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winterhater

Registered
01/13/2015

Posts
17

St Thomas condo investment?

January 13, 2015 09:06AM

Hello all.... My family has been vacationing in St Thomas for years and everytime we go, i feel more of a pull to the islands. Last year we started thinking about purchasing a condo there. We have dreams of someday wintering over there (maybe still 9 years away from that) and would really rather have our own place to come to. In the meantime, it seems the market is picking back up and we kind of feel like we should buy now-in 9-10 years we very well may not be able to afford it. Our kids are 9 and 11 and we plan on spending 1-2 weeks in the winters there with them when school is out.
We went around with a realtor last year and toured Sapphire, Mahogany Run and Point Pleasant. Sapphire felt too much like a hotel and not like it could ever be a home. We absolutely fell in love with Mahogany run. The views and privacy were to die for. But we were about $100,000 over budget there. I felt like MR would be the place I would want to be someday but wouldn't fit our family now. Point PLeasant seemed like it had a good mix -nice views and more for the kids to do right there. And we stayed at the location of the Future Margaritaville on our honeymoon so I have some fond memories of the area.
When I look on places like VRBO and HomeAway it seems like you can keep a condo fairly rented. I am not looking to necessarily make much money on a condo there-just pay for itself. Is this crazy to think I could do it? Also, I am leaning towards letting the resort manage it. I know they are going to take 40% but I am wondering if I can still break even here. I am just hoping I can find the right place soon so that in 10 years maybe i can trade up to Mahogany Run-I can't do this ever if I buy some place and start losing tons of $$.
Any advice is helpful or any other condo complexes we are overlooking-View for me is key. I need to see the ocean and lots of it! Thanks!

beachbuddy77

Registered
01/13/2015

Posts
1

Re: St Thomas condo investment?

January 13, 2015 11:14AM

Be very very vary of letting any "resort" manage your investment. They will tack on so many hidden fees, that you will get no meaningful return from it(leave alone break even). Plus the legal agreement will have so many clauses you wont be able to get out of in anyway or form other than selling the property. Buy a condo that you can have your own property mgr manage it for you. If you don't like them, you can fire them, and hire a diff prop mgmt. firm. I bought a resort managed condo ( elsewhere - not in st johns) and have learnt never ever to let a resort manage property. Fortunately I am able to manage since I own other condos that I manage through property managers ( after a few tries I found the right property manager and has been smooth sailing from there). The portfolio of condos breaks even.
The resorts "sell" units to improve their cashflow situation - they will make 100% sure their interests are first and foremost. They will do anything legal to keep it that way. Some may try to bend the legality, since it can be hard to fight them - some of them are really big names

If you cant afford to buy by yourself now, pool in with someone in your family or friends circle. If not, trust me, there are always opportunities coming - if you look hard enough. happy

Future Islander

Registered
01/17/2006

Posts
819

Re: St Thomas condo investment?

January 14, 2015 09:33AM

Send me a PM for more info on Point Pleasant.

Future Islander

tsmeisen

Registered
11/06/2014

Posts
3

Re: St Thomas condo investment?

January 17, 2015 02:30AM

Point Pleasant would be a good choice. Good hotel plan and a great new management company. The future looks bright there.

Alana33

Registered
07/01/2012

Posts
791

Re: St Thomas condo investment?

January 17, 2015 07:27AM

There are very few 2 bedroom units at Point Pleasant and many other condo associations so you'll have to check around to see pricing and size, if you need more than 1 bedroom and a sleeper sofa to accommodate your needs and family.

Mahogany Run and a couple others offer 2 beds/2 baths. Higher prices, of course.

Future Islander

Registered
01/17/2006

Posts
819

Re: St Thomas condo investment?

January 17, 2015 07:54AM

Yes, there are seven (7) two bedroom/2 bath villas at Point Pleasant...out of 124 villas.

But the 1 bedroom/1 bath villas sleep 4. And the 1 bedroom/2 bath villas sleep 5.

Of course, one needs to consider what the buyer is going to use their "vacation" home for.

We live here part of the year and find a 1 bedroom/1 bath villa comfortable. If you're going to live here full time, or have a larger family, then perhaps another property would better suit you.

winterhater

Registered
01/13/2015

Posts
17

Re: St Thomas condo investment?

January 20, 2015 10:16AM

Why does the 1 bed/2 bath sleep more people than the 1 bed/1 bath? I would assume there is extra square footage in the living area that can accomodate 2 pullouts then?
Are the units with the wrap around decks generally larger? All this helps when I am searching MLS and narrowing down my search! Thanks!

Future Islander

Registered
01/17/2006

Posts
819

Re: St Thomas condo investment?

January 20, 2015 12:23PM

The sleeping arrangements are really up to the owner. The 1 Bedroom/2 Bath villas are generally larger and can accommodate an extra sleeping area (futon?).

Most 1 bedroom/1 Bath villas have a pull out sofa bed. But that doesn't mean you can't have a blow-up mattress to accommodate more people. It just presents a problem with only having 1 bath room and more than 4 people.

Each villa is pretty much unique related to size. So a wrap-around balcony on one villa may not provide the same living area as another villa (with a wrap-around balcony). It's best to visit the property and decide for yourself.

F.I.

winterhater

Registered
01/13/2015

Posts
17

Re: St Thomas condo investment?

January 20, 2015 12:53PM

Gotcha! There are not too many on the market right now to choose from. I am hoping more will go on after high season-a perfect excuse to come and see the differences for ourselves!

Future Islander

Registered
01/17/2006

Posts
819

Re: St Thomas condo investment?

January 20, 2015 02:21PM

Don't hold your breath. The new Hotel Program Management firm is doing very well.

Good villas are hard to come by....and prices are increasing....just ask any local realtor.

But do come for a PMV (Pre-Move Visit...or PPV....Pre Purchase Visit).

winterhater

Registered
01/13/2015

Posts
17

Re: St Thomas condo investment?

January 20, 2015 02:43PM

We have been working with Blue Water Realty and have been told that PP management is really doing a good job. But it always helps to hear from other owners directly. We did do a preliminary visit and toured some complexes but of course could not compare all the different options/layouts in one visit. I want to be armed with as much info as possible so I don't waste my time flying down there everytime something interesting comes on the market (although it could be a wonderful excuse!)

dreimer43

Registered
01/08/2015

Posts
7

Re: St Thomas condo investment?

January 31, 2015 09:34AM

we are also looking for small condo I just started contacting realtors. about ho much do monthly condo charges run? Anyone recommend a reputable realtor to work with?

beachboy

Registered
06/01/2007

Posts
98

Re: St Thomas condo investment?

January 31, 2015 03:44PM

You really need to do a lot of homework before you even start looking. The carrying costs,- dues, water, electricity, maintenance, management = a negative cash flow every year. My electric bill alone often exceeds $1000/month if my condo is rented. The old Marina Market once posted their monthly electric bill and it was over $20,000/month.

Be sure you know what you are getting involved with.

STT Resident

Registered
09/19/2005

Posts
3,293

Re: St Thomas condo investment?

January 31, 2015 04:41PM

You can't compare a market with a condo (not that I believed the old Marina Market WAPA bill anyway!) but the condo fees between different complexes is highly variable depending on what's included. A realtor will have that information. Alana who posts on this forum is a realtor and may be able to offer some general information depending on what you're looking for

Future Islander

Registered
01/17/2006

Posts
819

Re: St Thomas condo investment?

January 31, 2015 05:30PM

I sent you a Private Message.

winterhater

Registered
01/13/2015

Posts
17

Re: St Thomas condo investment?

January 31, 2015 05:55PM

There are so many variables when it comes to fees....look at HOA's in Pavilions and Pools! Plus, some complexes have no water fees. I also have a hard time believing $1000/mo electric bills are the norm? And even if it is, can't it be written off as an expense if it is a rental property?

STT Resident

Registered
09/19/2005

Posts
3,293

Re: St Thomas condo investment?

January 31, 2015 08:25PM

Quote
winterhater
I also have a hard time believing $1000/mo electric bills are the norm? And even if it is, can't it be written off as an expense if it is a rental property?

Vacationers aren't as conservative as we residents. Even if there are prevailing cooling breezes they'll crank up and run the A/C 24/7 - with the patio doors open. They flush the toilet every time they go, take long showers (water pump, electric water heater), Most condos have electric ranges (preferred in homes is gas). Our electricity peaked out at 51¢/kWH and with the changeover to propane have just been reduced this month to 39¢/kWh with further reductions anticipated as the changeover continues and additional power from solar farms come into play, but it's a hefty load to bear. Likely some of it can be written off but it's still a huge chunk of change!

dreimer43

Registered
01/08/2015

Posts
7

Re: St Thomas condo investment?

January 31, 2015 09:35PM

Yes I saw the pool and pavilion was 1632 a month and the norm seems to be upwards of 800. I couldn't swing that monthly payment on top of a mortgage payment unless i could rent it out to break even on HOA fee and electric bills. It is a beautiful place but may be out of my leaguesad Oh well I can always keep playing lotto!

winterhater

Registered
01/13/2015

Posts
17

Re: St Thomas condo investment?

February 01, 2015 09:55AM

I guess you have to figure though, if you are experiencing electric bills from renters then you are also collecting rent! I don't expect to really make much if any money on a condo-I want it to be there and paid for in 10 years when I can personally use it.
So islanders will be experiencing ongoing electric reductions? That is good news! I put solar on my home in the states and am so glad I did as our electric rates are set to skyrocket by 37%.

STT Resident

Registered
09/19/2005

Posts
3,293

Re: St Thomas condo investment?

February 01, 2015 10:31AM

Quote
winterhater
I guess you have to figure though, if you are experiencing electric bills from renters then you are also collecting rent! I don't expect to really make much if any money on a condo-I want it to be there and paid for in 10 years when I can personally use it.
So islanders will be experiencing ongoing electric reductions? That is good news! I put solar on my home in the states and am so glad I did as our electric rates are set to skyrocket by 37%.

I have several friends who own vacation condos here who have exactly the same aim as you but I think not only would all agree that they only break even but would also tell you the other negative which isn't often discussed - the expense of operating, upgrading and interior maintenance.

When you rent out your unit as a vacation rental to cover the operating costs, breaking even doesn't come easily. If you hire a property manager you're going to pay them a percentage of the income. If you do it yourself (vrbo, homeaway, etc.) the transaction is all on you. You need someone close by to call on in case of emergency or if anything at all goes amiss.

It's great to be able to come a few times a year to enjoy your vacation home but not one of my friends doesn't spend at least one of those visits doing basic interior maintenance plus, every few years, upgrading furnishings and appliances in order to keep their units rented and competitive.

Such a lot to take into consideration!

winterhater

Registered
01/13/2015

Posts
17

Re: St Thomas condo investment?

February 01, 2015 03:57PM

Quote
STT Resident
Quote
winterhater
I guess you have to figure though, if you are experiencing electric bills from renters then you are also collecting rent! I don't expect to really make much if any money on a condo-I want it to be there and paid for in 10 years when I can personally use it.
So islanders will be experiencing ongoing electric reductions? That is good news! I put solar on my home in the states and am so glad I did as our electric rates are set to skyrocket by 37%.

I have several friends who own vacation condos here who have exactly the same aim as you but I think not only would all agree that they only break even but would also tell you the other negative which isn't often discussed - the expense of operating, upgrading and interior maintenance.

When you rent out your unit as a vacation rental to cover the operating costs, breaking even doesn't come easily. If you hire a property manager you're going to pay them a percentage of the income. If you do it yourself (vrbo, homeaway, etc.) the transaction is all on you. You need someone close by to call on in case of emergency or if anything at all goes amiss.

It's great to be able to come a few times a year to enjoy your vacation home but not one of my friends doesn't spend at least one of those visits doing basic interior maintenance plus, every few years, upgrading furnishings and appliances in order to keep their units rented and competitive.

Such a lot to take into consideration!
All good things to consider. We renovate homes here in the states and do it in homes that don't even have heat in the winter alot of times, so a week in St thomas doing maintenance sounds like a dream come true. Seriously though, our ultimate use for the condo would be 3 months use ourselves in the future, so anything we need to do in the meantime to keep it rented is OK with us. I think the true cost of electric does make me a little scared though....But property tax is so cheap, maybe that is the tradeoff.....

STT Resident

Registered
09/19/2005

Posts
3,293

Re: St Thomas condo investment?

February 01, 2015 04:34PM

Quote
winterhater
We renovate homes here in the states and do it in homes that don't even have heat in the winter alot of times, so a week in St thomas doing maintenance sounds like a dream come true. .

Oh the stories that can be told! Until you've actually done it you have no idea what a total chore it is here trying to get everything done in a week or two when what you need and want simply isn't available here, when supplies don't arrive from off-island in time, contractors don't show up and "tomorrow" is the key word. The weather becomes the farthest thing from your mind!

winterhater

Registered
01/13/2015

Posts
17

Re: St Thomas condo investment?

February 01, 2015 05:39PM

LOL- I can only imagine. I am thinking we should find a contractor, pick out what we want..go home for a few months and have them call us when it is done! Maybe if we start reno's in May it will be done and ready to be rented by Christmas!

Future Islander

Registered
01/17/2006

Posts
819

Re: St Thomas condo investment?

February 02, 2015 08:14AM

Winterhater:

Probably not a good idea. My friend did what you're thinking of doing. The contractor "moved" into his condo, took a couple of months and did a poor quality job. Unfortunately, because my friend wasn't there, he paid the contractor in advance. Also, probably not good idea.

You need to plan your job.

When we did our villa 7 years ago (1.250 sq. ft. of tile floor throughout the villa and total bath rip-out and remodel), I purchased all of the materials, had the materials on-site, had the crew (4 people) set to start on a Monday (8:00 AM) and I was there throughout the whole 6 days (available when unexpected decisions had to be made or run out for 5 more bags of thin-set). That's right, (only) 6 days. I stayed in a friend's villa while this was going on. I showed up before 8:00 AM, each day, to let the contractors into the villa, I bought lunch for them every day (this kept them on-site) and showed up at 5:00 PM to close up. And I kept them supplied with cold water/soft drinks. Plus, because they were only providing labor, they got paid at the end of the job.

It should also be noted that I knew the quality of workmanship of the contractors since they had performed other similar jobs at my location. So I had a good idea of their skills and work ethic. They even cleaned up.

All in all, a good experience and we're very happy with the end product.

F.I.

Alana33

Registered
07/01/2012

Posts
791

Re: St Thomas condo investment?

February 02, 2015 08:22AM

There are condo complexes here in STT that if you wish to purchase, you will need to pay cash as bank and lenders will not offer a mortgage loan on them if they self insure. Do your homework.

I can supply the name of a good contractor I have used in the past.
He doesn't come cheap but is honest, reliable and does excellent work.

Good luck with whatever you decide.


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