Build Your Investing Guardrails
Time on task over time — that’s how you win in this business. There are things you can do to make sure your investing journey stays a good and profitable one.
We’re all getting older — just the way it is. And if you don’t want to work until your dying day, you’re going to need a source of income other than you. Most people reading this already have a diversified portfolio that includes cash-flowing real estate alongside savings and retirement accounts. If you’re in your mid-30s, 40s, or even 50s and don’t own a vacation rental property yet, it’s worth a serious look — because 10, 20, or 30 years from now you’ll likely want to slow down and travel, and that takes cash flow. Buy the right property now, let renters help cover the mortgage, and by the time you’re ready to retire you could own an asset that’s appreciated and is still generating income.
It’s not just theory — people around the country are doing exactly this and succeeding. But you need to be smart about what you buy, and equally smart about what you sell.
I heard about someone recently who bought at the height of the pandemic run-up and is now in a tough spot: rents are nowhere near pandemic-era numbers, the cost to own has jumped, and they can’t get down here to use the property as much as they’d hoped. Someone called that “getting burned” by real estate. I don’t see it that way — he got bad advice and ended up with a bad investment. That’s on the advice, not the market. Over the long run — more than 30 years of data, for both houses and condos — beach real estate here has gone up significantly. The people who get hurt are usually the ones who come in late in a boom cycle, just before it turns, riding a wave everyone else seems to be winning on.
That’s why you need rules.
Real estate is a great way to build wealth and set yourself up for the life you want in retirement — but nothing is guaranteed, and real estate carries real risk. Having rules dramatically improves your odds of surviving the bad markets long enough to benefit from the good ones.
(Note: Past performance does not guarantee future results, and real estate investing carries risk.)
Start Here: Five Investing Guardrails
The smart investors I’ve worked with over my career have criteria for investing — and they stick to them. Here are five of mine:
- The property must cash flow — day one. If it doesn’t, I pass.
- It has to cash flow with ordinary rental income — not a best-case, maximum-occupancy year.
- If the deal only works after refinancing to a lower rate, I pass. It needs to work day one.
- Play the long game. Prices here have dropped at times — but over longer periods they’ve doubled, even tripled, while renters helped pay for the property.
- Check — and double-check — the HOA. Make sure it’s financially sound, and that the building itself is structurally sound. You don’t want a surprise assessment or rule change that upends your investment.
Everyone’s criteria will differ depending on their goals — but smart investors have theirs dialed in, and they stick to them.
Tools We Use — and Recommend
Between our own portfolio, our property management company (100+ properties under management), and our real estate team’s 1,500+ transactions totaling nearly $800 million, we’ve built tools we think are invaluable to investors, owners, and sellers here at the beach:
- Market Monitor — tracks short-term price trends in the specific neighborhoods or buildings you care about, so you know whether asking prices are trending up, down, or sideways. Get List Price Trend Updates
- SaleAbility — shows where your property is strongest and weakest against the competition for the same buyer, so you can use that in pricing, marketing, and negotiation. Request a SaleAbility Analysis
- Investing Criteria Worksheet — helps you set your must-have parameters before you start shopping, instead of falling in love with a property first and trying to make the numbers work after. Get the Worksheet
See the Current Numbers by Market
This week’s report takes a closer look at Destin, where condos and houses are telling two very different stories:
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Every week, subscribers get this indicator’s latest reading for their market — before it’s published here.
Final Thoughts
Whether you’re buying, selling, or holding, our job is to help you see your real position clearly — not guess at it.
- Buyers: Get notified when list price trends shift in your target market
- Sellers: Request a complimentary SaleAbility Analysis and pricing strategy
- Owners: Schedule a Rental Performance Review
Or reach our team directly at 850-654-3325 to talk through where you stand.