olin Finch. A f...
Listing courtesy of Four Seasons Realty.
Escape to your own private paradise with this stunning beach retreat, offering breathtaking ocean views and unparalleled privacy. This home is designed to embrace coastal...
Listing courtesy of Carolina Designs Realty.
Introducing "Southern Flair," a nine bedroom, semi-oceanfront coastal retreat centrally located in the Whalehead community of Corolla. Just steps to the beach, this home ...
Listing courtesy of Twiddy And Company - Corolla.
Stunning 10 bedroom estate situated on a spacious semi-oceanfront parcel, just steps to the beach in the heart of the Whalehead Community of Corolla. Boasting panoramic v...
Listing courtesy of Twiddy And Company - Corolla.
Nestled in the picturesque Whalehead community, this exquisite 10-bedroom home, completed in 2020, offers a harmonious blend of luxury and coastal living. Step inside and...
Listing courtesy of Landmark Sotheby's International Realty.
Turnkey restaurant in the heart of Kitty Hawk, located near the intersection of Kitty Hawk Rd. and North Croatan Hwy. This is a prime location and great business opportun...
Listing courtesy of Hall & Nixon Real Estate Inc.
The view is SO BLUE at Bluegrass Breeze! Ten panels of glass and transom windows let the light and water views pour into the open concept great room, dining room and kitc...
Listing courtesy of Carolina Designs Realty.
Price reduced $52,000! This one-of-a-kind home is distinctive from the moment it greets you with its shingled siding, shingled roof and white picket fence front yard. B...
Listing courtesy of Keller Williams - Outer Banks.
Rare opportunity to own an oceanfront home in an "X" flood zone (no flood insurance required) and in a unique area having a healthy, protective beach that currently does ...
Listing courtesy of Sun Realty - Kdh.
Here is a magnificent opportunity to own an expansive property on almost a full acre on the Outer Banks. It is complete with an incredible Ocean View, which ultimately t...
Listing courtesy of Surfside Realty.
Oceanfront Opportunity! Located in the heart of Kill Devil Hills, just South of the iconic Avalon Pier. Over $155,000 in 2023 rents! This exquisite haven effortlessly com...
Listing courtesy of Coldwell Banker Seaside Realty Kh.
Sandcastle is an absolute beauty with so many recent updates! Incredible unobstructed views of the Atlantic from most rooms will take your breath away. Every detail has b...
Listing courtesy of Brindley Beach Vacations-Duck.
**$100K already booked for 2024! Instant Cash Flow at closing! Estimated $200K for 2024 GRI. ** Get paid NOW for future bookings! If you are looking for a well maintaine...
Listing courtesy of Coldwell Banker Seaside Realty Kh.
This indeed is a very rare opportunity for you to own in the unpainted aristocracy of Cottage Row in Nags Head. Listed on the National Register of Historic Places in the ...
Listing courtesy of Keller Williams - Outer Banks.
This stunning coastal retreat offers serene ocean vistas! Situated amongst a row of exquisite homes, this property stands out with its functional design and proximity to ...
Listing courtesy of Coldwell Banker Seaside Realty - Kdh.
This oceanfront property with outstanding ocean views features 4 spacious bedrooms, 3.5 bathrooms, a private pool, and a hot tub. Its main attraction is the awe-inspirin...
Listing courtesy of Keller Williams - Outer Banks.
Welcome to 412 Deep Neck Road, a stunning semi-oceanfront retreat located in the renowned Pine Island community of Corolla, NC. Boasting views of the ocean, direct beach ...
Listing courtesy of Twiddy And Company - Corolla.
“So Good” is SO accurate!! This 6 bedroom/5.5 bathroom features 4 Kings (3 are Masters), 2 Twins and 2 Pyramid Bunks (fun AND functional!). Ground floor offers an INCRE...
Listing courtesy of Beach Realty & Construction - Kh North.
Updated Sanderling Oceanfront! Ocean Views! Wide sandy beach! Embrace the coastal lifestyle with this stunning oceanfront retreat in the prestigious Sanderling neighbo...
Listing courtesy of Landmark Sotheby's International Realty.
Wide oceanfront lot and stable beach. See survey for set backs and insurance zones
Listing courtesy of Real Escapes Properties.
118 Blue Heron is located in the wonderful Sanderling community. The home has 4 bedrooms and 4 bathrooms. The floor plan on the top level is open and gives great ocean vi...
Listing courtesy of Brindley Beach Vacations & Sales-Corolla.
Custom-built with the intention of hosting large groups of friends and family, "My Blue Heaven" boasts a spacious layout, ample home amenity package, and desired location...
Listing courtesy of Twiddy And Company - Corolla.
Rare opportunity in Duck! This well-established restaurant sits right on Duck Rd and sees tremendous foot traffic. The almost half acre of land is creatively used with a...
Listing courtesy of Century 21 Nachman Realty.
128 Skimmer Way, Duck- Welcome to your dream oceanfront retreat at 128 Skimmer Way in the community of Sanderling. Located in the heart of Duck, NC, this stunning 5-bedro...
Listing courtesy of Obx Realty Group, Llc.
With an incredible $225K remodel done this offseason, get ready to be wowed by this oceanfront stunner. Showing as one of the best in one of the most desirable locations...
Listing courtesy of Keller Williams - Outer Banks.
Located in the heart of Duck, in the desirable seaside neighborhood of Schooner Ridge, this 6-bedroom (with 4 en-suites) home is designed for both relaxation and entertai...
Listing courtesy of Outer Banks Realty Group.
OCEAN VIEWS from all three levels, a very rare find on the Outer Banks! Modern beach home with panoramic views (Ocean and Sound) in Corolla! "Shore House” is fully remod...
Listing courtesy of Twiddy And Company - Corolla.
Nestled within a serene neighborhood, this timeless oceanfront residence offers an unparalleled coastal living experience. Boasting plenty of room for a small group or fa...
Listing courtesy of Landmark Sotheby's International Realty.
STUNNING SUNSETS at this immaculate, turn-key OBX house on a quiet street in Corolla Light. Perfect as a primary residence, second home, or elegant rental home. Come fe...
Listing courtesy of Century 21 Nachman Realty.
You won't want to miss this recently updated, spacious six-bedroom oceanfront rental investment home in 4x4! You can relax and enjoy the large living area on the top floo...
Listing courtesy of Landmark Sotheby's International Realty.
Nags Head Oceanfront cottage with forever views of the Atlantic Ocean from the abundance of open decks, in addition to the large dune top deck directly overlooking the wa...
Listing courtesy of Coldwell Banker Seaside Realty Kh.
This charming semi-oceanfront vacation home offers 6 bedrooms, 5.5 bathrooms, and over 3800 square feet of living space. Ideal for large groups, this property features oc...
Listing courtesy of Keller Williams - Outer Banks.
Significant opportunity for Development in Corolla on the Outer Banks. Phase 2 of the Villages at Ocean Hill offers 3.75 acres with potential for 15 Single Family lots al...
Listing courtesy of Coldwell Banker Seaside Realty Kh.
This stunning semi-oceanfront residence boasts an expansive layout, featuring eight bedrooms and seven and a half bathrooms. Its prime location in the heart of the Villag...
Listing courtesy of Village Realty Holdings, Llc - Nh.
Breathtaking beach home with ocean views! This rare 3-back from the ocean home design offers endless space both inside and out to relax and unwind, play, and take in the ...
Listing courtesy of Century 21 Nachman Realty.
Breathtaking Views from the moment you enter the house! This beautiful custom built and custom renovated soundfront home is looking for the next owner to love and cherish...
Listing courtesy of Southern Shores Realty.
OCEANFRONT, Wild Hearts at Ocean Sands is the perfect turnkey investment. 3425 sq. feet with easy cleaning and maintenance and less per sq foot than any other oceanfront ...
Listing courtesy of Home Zu.
Hard to top this impressive residence located oceanside in the ocean to sound award winning resort community of Corolla Light. This iconic home is situated on the main s...
Listing courtesy of Brindley Beach Vacations & Sales-Corolla.
Enjoy the Outer Banks in this Semi-Oceanfront Beauty! This custom built home offers unobstructed panoramic ocean views! Located in Carova Beach, where the ''Wild Horses R...
Listing courtesy of Coastal Shores Realty Group.
Vintage oceanfront property located on quiet cul-de-sac. 22490 square foot lot with 105 feet of ocean frontage creating many possibilities. Top floor consists of kitchen,...
Listing courtesy of Century 21 Nachman Realty.
Welcome to 413 Myrtle Pond Road, located in the prestigious community of Pine Island in Corolla, NC. Appropriately named "Sea Gem", the home rests in a beautiful, private...
Listing courtesy of Keller Williams - Outer Banks.
Stretch out in this spacious recently renovated home . Its like new inside and out. There is something for everyone to enjoy. Two Dishwashers, Wet Bar, Ice Maker, Drawer ...
Listing courtesy of Beach Realty & Construction - Kh North.
Always wanted to live on a golf course AND have panoramic Ocean AND golf course views? Pack your clubs, 303 Grissom Street in Kitty Hawk is the home for you. This 4,877sf...
Listing courtesy of Stan White Realty And Const-Duck.
Experience coastal living at its finest in this remarkable soundfront home in Duck, North Carolina. Boasting 6 bedrooms, 5 1/2 baths and breathtaking sunsets, this proper...
Listing courtesy of Landmark Sotheby's International Realty.
If you are looking for an upscale vacation rental investment property, “Sailfish Station” will have you hooked. This is a 6 bedroom, 6.5 bath home located in the Moongat...
Listing courtesy of Keller Williams - Outer Banks.
This stunning sound front home could easily gloss the pages of Coastal Living Magazine! The open-concept kitchen, living and dining area exudes a cozy cohesiveness w...
Listing courtesy of Keller Williams - Outer Banks.
Situated high on an elevated canal-front lot, this home is centrally located in Nags Head convenient to grocery stores, shopping and restaurants. With rear porches facin...
Listing courtesy of Pirates Cove Realty.
This Semi-Oceanfront home in Nags Head is Just South of the Nags Head Fishing Pier. Beautiful Ocean Views from the spacious Top Level Deck! Deeded Private Beach Access pl...
Listing courtesy of Crosspoint Realty.
A fabulous Whalehead residence boasting a full array of amenities! Enjoy the allure of a large in ground private pool, hot tub, volleyball court, and a brief stroll to th...
Listing courtesy of Outer Banks Realty Group.
Welcome Home to Kitty Hawk Beach! Oceanfront Cottage with unobstructed ocean views for miles, this cute 5 bedroom cottage is ready for you to make it your own. Located ...
Listing courtesy of Nelene Gibbs Real Estate, Llc, Dba Coast To Bay Realty.
791 W Meeting St, Corolla- This stunning 8bd/8.5bth home located in the gated community of Buck Island is a showstopper. This home offers a private pool, hot tub, elevato...
Listing courtesy of Obx Realty Group, Llc.
If you're looking for the perfect home with spectacular sunrises and sunsets then this 5 bedroom and 5 1/2 bath home is the right choice for you. Located across the stree...
Listing courtesy of Sun Realty - Kdh.
Your beach dreams may have just come true with this 5 bedroom, 4.5 bathroom semi-oceanfront home built in June 2021. It features a saltwater pool, hot tub, covered decks,...
Listing courtesy of Keller Williams - Outer Banks.
Beach Bliss is definitely the home to see! Incredibly well maintained with seasonal updates and annual maintenance make this one for the discerning buyer. Stunning ocea...
Listing courtesy of Stephanie Walker And Associates.
We're super excited to present this semi-oceanfront gem in the heart of Nags Head! Not only has it undergone loads of recent stylish updates and major improvements, just ...
Listing courtesy of Keller Williams - Outer Banks.
Beautiful 7 bedroom, five and 1/2 bath semi-oceanfront home located on a corner lot at E. Mall Dr. and the Beach Road in the Village of Nags Head. Has all the amenities ...
Listing courtesy of Atlantic Realty.
NEW CONSTRUCTION in the OBX!! Personally built by owner of the company, J&T Construction, nestled in the gated Currituck Club among Tall Pines and Live Oaks with Spa...
Listing courtesy of Brindley Beach Vacations & Sales - Kh.
Why not live at OBX in the Currituck Club/VIP style? The best the beach has to offer! A Gated Community w/ beach valet and trolley service. A summer full of fun activitie...
Listing courtesy of Howard Hanna Outer Banks Realty.
670 Hunt Club Dr, Corolla-This stunning 7bd/7bth plus 2 half bath home for sale in the Currituck Club is located on one of the highest elevations in Corolla. Amazing ocea...
Listing courtesy of Obx Realty Group, Llc.
Introducing "Lemonade Stand" - an exceptional investment opportunity that combines panoramic ocean views with the convenience of a direct 100' access to the beach. This m...
Listing courtesy of Coldwell Banker Seaside Realty - Kdh.
*Currently Under Construction | Siding Installation and Rough-In Stage* New and thoughtfully designed beach house packed with BIG amenities like pool, game room, second l...
Listing courtesy of Howard Hanna Outer Banks Realty.
Experience breathtaking sunset views from this exceptional property nestled in the highly sought-after community of Sea Tern, Duck. Boasting four bedrooms, this soundfron...
Listing courtesy of Saga Realty And Construction.
You don't want to miss this beautiful oceanfront home located in Carova Beach. Endless possibilities—whether it be a second home or investment property, this home is the ...
Listing courtesy of Saga Realty And Construction.
Welcome to 876 Drifting Sands Drive, where the beauty of coastal living meets the tranquility of Soundfront serenity. This luxurious home offers a generous heated living ...
Listing courtesy of Colony Realty Corp - Frisco.
Enjoy ENDLESS water views and STUNNING SUNSETS from this spacious SOUNDFRONT home in the desirable community of Monteray Shores! Truly a water lover's Paradise!! Boat, ...
Listing courtesy of Sun Realty - Kdh.
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Investment Home Primer
For those new to the OBX market, here is a quick overview:
Rental income is largely determined by your distance to the ocean. An oceanfront property will always rent better than one that is 3-4 rows back. They get a higher rental rate and typically rent for more weeks out of the year. A newer oceanfront home can rent for 24 weeks of the year, whereas a house that is 3-4 rows back may only rent for 16-18 weeks. With most investment properties, the strength of the investment is based on the cash flow (money in vs. money out). The way to analyze this is GRY (Gross Rental Yield). This is calculated by dividing the gross income by the purchase price. An example would be: If a home has a gross income of $85,000 and cost $1,000,000 the GRY = 8.5%. A general rule of thumb in our market is if the home produces a GRY of 8% or above, it should cover most all of the expenses, including mortgage.
Expenses can range from utilities, taxes, mortgage, property management, insurance, HOA fees & maintenance. These will vary depending on many things: An oceanfront home will have higher insurance rates. Some homes have very low HOA fees and others are quite high. A newer home will have fewer maintenance issues vs. an older home, etc
HOA fees will largely be determined by the services and amenities provided. Some subdivisions will offer swimming pools & tennis courts but the HOA fee will be higher to pay for these things. Other subdivisions may not offer an expansive list of amenities, thus the HOA fee is low.
Most of the OBX is on private septic systems, however there are subdivisions with sewer systems. Areas with septic will usually be platted on larger lots since the septic area takes up space. If a subdivision is set up on a sewer system, the lots may be very small. That means the houses could be much closer to each other. The HOA would also have to charge a fee for the sewer system usage.
Property management is big business here. There are many rental companies on the beach. The owner chooses who they want to use based on performance, rates, and services provided. The rate can range from 14% to 20% of gross rents depending on the services you want them to provide. You can either have them take care of everything (bookings, pool service, weekly cleanings, linens, landscaping, filter changes, etc) and that rate may be 18-20%. However, if you hire your own pool company and you do the landscaping yourself, that rate would be reduced. In NC, if the home is in a rental program, the new owner has to honor all weeks booked for at least 180 days from closing. That way a new owner can't simply cancel everyone's reservation.
All rental money is prorated to the day of closing. That means if you bought a house and closed on May 1st, you would own all the money from any week booked after May 1st. The seller would keep any money from the weeks occurring prior to May 1st.
This is an amenity driven market. The more amenities a house can offer will make it more attractive to potential renters. Swimming pools, hot tubs, gamerooms, views, theater rooms, etc are what renters desire and these amenities will increase your bottom line. Most of these homes are sold fully furnished, so you get most everything in the home included in the purchase price.
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