Welcome to the board.
DISCLAIMER: I am a Licensed Real Estate Broker in California USA only. The following does not constitute or create any agency relationship. I am NOT qualified to comment on the laws, customs or market conditions outside the state of California USA. The following is my personal opinion as a SCUBA Diver ONLY and not in a professional capacity and does not constitute professional advice.
Now here are the challenges most are obvious, but some I have observed are often overlooked by investors (particularly number 4).
1. You should have competent professional local management. A weekend rented to some real party animals can really rip a place up.
2. Good management does cost but worth the money. Bad management, also cost,
a lot more. They will (or should) handle boarding the place up for storms etc (remember to include that in the contract).
3. You should count on the property being vacant for at least part of the year, and particularly in the off season. What is a reasonable vacancy factor? I dont know, it could be, 25%, 30% 40% but in the USA in Los Angeles we figure on 25% for apartmetns give or take a tad and vacation rentals will have different factor. A vacation destination like yours may expect a higher vacancy factor particularly once your factor in hurricanes and off season. You need to do your homework on the area and see what others experience. Remember the salesman is selling and may not be your best source of factual information.
3. Close to the water means close to waves, wind and storm surge and damage not to mention the odd hurricane or two (or six) that will blow in during the season. New Orleans has 20 foot storm surge. So that is 20 feet of water above the normal level of the ocean. How high is the property above sea level?
4. The local rental market will dictate what the condo will rent for. Your financial requirements (mortgage, expenses, repairs, management cost, taxes, and insurance) are your problem and not that of the market place. If you need $1,300 dollars (US) a week to cover your cost and the property down the road that was bought 10 years ago is getting $1,000 a week, well, your property will remain.
5. Discuss with your Accountant or TAX attorney the implications of foreign owned rental property and what you will be able to deduct and not deduct. I have no clue what that will be.
6. Beach diving is one thing, but how close is it to the boat dives?
7. Vacation Rentals can be a good thing, but are a risky investment. Vacations are discretionary income and in a bad economy, people dont tend to travel. The global situation will also impact and if people do not feel safe in that part of the world, they will not come in any number. Natually the property is being rented furnished. You will have some theft and vandalism. Don't forget the internatioal tourist (who your are planning on renting to) who writes a bad check or gives a bad credit card knowing they will be long gone before you find out.
Bottom line, your nervous, that is normal. Is it a good or bad deal, only time will tell. Good luck.
I'm always in the market for something like that.
