Investment and Return Strategies

Growth in Value

(Values from '03 to early'06 rose -approx. 30% to 40% PER YEAR! Since 1st quarter '06 values have gradually dropped off, giving back about 25% of the values. But, since most condo owners have second homes, it appears oceanfront values are stiffening up again, since most 2nd home owners do not have to sell. However, speculators have not been able to sell their properties--providing great buy's as incentive to own on the ocean.

As long as the supply of Oceanfront property is limited and there is no urgent need to sell your oceanfront condo/home, there should always be increases in 0ceanfront Value's. The "Supply and Demand" economic doctrine and "risk reward" scenario is more applicable in the Oceanfront Condo market than in any other type of investment market.

Weekly Income

(Depending on view, owners renting their own condo's by the week using by owner websites such as (www.vacationrental.com) or (www.vrbo.com), can achieve from $20,000-$38,000 per year in gross rents. Rental management companies traditionally will bring in about 40% less gross rents to owners.)

Income from oceanfront renters is most prolific with condos that ALLOW Weekly rentals.

The Market for Weekly vacationer's extends the HIGH SEASON in Florida to beyond the well known "Snow Bird" or winter months, when those in colder climates Fly Down (Snow Bird) to the Warmer Climate for the winter.

Renters will pay the highest rents for Short Term stays and the largest swell of renters are weekly visitors. If weekly owners don't give in to the temptation of renting for the whole winter season on the lesser seasonal monthly lease rates, then the weekly rents bring far more income over that period. In addition, those who just want to vacation for a week or two find the weekly condo's a great get-a-way any time of the year, except May, September, and October are very slow months even for weekly vacationer's. Weekly visitors pick up in mid-November, December and there are NO VACANCIES from January through April.

IMPORTANT: Owners who use the weekly strategy CANNOT EXPECT OR BE GUARANTEED enough income over a whole year to cover all Debt service (even high leverage), association dues, taxes and insurance during first years of ownership. But as rents increase, cash flow increases. As income grows, it will eventually cover your total costs. That increased income drives the value of condo as well, so there are two appreciation factors now....

1. Income Growth and.........................
2. Intrinsic Growth from limited supply of oceanfront and no new building.

Monthly/Quarterly/ Annual Income

(Monthly income varies but annual income at 50% occupancy will be between $8,000 and $13,000 per year)

Since there are ample "Snow Birds who want to winter in Florida, Monthly and quarterly income is assured in the Florida HIGH SEASON months of January thru April. After these months, visitors who can stay for longer monthly or quarterly periods are fewer. Consequently an owner/investor, cannot be assured they will rent those off-season periods. If the owner has no mortgage or even a small mortgage, the lack of rents may not be a burden, and his personal use, plus inherent growth of oceanfront property, makes ownership a great long term investment and any personal use is a benefit. However, if the owner is expecting the long-term renters to pay his mortgage, he is at risk with the longer-term rental. Investors must weigh this criteria before investing, i.e. their purpose, financial means and ability to carry financing.

Annual renters are a whole other investment strategy. Here are the positives and negatives. An annual renter relieves the owner of most unknowns about whether there will be income. Annual renters are abundant and greater than the number of units available on an annual basis, simply because most owners want to use their oceanfront condo. For this reason, supply of annual condos is low and there are always annual tenants. The negative is, A.) You don't get to use your unit personally and B.) Annual renters usually can't afford the monthly rents since they are not visiting, and their rent is their house payment. Very few locals can afford the high rents afforded by monthly or weekly income rentals, so their budget is limited. Again, if you have no mortgage, or a low mortgage, the annual-renter could bring in nice income on your property while it is going up in value...and go up in value they will if supply of condos stays low (there is no surge of sellers) and demand for oceanfront living and vacationing continues.

Personal Pleasure

Of course, the best reason for owning on or near the ocean is the personal pleasure you get from being so near natures sedative, the Atlantic Ocean. Whether you fish or boat, sunbath, or just sit and listen to or watch the gorgeous sunrise' and sunsets, the ocean is hypnotic and therapeutic. It puts life in a new perspective just walking on the sand and watching surfers or kids filling up buckets of sand. Let your friends and family use it and get that great feeling of sharing your personal piece of heaven. Why wait when pricing continues to go up and life keeps getting shorter?