Gross Future Value of 30A Vacations vs. Owning A 30A Vacation Home
The future value (FV) is the value of a current asset at a specified date in the future based on an assumed rate of growth over time.
A 3 bedroom house, along Scenic Highway 30A, in Seacrest Beach would cost approximately $330.00 per night on VRBO.com. According to Paradise Beach Rentals, the cost of renting vacation properties in the east 30A area increases about 7-10% every year. Therefore, if someone were to rent a house in Seacrest Beach for a week during Spring Break, and week during the summer, it would cost $5,151.30 a year (this figure includes 11.5% bed tax, but not a cleaning fee, or any other additional fees associated with renting).
Most mortgages on Real Estate are amortized over 30 years. So, let’s figure over the next 30 years, that same vacation will end up costing a total of $520,657.56. Just to rent a house at the beach.
A 3 bedroom house in Seacrest Beach would cost approximately $650,000.00. Which, it might seem a bit overkill to buy a beach house to only use 2 weeks out of every year. This is why most people who own a house at the beach end up renting it out the other weeks of the year. Using the same figures from the rental example, and assuming the property would only rent for 200 days out of the year, over the same 30 years, the property would generate $6,670,820.73; or, over 10 years: $975.717.56; or, over 5 years $406,117.19.
According to the National Association of Realtors, home prices grow at a modest rate of 3% annually. This means, in 30 years, that same house in Seacrest Beach would sell for $1,577,720.61; or in 10 years: $875,545.65; or, in 5 years: $753,528.56.
When added all together…
So… The simple, and rhetorical, question would be, “Would you rather make $7.5 MILLION DOLLARS, or spend $520 thousand?”
COSTS: Rent vs. Own
These numbers are broad, in general. However, as a service to our Buyers, we can help gather facts and figures to help you make a sound decision when buying a vacation home here on 30A. Some of the numbers would include historical data and estimated future data:
- Price of Active Listings on the Market,
- Sold Price of Comparable Properties,
- Carrying Costs For A Property
- Historical Rental Data
- Projected Rental Data
- Costs to Sell A Property
All of this information will help you make a sound decision when purchasing a Beach Home.
Call Us Today To Find A Beach Home: (850) 450-2000
We are not financial advisors, and do not make any claims as to what property is or is not an investment fit for an individual's overall investment portfolio. It is best to seek the advise of a licensed financial advisor before purchasing a property. All of the data collected is based on estimates that are deemed reliable, but not guaranteed. All data should be independently collected and reviewed. Please call our office with any additional questions, comments, or concerns.
