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.

130 Poteskeet Drive, Duck
Asking: $699,000
Beds-4 Baths-2 SqFt: 1417
New "Fortified" roof installed 1/0/23! Top quality and wind rated for 130 MPH! Will result in reduced insurance premiums and peace of mind for the new owners! Your in-town Duck oasi MORE
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105 Plover Drive, Duck
Asking: $715,000
Beds-4 Baths-2 SqFt: 1140
One level living, OCEANSIDE IN DUCK! Located on tree lined Plover Drive and within walking distance to Duck Village and the beach! The home has been lovingly cared for and beautifully u MORE
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117 S Snow Geese Drive, Duck
Asking: $815,000
Beds-4 Baths-3 SqFt: 1818
Dream Inn of Duck is the one that you have been waiting for! Location, Love and Elevation! This four bedroom three bath home is so cute and well done that you won’t be able to help MORE
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114 Four Seasons Lane, Duck
Asking: $1,199,000
Beds-6 Baths-6 SqFt: 3144
Central Duck Sweetspot, easy walk to the beach, subdivision amenities and Duck village shops and services. Well made low maintenance family pleaser offers everything a vacationer needs MORE
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124 Mallard Drive, Duck
Asking: $1,749,900
Beds-5 Baths-4 SqFt: 2403
The LOWEST PRICED SINGLE FAMILY OCEAN FRONT HOME from Corolla, Duck thru Southern Shores! Original Owners and very well maintained Ocean Front Home in Duck! Ocean Views from almost ev MORE
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145 Four Seasons Lane, Duck
Asking: $1,799,000
Beds-6 Baths-7 SqFt: 4537
Come take a look at this lovely and spacious Four Seasons home! Located in the heart of Duck, you need not go far to enjoy the uncrowded Duck beaches, wonderful village shops, restauran MORE
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163 Schooner Ridge Drive, Duck
Asking: $2,299,000
Beds-7 Baths-6 SqFt: 3658
2023 NEW: ROOF, DECKS,WINDOWS, FLOORING, PAINT INSIDE, FRONT DOOR, POOL FENCING. OVER $199K IN 2023 INCOME AS OF JANUARY 10TH. With almost 75 feet of oceanfront, enjoy panoramic views o MORE
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124 Carrol Drive, Duck
Asking: $3,050,000
Beds-6 Baths-6 SqFt: 4058
Oceanfront beach estate, professionally decorated and situated in the much loved town of Duck on the Outer Banks of North Carolina. Six bedrooms, six full baths and two half baths..mul 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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158 Four Seasons Lane, Duck
Asking: $4,750,000
Beds-6 Baths-5 SqFt: 5311
Extremely rare opportunity! This magnificent home is 1 of only 10 oceanfronts located in the prestigious highly amenitized community of Four Seasons. This lot is private, surrounded by MORE
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112 S Baum Trail, Duck
Asking: $6,999,000
Beds-7 Baths-6 SqFt: 6284
This beautiful Palmer’s Island oceanfront estate, the epitome of luxury, is just one of thirteen homes in a quiet neighborhood that spans one of the Outer Banks' most exclusive and MORE
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10321 S Old Oregon Inlet Road, Nags Head
Asking: $799,000
Beds-3 Baths-1 SqFt: 912
The "Sea Salt" Cottage at Geri's Place has everything you need for a simple get away to the beach! Located in Nags Head at Mile Post 21 and within a short distance to many local attract MORE
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2304 S Oneto Lane, Nags Head
Asking: $1,445,000
Beds-5 Baths-5 SqFt: 2768
Premeire Location in Nags Head! Rare Semi-oceanfront site, with no road to cross to get to the beach (east side of Hwy 12), on a private cul de sac, amazing ocean views from top two flo MORE
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3915 S Virginia Dare Trail, Nags Head
Asking: $2,250,000
Beds-7 Baths-6 SqFt: 3139
This indeed is a very rare opportunity for you to own in the unpainted aristocracy of Cottage Row in Nags Head. Listed on the National Register of Historic Places in the Old Nags Head D MORE
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3301 S Virginia Dare Trail, Nags Head
Asking: $2,599,900
Beds-8 Baths-7 SqFt: 3862
AMAZING 2022 OWNER RENTS $306,070 !!! - that is a 12% RETURN CASH FLOW! *** 65 FEET WIDE OCEANFRONT LOT! *** "9" BEDROOM OCEANFRONT IN NAGS HEAD! ... Big Daddy's has a Great Name ... Th MORE
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732 E Knot Court, Corolla
Asking: $645,000
Beds-4 Baths-3 SqFt: 1800
Welcome to this Ocean Sands oceanside charmer! The property backs up to community owned wooded land that will ensure a private feel. Its just a short distance to the HOA maintained beac MORE
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747 Sand Dollar Court, Corolla
Asking: $745,000
Beds-4 Baths-2 SqFt: 1682
Whether you are looking for the perfect year-round residence, vacation home or investment opportunity, you do NOT want to miss this absolutely gorgeous, recently remodeled 4-bedroom/2 f MORE
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788 Ranger Road, Corolla
Asking: $850,000
Beds-4 Baths-3 SqFt: 3056
Mulberry Cottage is a low country beach home in the gated community of Buck Island. Designed as a second home or residence with spacious rooms, lots of storage and a large 2 1/2 car ga MORE
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769 Sunrise Court, Corolla
Asking: $879,000
Beds-7 Baths-4 SqFt: 2740
RECENTLY UPDATED NEW FLOORING IN MIDLEVEL AND ENSUITE 2ND FLOOR! You will love the reverse floorplan of Catching Rays, with 7 Bedrooms, 4 baths, private pool, hot tub, two living rooms MORE
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1084 Corolla Drive, Corolla
Asking: $895,000
Beds-5 Baths-4 SqFt: 2605
Welcome to the Goat Locker a 6th row rental home in Whalehead. This is a well-maintained property with large backyard, private pool and hot tub. A 5-bedroom property when entering the f MORE
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742 Starfish Court, Corolla
Asking: $920,000
Beds-7 Baths-4 SqFt: 2634
Located on a quiet cul-de-sac in the Ocean Sands community of Corolla, this 7 bedroom, 4 bath, oceanside retreat boasts an extensive list of home amenities to make for the perfect secon MORE
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806 Corolla Drive, Corolla
Asking: $949,000
Beds-6 Baths-4 SqFt: 4032
Spacious 6-bedroom traditional style home located in the desired Whalehead Club neighborhood of Corolla just minutes to the beach! This gently used second home has all of the amenities MORE
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1010 Corolla Drive, Corolla
Asking: $950,000
Beds-6 Baths-5 SqFt: 2772
Talk about space! This 6 bedroom 5.5 bath house sits on a huge lot convenient to the Herring St beach access. There is a deep green buffer at the back of the property, ample room for MORE
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504 Sandbucket Arch, Corolla
Asking: $999,995
Beds-4 Baths-3 SqFt: 2352
Location, Location, Location! Semi oceanfront home in the sought after neighborhood of Ocean Sands South. What makes Ocean Sands South sought after? Large lots, low home density and MORE
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812 Corolla Drive, Corolla
Asking: $1,045,000
Beds-6 Baths-5 SqFt: 2912
Create family memories for years to come with this beautifully remodeled reversed floor plan 6 bedroom house. Located close to grocery stores and all other kinds of shopping, restaurant MORE
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1205 Windance Lane, Corolla
Asking: $1,195,000
Beds-8 Baths-5 SqFt: 3074
Spacious and updated 8 bedroom home in Corolla that boasts over $114,000 in annual rental income. NEW HVACS IN 2022, NEW POOL HEATER IN 2022, NEW WATER HEATERS, SOME NEW CARPETING AND F MORE
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657 Oleander Court, Corolla
Asking: $1,199,000
Beds-7 Baths-7 SqFt: 3847
Located a short one and a half blocks from 2 ocean access boardwalks, this home is also steps away from the community tennis and pickleball courts, community pool and a 1 mile long comm MORE
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982 N Harbor View, Corolla
Asking: $1,250,000
Beds-5 Baths-5 SqFt: 3060
This handsome home was completed in November 2020! It is an easy walk to the beach in Whalehead with the Perch walkway about 75' from the house. The open concept living includes the li MORE
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826 Lighthouse Drive, Corolla
Asking: $1,295,000
Beds-4 Baths-3 SqFt: 2543
This Whalehead semi-oceanfront vacation home boasts a location just steps from the beach access, ocean views, 4 bedrooms and 3 full baths, multiple decks, and a private pool and hot tub MORE
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909 Corolla Drive, Corolla
Asking: $1,350,000
Beds-6 Baths-4 SqFt: 3154
Don’t miss this amazing investment or second home opportunity! This updated modern retreat is beautifully furnished, turn-key, and has been meticulously maintained. You will find a 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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862 Lighthouse Drive, Corolla
Asking: $1,650,000
Beds-5 Baths-5 SqFt: 4423
Don't miss this remarkable Semi-Oceanfront property in the coveted Whalehead Club subdivision. This well appointed 5 bedroom, 5 and 2 half bath home with elevator offers almost every l MORE
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364 Deep Neck Road, Corolla
Asking: $1,650,000
Beds-6 Baths-4 SqFt: 3333
Experience ocean views, sea breezes, sunsets over the sound, views of the Audubon Wildlife Preserve, and more from this beautiful Pine Island semi-oceanfront home. Situated on a very qu MORE
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958 Lighthouse Drive, Corolla
Asking: $1,950,000
Beds-9 Baths-8 SqFt: 4825
STAR OF THE SEA!! STRONG RENTALS! SWEET LOCATION WITH OCEAN VIEWS...AND STEPS TO THE BEACH!! ELEVATOR! HEATED POOL! THEATER ROOM! Tastefully updated and furnished, light and bright, MORE
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426 Sprig Point, Corolla
Asking: $1,995,000
Beds-7 Baths-5 SqFt: 4265
Welcome to Sea N’ Stars, located in the preeminent Outer Banks community of Pine Island. Nestled on a beautifully landscaped, corner cul-de-sac lot, this home has been designed to MORE
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545 Porpoise Point, Corolla
Asking: $1,999,000
Beds-8 Baths-6 SqFt: 3209
This beautiful oceanfront home on Corolla's lovely, expansive beaches is a must see! With eight bedrooms, a second living area, private pool and great views, this expansive home has eve MORE
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1225 Atlantic Avenue, Corolla
Asking: $2,000,000
Beds-4 Baths-4 SqFt: 3400
Custom built, well maintained, and beautifully appointed oceanfront retreat boasting unparalleled views of the Atlantic. This classic Nags Head style cottage features tasteful upgrades MORE
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991 Whalehead Drive, Corolla
Asking: $2,139,000
Beds-9 Baths-9 SqFt: 6054
Outstanding investment home! Coastal Elegance at it's finest with every possible amenity your renters could want. Fantastic Ocean Views, Quality Built by Olin Finch, strong and consiste MORE
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1255 Atlantic Avenue, Corolla
Asking: $2,150,000
Beds-6 Baths-6 SqFt: 3737
Perched on one of the highest Oceanfront Dunes, gives you the best Ocean Views of the Splashing Surf ! Excellent setup with 6 Bedrooms 6 Baths, upscale Kitchen, spacious Living & Dining MORE
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1305 Sandcastle Drive, Corolla
Asking: $2,269,000
Beds-6 Baths-5 SqFt: 3326
This beautiful, and nicely elevated, oceanfront property is located directly on the beach and offers stunning ocean views and easy access to the water. Located just before the paved roa MORE
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1247 Atlantic Avenue, Corolla
Asking: $2,400,000
Beds-5 Baths-3 SqFt: 4702
Unique Oceanfront Estate with Magnificent Ocean Views. This Craftsman-Style Cottage is situated on a Elevated 28,000 Sq Ft Lot and in an X Flood Zone! (Flood Insurance optional) Custom MORE
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1241 Atlantic Avenue, Corolla
Asking: $2,695,000
Beds-8 Baths-8 SqFt: 4909
Situated in the sought-after community of Ocean Hill, this grand oceanfront estate will captivate you at every turn. Stunning architectural features abound in this Victorian style rever MORE
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1231 Atlantic Avenue, Corolla
Asking: $2,795,000
Beds-7 Baths-5 SqFt: 5112
This home sits on one of the highest lots in Ocean Hill giving Spectacular Ocean Views from the living room, kitchen, dining room and screened porch all on the east side of the house, m MORE
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417 Deep Neck Road, Corolla
Asking: $3,199,900
Beds-6 Baths-6 SqFt: 4536
A striking palatial design awaits the next discerning buyer of this fantastic oceanfront estate in the coveted Pine Island community of Corolla. Endless summer days for that perfect fam MORE
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925 Lighthouse Drive, Corolla
Asking: $3,600,000
Beds-6 Baths-6 SqFt: 5480
If you are looking for the perfect vacation home or investment opportunity, look no further than "Iselin". This gorgeous oceanfront 7-bedroom/6-bath home in the Whalehead Club subdivisi MORE
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1001 Lighthouse Drive, Corolla
Asking: $5,000,000
Beds-11 Baths-11 SqFt: 5500
High efficacy home, well built for rentals. Rental projection on file to gross between $415,000 - $475,000. “Risen Son” has over $400,000 of gross rental income in 2022 and ov MORE
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363 Deep Neck Road, Corolla
Asking: $7,000,000
Beds-10 Baths-11 SqFt: 7611
Edgewater View is a stunning 10 bedroom, 11.5 bath oceanfront retreat in Corolla! Sporting a new outdoor living area, new saltwater pool and a recent major expansion and upgrade of the MORE
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3317 N Virginia Dare Trail, Kill Devil Hills
Asking: $1,295,000
Beds-4 Baths-2 SqFt: 1356
Welcome to 3317 N Virginia Dare Trail, a newly renovated, permitted 4 bedroom 2 bath Coastal Retreat nestled in the dunes of Kill Devil Hills. Beautifully appointed coastal elegant dec MORE
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803 S Virginia Dare Trail, Kill Devil Hills
Asking: $4,600,000
Beds-12 Baths-11 SqFt: 8200
Absolutely amazing 12 bedroom Oceanfront estate available for purchase. Turnkey investment at the perfect time of year to capitalize on the rental season. Currently rented only a porti MORE
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1505 N Virginia Dare Trail, Kill Devil Hills
Asking: $6,300,000
Beds-24 Baths-18 SqFt: 12126
If you've ever wanted to live like Royalty this Oceanfront Estate is for YOU! The home is equipped with an expansive great room, a premium kitchen, an in home theater, custom wine loun MORE
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64 Ocean Boulevard, Southern Shores
Asking: $4,100,000
Beds-5 Baths-6 SqFt: 4705
Welcome to 64 Ocean Boulevard where you’ll be met with the best in luxury class beach living. This contemporary, three-level oceanfront home in Southern Shores is simply stunning 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