What is currently going on with the real estate market in Brevard? (Melbourne: big house, neighborhood)

[lio45]

Originally Posted by 1insider

How much demand will there be for a vacation rental in Malabar and how low will the rent have to be to compete with beachside rentals? Occupancy is the most important variable for a vacation rental investment. Demand and rent starts declining as the amount of ocean view declines. A first floor direct ocean unit commands less rent than an upper floor with big views. You can get 40+ weeks a year at over $2000 a week for the right kind of oceanfront condo. A house in Malabar might struggle to get a quarter of that occupancy at a greatly reduced rate. If you can buy it cheap enough the numbers might work out but the limited demand makes that too risky for most vacation rental investors.

Actually, when we started investing in Brevard County some ~10 years ago, the original idea was to buy property and run it as a vacation rental.

Back in the late 1980s, when my sis and I were young, as a family we'd go to that area for 1-2 weeks... do some beach time, obviously, but also go to Orlando several times for those attractions there. Kennedy Space Center too.

Originally, we were looking at Cocoa Beach (default place that anyone will consider...) but then we quickly realized that for a vacationing family like ours, the beach is only a fraction of the attractions of the area, and if you're going take days of your week to go to Disney or KSC then it's kind of a waste to be oceanfront.

For that purpose, we ended up getting a 3/2 pool house in a good neighborhood in northern Cocoa (just off the 528 at Industry Road), easy enough access to the beaches (~10 minutes of driving and you're parked in Cape Canaveral already) and perfect for going to Orlando efficiently.

The goal was to offer unbeatable value for target families like us in the 1980s - Northerners or Canadians who'd drive down to FL (our target customer can't be car-less, unlike the oceanfront condos) and do a bunch of things in the area (several of them around Orlando), not just be at the beach every day all day long.

(The project changed when I realized it's sooo much easier to simply landlord the conventional way, so we never actually did what we originally wanted to do.)

So, yeah, I think the idea of getting a house on a large lot (to make sure you aren't bothering the neighbors) could work well. It's not absolute income that matters, it's the ratio net income / money you invested.

[lio45]

Originally Posted by buenos

Imagine a family of 5 driving down from Atlanta for vacation, with a limited budget, but want to stay within daytrip away from beach, rocket launch and disneyland.

That's exactly the idea (wrote the post above before seeing yours), except that I expect these families would usually be driving from origin points quite further away than Atlanta.



edit - also, it's Disney World. The one called "Disneyland" is the one in Anaheim.

[Nypafl4u]

There are definetly families that may want to rent a house short term when traveling on vacation. Usually they don't stay for more than a week to 10 days. But that family usually travels at specific times of the year, when school is out. That limits you to the typical Holiday Breaks (Spring Break, winter breaks for us in NY around Presidents week, summer Break which covers a couple of months, Chritmas break and various extended weekend like Memorial and Labor Day weekends). I am sure there are other holidays for other countries, but the point I am thinking is, that leaves a lot of time in between for vacancies where an oceanfront condo may attract most of the year vacationers, likely older adults that can take off regardless of a school schedule (and of course includes snowbirds). They likely don't need a whole house with three or more bedrooms. So the condo that allows short term rentals, even if not oceanfront, works better. There are a lot of those in Cocoa Beach for example, so competing houses, away from that, such as Cocoa, Merritt Island, Malabar or Rocklage will have to advertise much lower daily rates to attract travelers away. I know when we look for a place, we search oceanfront first and usually can't find one in our budget or even a vacancy because we travel when school is out, like most families do. When you add in all fees, it usually makes sense to just grab a hotel. If we want Orlando parks, we stay in Orlando. Driving an hour each way back to Brevard is exhausting if planning a day or three at the parks. Been there and done it. Not fun.
Now if we live here full time, then we would visit the parks when most tourist don't with seasonal passes that allow you to come and go when we want to and not cram 12 hours in a day because time is tight.
I suppose extended stay housing for employment is a possible niche. I have not done enough research to see if that can make sense. Most of my renters want 6 months or more if comming in for work. Anything shorter term is usually set up by the employer at an extended stay hotel from what I have seen. None of my realtor friends, some who specialize in rentals have ever suggested that strategy for employment short term rental needs. Maybe because of the legal issues of setting that up in those residential neighborhoods.

[1insider]

Most of the oceanfront condos don't allow weekly rentals so, outside of Christmas to Easter snowbird season, they can be rented by the month for a reasonable rate especially the side view or ground floor units.

Vacation rentals away from the beach, like lio45 said, might work if the purchase price is low enough but it seems way too risky to wade into a market with unknown demand. Demand and rents beachside are known. How many weeks a year could I expect for a house west of a bridge and how much could I hope to get for a week? The numbers would have to work for a long-term traditional lease as a fall-back plan to entice me to attempt vacation rentals away from the beach in this county.

[buenos]

Even when I was making more than $200k/y I could not afford to rent beach front condos or hotel rooms with ocean view. Typically it was a short walk or drive away from the beach or point where ocean view starts.
I am renting an air bnb now for 2 months, small house on 1/4 acre. It was hard to find one like this, but i was looking for this specifically. While people are relocating for work, there is a 1-2 month window of temporary housing need. The company wanted me to go to corporate housing, but that provides zero social distancing from neighbors and receptionists, with their shared corridors being the only access route to the parking lot. There is a lot of hiring going on in the defense and aerospace in brevard, people are moving here.

For vacationing, being in a condo aka concrete jungle, vs a small house on a large lush green lot, makes a difference.
So, there are 3 types of customers:
- snowbird, 6 months in winter season.
- work relocation, 1-2 months any time of year
- family vacation, drive-in, 1-2 weeks in summer season.
A property that is desirable for all 3 types, should be good business.

[Nypafl4u]

[quote=buenos;58553503

For vacationing, being in a condo aka concrete jungle, vs a small house on a large lush green lot, makes a difference.
So, there are 3 types of customers:
- snowbird, 6 months in winter season.
- work relocation, 1-2 months any time of year
- family vacation, drive-in, 1-2 weeks in summer season.
A property that is desirable for all 3 types, should be good business.[/QUOTE]

If you read my post above, I think your view on house short term rentals is valid for a very limited amount of time. As 1insider also pointed out, unless you paid a very low price maybe back in 2010-2012, it may work. But anything at current market values will be difficult to maintain a positive cash flow.
Snowbird don't usually want a house. They usually want 1-2bedrooms.
Work relocations may be plausible, but not as many are moving without already something set up for longer term or to purchase. That 1-2 month need just isn't a heavy request or you would see tons of investors doing it. Of course you also should only consider if it is legal to do so which may not be unless in Cocoa Beach or Cape Canaveral. Taking that chance outside those two areas exposes you to a lot of financial risk if you get shut down after spending a lot on furniture, electronics, monthly Internet, electrical costs, utensils, bed sheets and towels, etc.
Vacationers in he summer (assuming you don't get shut down for legal reasons) may not meet the vacancy requirements to make it profitable for rest of year.
For these reasons, you are taking a big risk in these other areas of Brevard with a house in short term rentals. Remember anything under 6 months requires collecting and paying a 11% hotel tax, making it difficult to AirBnB it on the down low, and remain under the radar.
My advice would to only try it you already have it fully furnished since there is less out of pocket cost if you do get shut down. I have seen this work for reverse snowbirds that will stay when no one else does and can afford to carry the cost without worrying about vacancy levels (no mortgage).

[Nypafl4u]

The market still seems busy considering the upswing in reported Covid cases. I am not sure if showings are happening live or just virtually, but I see plenty of pending sales. I am curious if the closings may be delayed with the 2nd waive of Covid. Strange times indeed.

[1insider]

Originally Posted by Nypafl4u

The market still seems busy considering the upswing in reported Covid cases. I am not sure if showings are happening live or just virtually, but I see plenty of pending sales. I am curious if the closings may be delayed with the 2nd waive of Covid. Strange times indeed.

Showings are happening and depending on the agent and clients some are masked and distanced and others not. I am friends with two agents from different offices who each believe that the virus is a hoax and refuse to practice any safety measures. Needless to say, I don't interact with them other than via phone or email.

Closings are still happening with some changes. I had one in my office week before last and the closer had everyone wait outside until it was their turn to sign and they came in one at a time, everyone required to mask. I went to a closing at a title company last week where I sat spaced out in a room with my clients all of us masked and the closer walked them through closing from another office via a big screen TV. I am not aware of any closings being postponed. We still do quite a few closings with no one present, everything via email and FedEx.

[buenos]

I as a cash buyer, signed closing documents that i received by email, scanned, signed and sent back by email. The seller had to go in to the escrow office to sign. Masks worn at final walk through and any viewings or meetings.

[suninmyeyes]

Renting in Melbourne for the past 5 years waiting for home prices to pull back. I'm stuck now wondering if we are on the cusp of a correction or if there really is no end in sight. Could have gotten a lot more house in 2016, but thought no way it's just gonna keep going up. Thinking now I need to consider Palm Bay or Rockledge for 1700+sqft in a decent neighborhood with a nice screened pool since it seems homes around the $260-$300K mark are pulling out of that range through northern Melbourne area I originally wanted for future potential rental to Air Base folks.