So, finally pondering taking a plunge and purchasing a beach house on Crystal Beach, Surfside, or maybe Galveston. I've never owned one before. Ideally, I would like to rent it out most of the summer, and use it for my family during the cooler months. What do i need to know? What's approximate flood insurance for AE zoned property? What are common maintenance issues?

TIA

Kinda depends are you buying beach front, bay front, on a canal or just a couple streets off of the beach?

Prices at Pointe West are really low right now. Fees aren't great but they rent well enough to cover your nut in the Summer months.

J-TRAIN51 said:

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Kinda depends are you buying beach front, bay front, on a canal or just a couple streets off of the beach?

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I'd prefer the beach side. The flood maps where i'm looking show AE, as opposed to VE or V, which seems pretty uniform over the islands, except for the immediate beach front homes.

We have had a place in Crystal Beach for 14 yrs. but we dont. We see what renters do over a weekend to a place. Just retired and it will be our permanent residence. Look for a V zone for flood ins. We are 5 miles from the ferry and our beach is actually growing. Further east you go, the beach gets smaller. Once off the seawall or the Strand, Galveston is a pretty nasty place. email lostshoe2003atyahoo.com if you'd like more info.

edit : but we dont rent.

We owned a 4 bedroom 3 bath (new construction) for about 4 years in Pirates Beach in Galveston. We sold it 6 years ago. We owned this with the idea of renting as much as possible and using on any off weeks/weekends for personal use. We averaged 35 rental events a year (weekly rentals in the summer, holidays, and Galveston special events and weekends most of the other times). In a typical year rents covered 70-75% of our yearly costs. We did everything ourselves. I am a experienced long term and short term rental owner and Galveston rentals were exhausting. Probably 50% of renters called with complaints late at night during their stay. It eventually became enough of a hassle that we outsourced it to a local company. They didn't exist or were not as established but I would consider a company like turnkeyvr.com. At the time, I believe our flood insurance was $300/month. Hope that helps.

cappycap said:

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We owned a 4 bedroom 3 bath (new construction) for about 4 years in Pirates Beach in Galveston. We sold it 6 years ago. We owned this with the idea of renting as much as possible and using on any off weeks/weekends for personal use. We averaged 35 rental events a year (weekly rentals in the summer, holidays, and Galveston special events and weekends most of the other times). In a typical year rents covered 70-75% of our yearly costs. We did everything ourselves. I am a experienced long term and short term rental owner and Galveston rentals were exhausting. Probably 50% of renters called with complaints late at night during their stay. It eventually became enough of a hassle that we outsourced it to a local company. They didn't exist or were not as established but I would consider a company like turnkeyvr.com. At the time, I believe our flood insurance was $300/month. Hope that helps.

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Absolutely! Won't be involved. Thanks!

cappycap said:

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We owned a 4 bedroom 3 bath (new construction) for about 4 years in Pirates Beach in Galveston. We sold it 6 years ago. We owned this with the idea of renting as much as possible and using on any off weeks/weekends for personal use. We averaged 35 rental events a year (weekly rentals in the summer, holidays, and Galveston special events and weekends most of the other times). In a typical year rents covered 70-75% of our yearly costs. We did everything ourselves. I am a experienced long term and short term rental owner and Galveston rentals were exhausting. Probably 50% of renters called with complaints late at night during their stay. It eventually became enough of a hassle that we outsourced it to a local company. They didn't exist or were not as established but I would consider a company like turnkeyvr.com. At the time, I believe our flood insurance was $300/month. Hope that helps.

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Did you own it during IKE?

Was curious how that area held up to the storm surge

We did own it during Ike. Our house was on the beach side of Pirates Beach and one of the farthest houses from the beach (close to the highway). The new construction homes in the neighborhood held up very well. We had zero roof or siding damage. The only damage from Ike was the tide surge which caused the breakaway garage walls to well...break away. We had a golf cart in the garage that floated away. My mom had a small place a few miles closer to the seawall (sunny beach) and she went from 3rd row to 2nd and almost 1st row due to Ike.

woodyhayes said:

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We have had a place in Crystal Beach for 14 yrs. but we dont. We see what renters do over a weekend to a place. Just retired and it will be our permanent residence. Look for a V zone for flood ins. We are 5 miles from the ferry and our beach is actually growing. Further east you go, the beach gets smaller. Once off the seawall or the Strand, Galveston is a pretty nasty place. email lostshoe2003atyahoo.com if you'd like more info.

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I wouldn't look for a super nice place for that reason. Is V zone better than AE? I thought V was closer to the beach.

cappycap said:

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We owned a 4 bedroom 3 bath (new construction) for about 4 years in Pirates Beach in Galveston. We sold it 6 years ago. We owned this with the idea of renting as much as possible and using on any off weeks/weekends for personal use. We averaged 35 rental events a year (weekly rentals in the summer, holidays, and Galveston special events and weekends most of the other times). In a typical year rents covered 70-75% of our yearly costs. We did everything ourselves. I am a experienced long term and short term rental owner and Galveston rentals were exhausting. Probably 50% of renters called with complaints late at night during their stay. It eventually became enough of a hassle that we outsourced it to a local company. They didn't exist or were not as established but I would consider a company like turnkeyvr.com. At the time, I believe our flood insurance was $300/month. Hope that helps.

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I was strongly considering going with a rental company from the get go, and from your experience it sounds worth it. When you say rental events, i assume you mean longer than a day? Probably a stupid question, but i'm never owned a rental property like this!

Rental Event =
Only weekly rentals in the summer months (Our weekly rate 6 years ago was $2k a week)
Only weekly rentals for Galveston events (usually until last minute): Mardi Gras, motorcycle festival, Dickens on the strand, spring break, Thanksgiving, Christmas, etc
Weekends for every other time of the year

You can shop around for the least expensive % management fee. The national companies like TurnkeyVR are significantly less expensive. The local companies are better dialed in to local events, better cleaning and maintenance crews.

Do they typically charge flat fee or percentage?

Percentage of rental revenue. Sometimes they charge renter a cleaning fee on top of the percentage charged to homeowner. I believe Galveston property managers were typically 25-30% for short term rentals. IRC online managers like TurnkeyVR were between 10-15%.

wow. that's a high cut. how do they justify the cost?

Weekly rentals require cleaning crews to clean in a very short time period (3-4 hour window), typically on a Sunday (Example is if check-out is at 11am and check-in is at 3pm). 24 X 7 answering service so owner doesn't have to listen to unreasonably crazy renters. Off hours maintenance repairs. I found it almost impossible to find a reliable cleaning crew that didn't work for one of the agencies so they have the market somewhat cornered. You miss a cleaning on a weekly rental then you are in a pickle...you either lose $2k for a weekly rental, try to find someone to clean it at 10pm on a Sunday night (impossible) or risk getting a terrible rating on the online vacation portals. Also, if you do rent it yourself be prepared for every renter whom you withhold deposit from to say they are going to sue you and/or give you negative feedback online.

Sounds like it might could be worth it then!

My parents have a house in indian beach (west end of galveston) that they are about to put in a rental program.

VRBO is 8%
Sand N Sea and Ryson are full service and 20%

They are going to do full service, likely Sand N Sea because of the headaches mentioned above.

They just want to rent it enough to cover some of the carrying cost. Taxes and Insurance on their place is $50k per year.

Thanks for updated info. If you use Sand N Sea but also want to advertise on other websites like VRBO then is the total 28%?

Sand N Sea was the biggest player in Galveston when I owned there and some of the smaller operations had slightly smaller fees.

let's be friends

50k??? How big a house do they have?

About 4K sf beachfront

Appraisal is $900k+

Sure, Johnston MS is awesome

I have read the contracts for my mom

If I recall, ryson adds the vrbo % if you agree to be on vrbo with them

When my parents bought their house a few years ago and it was a sand n sea rental that we rented for a few years in a row. The folks that owned it lived in Minnesota. A fun Aggie fact is that it was built by Buzbee in the '90s. We talked to sand and sea about keeping it in their rental program but they would only let you use your house for two weeks in the summer. Now their terms are much more liberal because they are getting killed by vrbo etc.

nonameag99 said:

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About 4K sf beachfront
Appraisal is $900k+

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Neophyte. Help me out. 4000 square feet. 80' front by 50' deep? The reverse? Other?
So, the 50k+ taxes on $900+K....can you break that down by
recipient (basic local vs. flood/windstorm, etc.)...Is that 50 mostly inclusive?
Sorry, have a 30 yr recurring dream of catching a bull red in the surf on W. Galveston. A snook would do. Then, I'd walk home. That. And a beer for dawn.
If some of the Q's are too intrusive, it's cool.

nonameag99 said:

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Sure, Johnston MS is awesome

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The Greyhounds are now ludicrously known as Meyerland MS. A.S. Johnston is now considered evil, and evidence of his existence will soon vanish. What you do today could indeed affect your corpse 115 years after you're dead. Plan accordingly!

88jrt06 said:

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nonameag99 said:

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About 4K sf beachfront
Appraisal is $900k+

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Neophyte. Help me out. 4000 square feet. 80' front by 50' deep? The reverse? Other?
So, the 50k+ taxes on $900+K....can you break that down by
recipient (basic local vs. flood/windstorm, etc.)...Is that 50 mostly inclusive?
Sorry, have a 30 yr recurring dream of catching a bull red in the surf on W. Galveston. A snook would do. Then, I'd walk home. That. And a beer for dawn.
If some of the Q's are too intrusive, it's cool.

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Forgot about this thread

Just looked it up. Appraisal is $875k

Taxes are $22k

I want to say windstorm is like almost $20k

Flood is Several thousand

The rest isn't so bad

88jrt06 said:

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nonameag99 said:

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Sure, Johnston MS is awesome

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The Greyhounds are now ludicrously known as Meyerland MS. A.S. Johnston is now considered evil, and evidence of his existence will soon vanish. What you do today could indeed affect your corpse 115 years after you're dead. Plan accordingly!

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Wow, I used to own a house that was zoned to Johnston. I didn't know that they changed the name.

Quote:

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I want to say windstorm is like almost $20k

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nonameag99 said:

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88jrt06 said:

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nonameag99 said:

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Sure, Johnston MS is awesome

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The Greyhounds are now ludicrously known as Meyerland MS. A.S. Johnston is now considered evil, and evidence of his existence will soon vanish. What you do today could indeed affect your corpse 115 years after you're dead. Plan accordingly!

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Wow, I used to own a house that was zoned to Johnston. I didn't know that they changed the name.

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Yeah, just drove by and noticed the sign this week. Of course many of those kids are still zoned to the Westbury HS Rebels, errr...Huskies(!). My sis went to Johnston...
And hey, thanks for the $ info above. Helpful.

Like Cappy, I owned a home in Pirates Beach. We used Sand N Sea as our rental manager.

Our home was just a two-bedroom, but it had a good view of the water (and great deck) and was only a short walk to the beach.

Unfortunately, two bedrooms are tough to rent, and rental rates in Galveston have fallen hard in recent years due to so much new construction and competition from VRBO, AirBNB and new management companies. Our revenue dropped about 25 percent from 2014 to 2017, despite more rental nights. We finally decided to throw in the towel and sell earlier this year.

Bottom line: Our rental income never covered our total expenses (because the house was too small to command top dollar rates). Our goal was to cover taxes and insurance, which we were able to do some years, Our insurance averaged about $8,000 a year (flood, wind, homeowners and liability) and our taxes were around $5,500.

I recommend Sand N Sea but you need to know going in that there are lots of little things these management companies do that are irritating. Their customer is the renter, and they will nickle-and-dime you for every little thing. I know people who use Gary Greene and we've shared plenty of similar war stories.

Plus, damage and wear and tear were much worse than I ever anticipated. I used to cringe every time we opened the door. LOL. And it's tough to work around the rental schedule; if it rents, you can't use the house, and if it doesn't rent, you aren't making money.

Happy to share more info if you like.

Thanks everyone for sharing their experiences. Recently I looked into buying an investment beach propertie and after doing the math, I just couldn't justify the economics at current asking prices. Aside from the hassle and hidden costs, people also need to realize that rental volume and value of the property is highly correlated with the economy (much more so than a primary homestead) and we are likely at the tail end of a historic bull run. As a result, I stashed some cash away to buy when the recession hits as I think that might be the smarter thing to do.

Another major issue with beach house rentals is wear and tear. Maintenance is very expensive; everything outside rusts or falls apart, and your renters will wreck/steal everything inside.

We replaced our shower faucet three times in eight years; the sink faucet twice. Outdoor furniture would last a season or two, indoor furniture maybe four years.

Renters, of course, do all kinds of wacky things. The difference with a vacation rental is that you have new renters every few days and they aren't worried about what they leave behind in their wake.