Is Now The Time To Buy At The Beach?

We Asked LAH’s Bryan Whitehead what trends he’s seeing this year at the beach.

By: Bryan Whitehead
Qualifying Broker - Florida Office
Cell 205-937-7784
Bwhitehead@lahrealestate.com** What areas are the hottest?

The east end of 30A is always busy. High-end new construction is everywhere down there. Alys Beach, Paradise by the Sea, and anything beach-front are booming. The west end of 30A is picking up steam as well. There is a little more value on that end for now, but prices are catching up quickly. Do you see areas that may be under valued?The west end of Panama City Beach. You can buy a new construction 3/2 a few blocks from the beach for $300,000. Just 5 miles west, and that house would be well over $500,000. As far as an investment property, what kind of return on investment should buyers expect?The goal for most investors is to make a 10% gross return annually on the rental income. For example, if a home costs $1m, they would look to make $100k per year in rental income. Once you factor in management fees and cost of ownership, most investors will hope to net out around 7% annual return. There are some areas and properties that can exceed those numbers, but they are getting harder to find. What advice would you give property owners who want to rent their place?If they already own a home, interview several property management companies. Many have different structures that can impact the fee you pay. Most full service companies charge about 20% to book the property, clean between guests, and perform general maintenance. Major repairs and damage will cost more. If they are buying a property, they should also interview management companies. The biggest thing these buyers need to figure out is how much they intend to rent. Some homes are full time investment rentals, and some owners use them throughout the year. You can’t go in buying a full time rental and look at it like you would your personal home. They will live completely differently. Have an open mind and think like a vacation renter, not like a resident. How competitive is the rental market?Long term rentals (6 months or more) are very hard to find and expensive. Smart investors are buying homes and condos here and converting them to long term rentals. Your management fees are half of a vacation rental, and the tenants typically stay for a number of years. Are you seeing a lot of community/gov. restrictions on new construction and renovations?Walton County is growing like crazy. There are some restrictions along 30A regarding height. Nothing can be built higher than 50’, and in Grayton that goes down to 40’. There are restrictions on how much of your lot you can build on, but it can vary depending on location. Building on or near one of our coastal dune lakes is very restrictive. You can only build 40% of your lot, and that includes any impervious surface like driveways and pools. Anyone buying and planning to build needs to do some real due diligence before they buy. Where do you see property values heading?Values have been on the rise, but not at a point where it should scare anyone about the “bubble bursting”. The sharpest climb has been in the investment properties. Their values tend to follow the income. Rental rates and occupancy have risen over the last few years, and these values have gone up with them. What part of the country are buyers coming from?We always see buyers from Birmingham, Atlanta, Nashville and Texas. Lately we are seeing a good deal more buyers from northern states who have historically bought in South Florida. Our property values are much better here than in areas like Naples or Miami. It is also easier to get to our area than it has been in the past. The new airport in Panama City, and the addition of flights into Destin has really helped.

## 80 Magnolia Street $1,650,000### Santa Rosa Beach, FL 32459 • #7944594 bed/5 Bath Brand new beach house with old bones! This house was purchased last July and taken down to the studs. Everything about this house is new except for the original framing foundation slab and roofing. Almost 900 sq ft of heated and cooled space was added...two bedrooms and a bonus room as well as two full bathrooms and a powder bathroom. The buyer has cleverly changed this small nonfunctional floor plan into a gorgeous beach house. Every room has been completely renovated and changed. The rear porch is now part of the deck that wraps around the pool. If you are looking for new construction ... you need to stop by and see 80 Magnolia as it goes through the transformation. Completion date is May 1st and new pictures will constantly be uploaded.

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## Highway 30a is unlike any part of the country. Each town has characteristics and distinguishing features that separate it from the next. Architecture, nature, city design and landscape all combine to give each area its own unique feeling. From planned communities to older residential towns, 30a presents a multitude of experiences. However, despite these differences, 30a is a tight knit community. The energy and the locals flow from town to town, after all they are all connected by one simple road.