robbio said:

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I'm considering investing in a Condo at Port Aransas. Any drawbacks to this kind of investment?

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• Absentee maintenance - unless you plan on doing the cleaning and repairs yourself, these costs add up, and may impact your targeted returns
• Storms and storm insurance - one hurricane is all it takes to blow your assumptions away.
• Cost of Capital - unless you plan on financing it with your own spare change, interest rates are a lot higher than they were a few years ago when people rushed to buy rental condos. It is a rare property that can cash flow positive from day 1 these days, and property value appreciation is in no way guaranteed.
• Condo Fees - depends on the property, of course, but these mostly are out of your control, and grow more quickly than your value in some cases.
• Insurance - best case is rapidly appreciating insurance costs. Worst case is they refuse to insure your property at some point in the future. Flood insurance is an extra cost you will likely need to budget for.
• Transaction costs - include BOTH buying expenses and selling expenses in your up-front analysis, as you will likely want to liquidate at some point. This time-zero expense is sometimes insurmountable in a realistic financial analysis.