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10.10.19 - 6 Mistakes Real Estate Investors Make When Budgeting for Their Vacation Property
When it comes to budgeting, there are a lot of common mistakes that are made. If you are new to the real estate world or you have never purchased an income property before, you will want to make note of this article and the mistakes many people make.
Countless number of people want to own investment properties, but they don’t have the funds to get started. If you get a loan from the bank to buy your first property, be certain to have a game plan to ensure you pay it off in the future. Being organized, prepared and have your financials in place, will help this process will go a lot smoother. Let’s take a look at 6 mistakes real estate investors make when budgeting for their vacation property:
1. Not budgeting for unexpected costs
Unexpected costs are costs will come up when you least expect them. Maybe your refrigerator broke down or your air-conditioner has stopped cooling.
You are going to have to hire someone who can come and check out the problem for you. This involves spending money that you didn’t plan on when you first purchased your vacation property. It is important to set aside some money for just such problems.
Worse yet, if you don’t have money to fix minor issues, you could run the risk of having your guests move out, write a bad review and demand a refund for their stay.
2. There will be vacancies from time to time
If you can find renters that want to rent your place for an extended period of time, good on you! However, with vacation rentals, this is not always the case. You will have vacancies from time to time, which means - no income coming in.
Depending on whether you have a property management company to advertise and market your home to find quality guests for you, this process is not always easy for the average person. Vacancies are a part of the process. One month you could have renters and the next you might not. Always be prepared for the slow seasons and periods because they will happen.
3. Not factoring in maintenance costs
Every property will need maintenance from time to time in order to keep your property in prime condition. You will want to keep on top of all your quarterly and annual maintenance checks.
If you neglect to do minor maintenance to your vacation property, you can expect to run into more expensive repairs later due to lack of preventative maintenance. Not only will you lower your operating costs by preventing bigger issues from happening, your home will be in better condition because of it.
4. Property management fees
With every good thing comes a fee. Property management is an extra cost because they are performing a service for you. A property management company is taking on the responsibilities of finding quality guest renters and making sure everything with the property and the guest goes smoothly during their stay. They are responsible for checking the property and doing minor repairs when needed. Every property manager is different, so it’s important to understand all the services they perform beforehand.
5. Over or under renovating
Be aware how much money you are investing in your vacation rental, make sure you can afford to pay your bills after. Everyone wants to operate a beautiful vacation rental as long as they can afford to maintain it.
Increased vacancies or neutral reviews? Your place might need an update. Fresh paint, upgraded furnishings and housewares are important for guest comfort and enjoyment. Bathroom and kitchen renovations are important for top dollar, plan for when you can afford it. But remember, you are competing for vacation rental dollars so, if you don’t update your rental you will find that people will choose to rent another home because of better amenities and updates.
6. Limiting oneself to a specific market
Be as open and as accommodating as possible. Allowing pets in your vacation rental will help lower your vacancy rates, this is something you might want to consider.
If purchasing a place with an extra bedroom will rent for more money each month and will be a better investment option in the long run, do what you need to do but make sure it will pay off and you can afford it.
The Bottom Line
There you have it, 6 common mistakes real estate investors make when budgeting for their vacation property on Florida’s First Coast.
9.1.2019 – HURRICANE DORIAN - UPDATE
Due to intensified conditions of Hurricane Dorian, St. Johns County has issued a Mandatory Evacuation effective at 8:00 AM on Monday, September 2, 2019 for Evacuation Zones A and B, which includes the entire City of St. Augustine, the City of St. Augustine Beach and those living in waterfront property or in flood-prone areas. Included within Zones A and B is all of Ponte Vedra Beach and Sawgrass.
Links to St. Johns Emergency Management: https://www.sjcemergencymanagement.com/pdf-maps/evaczones%208x11.pdf
Suncastle Properties is completing storm preparations by 6pm today and will be closing our offices so our team members and their families can prepare for Dorian's arrival. We will continue to update you as we have more information. Once the storm passes and it is safe to return, our property managers and maintenance personnel will be out inspecting all properties to determine if any damaged occurred. We will be contacting owners directly if any damages occurred to their properties.
Please stay safe and we will provide further updates as they become available.
11.5.2018 - Fall Maintenance Checklist
Here if North Florida you can tell fall is in the air. With cooler temperatures approaching and leaves falling, the soon to follow cold wet weather of winter can take a toll on your property. So here are a few fall maintenance items to consider before winter arrives:
- End-of-year yard maintenance - cleaning and raking leaves to trimming the hedges one last time.
- Clean, and restore outdoor items that have been damaged by summer's sun. Fall and Winter can be a great time to spend outdoors.
- Clear gutters of debris to prevent water from pooling or worse, causing roof damage.
- Inspect the roof and replace any loose or missing shingles, replace sun-damaged roof vent boots.
- Seal windows and install storm doors to keep heat from escaping and water from penetrating around the windows.
- Inspect HVAC systems - your HVAC system has been working hard all summer-long so fall is a great time to ensure your system will continue operating efficiently going into the new year.
- Make Fire Safety a PRIORITY by replacing batteries in smoke and carbon monoxide detectors and sweeping any chimneys.
10.16.2017 - 7 Different Ways to invest in Real Estate
Posted by Harding Bell International
10.02.2018 - SWITCH TO LED AND SAVE
Suncastle Properties and our friends at Beaches Energy Services wants to help you save money, while saving the environment. So here are some tips from Beaches Energy Services about switching to light-emitting diode (LED) bulbs will give your home better light for less money.
Why make the switch to LED?
1) Longer lasting – LED bulbs can have a life of 25,000 hours or more, making them 3-25 times longer lasting than traditional incandescent bulbs.
2) Reduces electricity consumption – LED bulbs use at least 75% less energy than incandescent. They reduce the amount of trapped light, by emitting in a specific direction. Switching to LED bulbs will reduce your carbon footprint by 500 lbs. and save you up to $75 per year.
3) Safer – Unlike other light bulbs, LED bulbs contain no mercury and avoid carbon emissions.
|Average Bulb Lifespan (hours)||25,000||8,000||1,200|
|Energy used as heat||10%||80%||90%|
|Energy Cost (Annually, for 4-hours/day at 11.5 cents per kilowatt hour)||$2.00||$2.34||$10.00|
9.13.2017 - HURRICANE IRMA - UPDATE
Now that hurricane Irma has passed the team here at Suncastle Properties was able to return to the island Tuesday and begin inspecting all the properties for storm damage. We are happy to report that none of our properties sustained any major damage. We are focused on repairing the relatively minor damages a few homes experienced to ensure they are available for rental in the next few days. Suncastle Properties has 1-2-3 bedroom condos as well as large family homes available to provide temporary housing for families who's homes have been damaged by Hurricane Irma. If you or someone you know needs assistance, please contact us at 904.285.5585.
9.11.2017 – 2:30pm - HURRICANE IRMA - UPDATE
St. Johns County has experienced significant impacts from Hurricane Irma throughout St. Johns County. Although the storm is moving from the area quickly, residents who evacuated the area are urged to wait before returning. There are numerous trees and powerlines down and flooding throughout the County causing hazardous conditions. Officials are assessing the damage and crews are removing debris as quickly as possible, however this process will take some time. Residents are urged to remain indoors and those who evacuated to wait before returning to their homes. For more information, please visit www.sjcfl.us/hurricane.
As of now the bridges to the barrier islands are still closed and will remain closed until authorities have performed a clear assessment and it has been deemed safe to return. To our owners, once we are able to return to the area (hopefully Tuesday afternoon) we will begin a full assessment of each home for any damages that may have occurred. We will update you as the week progresses.
9.8.2017 – HURRICANE IRMA - UPDATE
St. Johns County has issued a Mandatory Evacuation of all persons living in Evacuation Zones A and Zone B including the City of St. Augustine and the Town of Hastings. Included within Zones A and B is all of Ponte Vedra Beach and Sawgrass.
This mandatory Evacuation Order becomes effective at 6:00 AM on Saturday, September 9, 2017. The Hurricane Irma Evacuation Map is attached and available online at http://www.sjcemergencymanagement.org/archived/2017Press/MapsIrma/Evacuation_Order_Zons_11x17.pdf
Suncastle Properties is completing storm preparations by noon today and will be closing our offices so our team members and their families can prepare for Irma's arrival. We will continue to update you as we have more information. Once the storm passes and it is safe to return, our property managers and maintenance personnel will be out inspecting all properties to determine if any damaged occurred. We will be contacting owners directly if any damages occurred to their properties.
Please stay safe and we will provide further updates as they become available.
9.7.2017 - HURRICANE IRMA - UPDATE
We ask for the assistance of our neighbors and guests to place all outdoor furniture inside the home and to check their service courts and yards removing items that could become airborne potentially causing damage to property or injury to persons.
To our guests and elderly neighbors, please let us know if you need our assistance and we will gladly send someone over.
Please take time to review the evacuation routes that pertain to your community at the following link: http://www.sjcemergencymanagement.org/evacinfo.html
Reminder: Evacuation Re-Entry will require proof of residency. Proof of residency can be a driver’s license, utility bill or lease agreement.
We hope that everyone stays safe and that Irma will turn east and stay out to sea!