Outer Banks Investment Property & Cash Flow Homes

Real estate has always been a good way to diversify your investment portfolio. Typically, an investor would buy an apartment building, shopping center or rental home based on the capitalization rate or the possibility of appreciation in the value of the property. Nothing exciting but still a good solid investment.

Investment real estate done right, is a multi pronged strategy where the investor can leverage their money while earning income with capital appreciation as the end gain. Stocks can vaporize, real estate lasts forever and historically, has seen positive gain spread out over time. Real estate is not a short term investment.

The typical commercial real estate investment requires the investor to own a shopping center, office or apartment building or a rental home where someone is trying to live. Alien property with no intrinsic value other than investment possibilities. If you own a shopping center or apartment building your investment can deteriorate simply by a change in neighborhood traffic patterns. Stores come and go. Owning homes where people are trying to live puts you in the position of playing landlord trying to collect rent and dealing with the inevitable evictions. Solid investments but messy to own and the best you can do is drive by and look at them or shop at one of your tenants establishments.

Here on the Outer Banks, investment real estate has possibilities not available in most areas. Here you can own a vacation rental home that you can enjoy the use of while simultaneously enjoying the investment benefits of the typical real estate investment. By maximizing the rental potential during the summer vacation season, you can realize income and still get to use the house in the off season.

Vacation Rental Homes

Adding a rental home to your investment portfolio comes with benefits not available to other types of investments. Rental homes on the Outer Banks are not like those where you live. A vacation rental home is only rented during the vacation season, so it ends up being empty for most of the year. Vacation renters pay in full before they check in to your house, so they are never behind on the rent. What other type of investments offer you the opportunity to entertain family and friends in the surroundings of your beach house?

Leverage

Use your 20% invest to earn the appreciation on 100% of the cost of the property. Lets look at a $500,000 house as an example. A 20% down payment of $100,000 will enable the investor to leverage a $500,000 asset and over time, let the equity build. You can postpone when you realize the appreciable gain on the entire $500k by waiting until you retire to sell, thereby taking advantage of the lower tax bracket retirement brings and preserving more of your profit.

Financing

If you live a considerable distance from your potential vacation rental home then you might qualify for a second home loan. A 2nd home loan has the combined advantages of a lower interest rate plus a smaller down payment required. An investor loan has a higher interest rate, requires a larger down payment but you can use the proven rental income to help qualify for a loan. So while an investor loan might be more expensive on the front end it might yield higher returns on the back end due to being able to leverage your investment with the rental income.

Positive Cash Flow

The ultimate real estate investment is when the rental income covers all the expenses. If there is profit left over after holding costs then it is called Positive Cash Flow. Instinctively, investors want to buy a house and have the house pay for itelf. This train of thought is encouraged by the endless stream of advertisements claiming positive cash flows for new developments. This is almost always just hype. If a property truly is paying for itself, we would not see many houses come up for sale. Why would an owner get rid of a house that pays for itself?

Due to the overwhelming popularity of the Outer Banks, it is very rare to find a positive cash flow home. Of course, there is always a point where an increased down payment can turn any home into a positive cash flow.

Most of the time, however, the rental income will help cover some or most of the holding costs. Oddly enough, the more expensive a home is, the greater the odds of achieving positive cash flow. This is because the pricier homes are usually located closer to the beach which is popular with renters.

Holding Costs

This is the true untold story for most people when they invest in real estate. It is the savvy investor who knows what to look for (how to find) the not so obvious costs associated with real estate investments. These hidden cost can seriously affect your Potential Gross Income (PGI).

The obvious expenses being utilities, insurance, maintenance, and property taxes. A lot of so called Positive Cash Flow properties don't look so good when you factor in the often overlooked rental commission. To befuddle you even more, some rental companies will charge a lower commission and then charge fees for services not included in the commission but necessary to manage the property. These fees can cover such items as linens, pool maintenance, credit card costsThis can sometimes add an additional 5% to 10% to the stated commission. Once you have a true picture of the holding cost you can look at the Effective Gross Income and how it will help or hurt your situation.

Cash Flow Worksheet

Here are some sample Proformas to help you analyze your available options and see if this is the course you would like to proceed with. If have heard of these proformas by some other name such as Investment Examinations, Investment Analysis or even the classic 'Performa' they all share one thing and that is the same lack of accuracy.

Every effort has been made to provide accurate data but it needs to be stressed that these proformas should only be used as guidelines. If one of these proformas is your guiding light and is convincing you to follow through with this investment, then please take this Proforma to your accountant. None of us here are accountants and we all hire professionals to do our taxes. Everyone's situation is different so please consult with your personal accountant.

Tax Benefits

The mortgage on a 2nd home is written off just like it is on a personal residence. All maintenance and operating costs are also write offs. There might be depreciation and other benefits depending on your personal situation, so the smart move is to consult with your CPA.

Investment Homes For Sale

Below are some cash flow real estate investments. The investment homes listed below are located fairly close to the ocean and as a result, they tend to produce higher rental income. Oddly enough, the pricier properties are usually cheaper to own. While all real estate is a good investment, rental homes can generate 5%-8% Gross Rental Performance which goes a long way to contributing towards the carrying costs. If a home can generate 10% of the purchase price in annual rental income, then it should get real close to paying for itself.

If you are not sure where you fit in or you are not sure what your options are, give us a call 800-647-1868 and let us help you figure out the best possible scenario for you.

114 E Tuckahoe Drive, Duck
Asking: $699,000
Beds-4 Baths-2 SqFt: 1680
SWEET BEACH COTTAGE! AWESOME LOCATION!! Light and bright, open and spacious, this 4 bedroom beach home is just 5 lots from the ocean in Tuckahoe! Enjoy the amenities of Tuckahoe incl MORE
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109 Duck Ridge Village Court, Duck
Asking: $1,100,000
Beds-6 Baths-5 SqFt: 3217
Fabulous downtown Duck location! Walk to restaurant and stores to gather provisions. Take a stroll to the Town Park for morning Yoga, kayak launch, playground, sunset picnics and live MORE
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150 Scarborough Lane, Duck
Asking: $1,880,000
Beds-6 Baths-6 SqFt: 4394
This Duck beauty is newly refreshed and ready to be yours! With amazing income potential, minutes of walking to the shops and restaurants in the Village, your guests will adore this ho MORE
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100 Lala Court, Duck
Asking: $2,499,900
Beds-7 Baths-7 SqFt: 4209
This is the one you have been waiting for! Located on a coveted 1/2 acre homesite in the exclusive community of Four Seasons. The semi-oceanfront location boasts a direct beach access, MORE
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100 Marlin Drive, Duck
Asking: $2,680,000
Beds-6 Baths-6 SqFt: 7206
Are you serious??? The highest quality built Estate, in the best prime section of Duck, for less per square foot then anything else! You can earn over 12% or much more on your investmen MORE
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137 N Snow Geese Drive, Duck
Asking: $3,200,000
Beds-5 Baths-5 SqFt: 4262
Find your Stairway to Heaven in the spectacular oceanfront home. Tastefully decorated and well-appointed this 5-bedroom home has everything you need, including a Media Room, a fantasti MORE
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163 Buffell Head Road, Duck
Asking: $3,950,000
Beds-8 Baths-7 SqFt: 5908
Exceptional oceanfront estate situated on half an acre with over 100 feet of water frontage and unobstructed views. This home has absolutely everything you could want. Each level has MORE
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2303 S Oneto Lane, Nags Head
Asking: $2,099,000
Beds-5 Baths-5 SqFt: 3299
Rare opportunity to own an "X" flood zone (no flood insurance required) oceanfront home on a quiet cul-de-sac offering privacy from the beach road traffic. In addition, the property is MORE
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3915 S Virginia Dare Trail, Nags Head
Asking: $2,200,000
Beds-7 Baths-6 SqFt: 3122
"Ridge Retreat" is on the National Register of Historic Places in the Old Nags Head district. The home was built in 1979 to reflect iconic features of the unpainted aristocracy, and in MORE
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4709 S Virginia Dare Trail, Nags Head
Asking: $2,350,000
Beds-5 Baths-3 SqFt: 1699
Drone and other photos to be added. The cottage was originally built in 1958 during the halcyon era of the Outer Banks. The cottage’s architecture is a classic example of funct MORE
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2707 S Virginia Dare Trail, Nags Head
Asking: $2,499,000
Beds-8 Baths-7 SqFt: 4082
See updated rental projection in assoc docs. In the heart of Nags Head, Celestial Shores awaits to be your new oceanfront home. The large open reverse floor plan will not disappoint you MORE
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6307 S Virginia Dare Trail, Nags Head
Asking: $2,575,000
Beds-7 Baths-5 SqFt: 3305
A gorgeous oceanfront beach house in Nags Head, NC with 7 bedrooms, and many great features to include: a new roof, beautiful, waterproof bamboo flooring throughout, new stainless steel MORE
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3509 S Virginia Dare Trail, Nags Head
Asking: $3,199,000
Beds-10 Baths-8 SqFt: 4800
AN INVESTOR'S DREAM...INCREDIBLE OPPORTUNITY TO OWN A 10 BEDROOM OCEANFRONT IN THE HEART OF NAGS HEAD! Almost every room in this home features a stunning Ocean View, and the top level MORE
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947 N Harbor View, Corolla
Asking: $650,000
Beds-4 Baths-4 SqFt: 3608
This home was the crown jewell of Corolla when built in 1989. It was one of the original model homes for Monteray Shores. Perched on one of the highest lots in all of Corolla, this h MORE
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990 Cane Garden Bay Circle, Corolla
Asking: $719,000
Beds-4 Baths-3 SqFt: 2267
This desired section of Corolla has it all! Ocean Access, Sound Access & Community Pool! Come experience A Good Life. This home has a handful of open summer weeks to enjoy or fill th MORE
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715 Spinnaker Arch, Corolla
Asking: $999,000
Beds-4 Baths-2 SqFt: 1840
SEMI-OCEANFRONT opportunity in Ocean Sands, Section Q!! Charming SEMI-OF BEACH COTTAGE just steps from the Atlantic ocean!! Well maintained two-story home with multi level decking, HUG MORE
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788 Ranger Road, Corolla
Asking: $1,075,000
Beds-4 Baths-3 SqFt: 3056
Mulberry Cottage in Buck Island is the low country cottage you have been waiting for. Take the golf cart to the restaurants, shops or the beach where the beach cabana service sets up y MORE
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1030 Whalehead Drive, Corolla
Asking: $1,100,000
Beds-8 Baths-5 SqFt: 4250
Whalehead Drive is a great location for an investment home or for personal use. 1030 is a couple lots off the corner for easy access to the beach access. This home has great rental hist MORE
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446 Myrtle Pond Road, Corolla
Asking: $1,200,000
Beds-5 Baths-4 SqFt: 3159
What a great home and what a beautiful location! Start with a super private site nestled amongst majestic live oaks, add a hidden pond and good elevation, and put it together in one of MORE
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614 Saltspray Court, Corolla
Asking: $1,250,000
Beds-7 Baths-4 SqFt: 2556
Beautiful views from this untouched preserve lot overlooking the ocean. 7 bedrooms. Pool. Hot tub. Gorgeous kitchen and living area and decks. Beach access next door. Income producing w MORE
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790 Mercury Road, Corolla
Asking: $1,279,000
Beds-5 Baths-4 SqFt: 3074
No need to look further! This cream-puff located in the coveted gated community of Buck Island in the heart of Corolla has it all. Never rented, gently used and turn-key with many upgra MORE
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603 Skimmer Arch, Corolla
Asking: $1,499,000
Beds-3 Baths-2 SqFt: 1748
Rare Opportunity to Own a Corolla Oceanfront with a Private Pool. Well-Protected by Substantial Dunes. Next to Walkway to Beach. Close to Community Tennis Court. Panoramic View of Ocea MORE
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1202 Bismark Drive, Corolla
Asking: $1,549,000
Beds-7 Baths-7 SqFt: 4365
This spacious 7 Bedroom, 9 Bath Beach Retreat has OCEAN VIEWS, and proximity to the beach, better than most semi-oceanfront homes. Enjoy expansive water views from the entire top floor, MORE
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473 Island Lead Road, Corolla
Asking: $1,649,950
Beds-6 Baths-5 SqFt: 3318
This beautiful, Pine Island home with Ocean View features 6BR, 5BA, 2 half baths. Just a Short Walk to Beach, Community Pool, Tennis, Basketball and Playground. Top floor has an open MORE
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1284 Sandcastle Drive, Corolla
Asking: $1,650,000
Beds-6 Baths-5 SqFt: 3171
Thoughtfully designed and highly elevated semi-oceanfront home situated in the sought after Villages at Ocean Hill community of Corolla. Ocean and wildlife sanctuary views are yours to MORE
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640 Wave Arch, Corolla
Asking: $1,795,000
Beds-7 Baths-6 SqFt: 4028
Lowest price per Square Foot of any Corolla semi-oceanfront! Located in the desirable Ocean Lakes section of Ocean Sands, this 7-bedroom turnkey home features ocean views and is just s MORE
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713 Mainsail Arch, Corolla
Asking: $1,799,000
Beds-4 Baths-2 SqFt: 1724
Oceanfront Cottage with a private pool in Corolla. Completely remodeled 4 bedroom home with tons of upgrades over the years, wood flooring, granite counter tops and custom backsplash. T MORE
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605 Skimmer Arch, Corolla
Asking: $1,980,000
Beds-6 Baths-4 SqFt: 3425
OCEANFRONT, Wild Hearts at Ocean Sands is the perfect turnkey investment. Over 3425 sq. feet with easy cleaning and maintenance. 6 bedrooms, 4 baths and outside shower. Reverse floor pl MORE
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1271 Sandcastle Drive, Corolla
Asking: $1,999,000
Beds-5 Baths-4 SqFt: 3106
Excellent Opportunity to Own Oceanfront with Private Pool in Village of Ocean Hills. Panoramic View of Ocean and View of Lighthouse. Large Lot Protected by Substantial Dunes. Good Ren MORE
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610 Wave Arch, Corolla
Asking: $1,999,999
Beds-8 Baths-8 SqFt: 3550
Built in 2016, this semi oceanfront feels like an oceanfront within 75 feet from the beach. Winner of People's Choice Award in 2017 Parade of Homes, this stunning 3550 sf property has t MORE
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603 Wave Arch, Corolla
Asking: $2,199,000
Beds-6 Baths-5 SqFt: 3512
Oceanfront with Pool and Elevator in Ocean Lakes Community. Wide Beaches and Beautiful views. Three Master Suites, Hardie Plank Siding and Fireplaces. Good Protective Oceanfront Dunes. MORE
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1036 Lighthouse Drive, Corolla
Asking: $2,299,000
Beds-9 Baths-8 SqFt: 4828
You will not want to miss this amazing semi-oceanfront home in the popular Whalehead subdivision! This one has it all and is the perfect rental investment opportunity with a strong rent MORE
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1259 Sandcastle Drive, Corolla
Asking: $2,300,000
Beds-5 Baths-4 SqFt: 2962
Highly elevated & impeccably well-maintained oceanfront retreat situated on a quiet cul-de-sac in the sought after Villages at Ocean Hill community of Corolla. Featuring five spacious b MORE
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1281 Sandcastle Drive, Corolla
Asking: $2,375,000
Beds-7 Baths-5 SqFt: 3735
The pinnacle of oceanfront living in the highly coveted community, The Villages at Ocean Hill! Enjoy panoramic ocean views from this renovated home, situated on a spacious 21,000 sq ft. MORE
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640 Tide Arch, Corolla
Asking: $2,399,995
Beds-7 Baths-7 SqFt: 3291
Extraordinary, Semi-Oceanfront home with amazing ocean views! Situated in an "X flood zone," this striking coastal cottage backs up to the "common area," allowing for more privacy. No d MORE
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947 Whalehead Drive, Corolla
Asking: $2,450,000
Beds-11 Baths-11 SqFt: 6000
Perfectly located 2 lots from the beach with the Mackerel walkway to direct beach access next door, Peace of Heaven has everything you could ever want in a vacation home. Theater room, MORE
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511 Breakers Arch, Corolla
Asking: $2,790,000
Beds-11 Baths-11 SqFt: 6222
Updated, remodeled, renovated and ready to go. Tremendous rental income on the books this year, again! $260,000 on the books with adding back in an owners' prime week at the end of June MORE
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477 Land Fall Court, Corolla
Asking: $3,500,000
Beds-10 Baths-9 SqFt: 5813
10 bedroom oceanfront rental machine with elevator, this updated home has everything renters are looking for in a great family vacation. Pool, hot tub, game room and theatre room offer MORE
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423 Sprig Point, Corolla
Asking: $3,699,900
Beds-8 Baths-7 SqFt: 4908
This is the Pine Island oceanfront that you have been waiting for! You'll love this meticulously maintained, eight-bedroom home with an unbeatable location, a plethora of updates, and MORE
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411 Great Gap Point, Corolla
Asking: $3,999,000
Beds-9 Baths-9 SqFt: 5174
Location, location, location! Oceanfront estate situated on a quiet cul-de-sac and spacious parcel in the sought after Pine Island Community of Corolla. Offering three separate venues i MORE
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277 Whites Point, Corolla
Asking: $4,100,000
Beds-10 Baths-10 SqFt: 5680
Beautifully renovated by Olin Finch over the past 2 years! This home underwent a complete transformation with the addition of 5 bedrooms and 6 new bathrooms, new pool and hot tub, rebu MORE
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101 Station One Lane, Corolla
Asking: $11,000,000
Beds-9 Baths-10 SqFt: 10967
A WELCOME RESPITE - The OUTER BANKS PREMIER LUXURY OCEANFRONT ESTATE! In the picturesque northern Outer Banks where the Atlantic Ocean and Currituck Sound nearly unite, there is a stunn MORE
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2045 N Virginia Dare Trail, Kill Devil Hills
Asking: $1,750,000
Beds-3 Baths-4 SqFt: 2111
This beautifully updated, 3 bedroom oceanfront home has 2 additional bonus rooms with closets and is nestled in a vegetative beach dune in the heart of Kill Devil Hills. Located just so MORE
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1919 N Virginia Dare Trail, Kill Devil Hills
Asking: $1,800,000
Beds-4 Baths-2 SqFt: 1734
Centrally located to everything in The OBX, this gorgeous oceanfront property has sweeping panoramic ocean views! Tastefully decorated, this home offers function and charm. Relax and en MORE
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4 Purple Martin Lane, Southern Shores
Asking: $1,950,000
Beds-4 Baths-3 SqFt: 2276
Located in the peaceful and private area of Southern Shores off Ocean Blvd, this is the oceanfront property that you have been waiting for. The home has been highly cared for by the ow MORE
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Outer Banks Investment Homes
Corolla Investment Homes
Southern Shores Investment Homes
Kill Devil Hills Investment Homes
Nags Head Investment Homes
Duck Investment Homes