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.

105 Plover Drive, Duck
Asking: $715,000
Beds-4 Baths-2 SqFt: 1300
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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111 Topsail Court, Duck
Asking: $899,000
Beds-4 Baths-3 SqFt: 2340
This 4 bedroom (2 are En-Suites) 3.5 bath coastal retreat sits on a large homesite (16,000 sq. ft) in the community of Ships Watch located in the sought after Village of Duck! Sited on MORE
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113 Topsail Court, Duck
Asking: $969,000
Beds-4 Baths-3 SqFt: 2837
SELLER WILL CONSIDER SELLER FINANCING. Savor sound views and stunning sunsets from this 4 bedroom, 3.5 bath home located in the coveted Village of Duck. This property sits on a large ho MORE
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116 Pelican Way, Duck
Asking: $1,149,000
Beds-5 Baths-3 SqFt: 2605
A RARE FIND - 5 BEDROOM SEMI-OCEANFRONT (2ND TIER OCEANFRONT) IN SANDERLING!! NO STREETS TO CROSS TO GET TO THE BEACH! BRAND NEW ELEVATOR BEING INSTALLED!! STUNNING OCEAN VIEWS! DIREC 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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134 N Snow Geese Drive, Duck
Asking: $1,499,000
Beds-3 Baths-3 SqFt: 1608
BEEN IN THE FAMILY SINCE IT WAS BUILT. NEVER RENTED. NEVER FLOODED EVER! Currently experiencing beach nourishment! They have taken meticulous care of this home over all the years an MORE
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124 Mallard Drive, Duck
Asking: $1,694,900
Beds-5 Baths-4 SqFt: 2403
The LOWEST PRICED 5 BEDROOM SINGLE FAMILY OCEAN FRONT HOME from Corolla, Duck through Southern Shores! Original Owners and very well maintained Ocean Front Home in Duck! Ocean Views f MORE
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123 Ocean Bay Boulevard, Duck
Asking: $2,675,000
Beds-5 Baths-3 SqFt: 4016
Dune House is a truly unique, newly remodeled 4,016 sq ft beachfront property from renowned home designer Lauren Liess. Perched just behind the dunes on one of the least crowded beaches MORE
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100 Marlin Drive, Duck
Asking: $2,680,000
Beds-5 Baths-5 SqFt: 6493
A true custom masterpiece in the heart of Duck! No pictures can truly do this home justice and it needs to be seen in person to be appreciated. The Saltaire House was designed and bu MORE
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163 Schooner Ridge Drive, Duck
Asking: $2,990,000
Beds-7 Baths-6 SqFt: 3658
NEW PHOTOS COMING SOON! MAJOR UPDATES IN 2023 INCLUDING NEW ROOF, DECKS, WINDOWS, LIGHTING, FLOORING, INTERIOR PAINT, FRONT DOOR, FURNITURE, POOL FENCING, RELOCATED HOT TUB AND MORE! PR MORE
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163 Buffell Head Road, Duck
Asking: $3,899,000
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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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: $6,499,000
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 pri MORE
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3103 S Virginia Dare Trail, Nags Head
Asking: $1,700,000
Beds-4 Baths-4 SqFt: 1799
Nags Head Oceanfront Cottage! Elevator! Ocean Views! Private dune walk and oceanfront gazebo! 75 foot wide oceanfront lot with a large and vegetated dune! Located across the street MORE
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6909 S Virginia Dare Trail, Nags Head
Asking: $2,050,000
Beds-7 Baths-6 SqFt: 3050
**$170K for 2023** This updated oceanfront in Nags Head has something for everyone. Centrally located to the best things that the Outer Banks has to offer this spacious checks all the b 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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2703 Virginia Dare Trail, Nags Head
Asking: $2,575,000
Beds-8 Baths-7 SqFt: 4082
PRETTY MAMA OCEANFRONT W/ FABULOUS OCEAN VIEWS! *** ELEVATOR & HEATED POOL ... and HUGE GAME ROOM W/ MINI KITCHEN! *** EXCELLENT RENTAL INVESTMENT INCOME PRODUCER ... SHOULD BRING IN A MORE
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548 Trolling Lane, Corolla
Asking: $699,000
Beds-4 Baths-3 SqFt: 1926
This cozy cottage is a must see! It has a wonderfully efficient floor plan with everything you need for family and friends to enjoy. The current and previous owners have used an extra MORE
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743 E Plover Court, Corolla
Asking: $849,000
Beds-6 Baths-4 SqFt: 2502
Enjoy the Outer Banks Lifestyle in this Beautiful Home Located in Corolla, NC. This Oceanside Home has an Open Floor Plan that is Perfect for Spending Time with Family & Friends. There MORE
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1084 Corolla Drive, Corolla
Asking: $875,000
Beds-4 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 4 bedroom property when entering from 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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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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654 Pampas Court, Corolla
Asking: $1,200,000
Beds-6 Baths-5 SqFt: 2602
Spectacular new in 2018 six bedroom home in Ocean Sands Section O. Beach access is less than two minute walk. This house is a top producing rental and enjoyed by guests. Like-new refr 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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982 N Harbor View, Corolla
Asking: $1,250,000
Beds-5 Baths-5 SqFt: 3060
This handsome home was completed in November 2020 - elevator, granite, wood floors, private pool! And it is an easy walk to the beach in Whalehead with the Perch walkway about 75 from t MORE
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754 Cormorant Trail, Corolla
Asking: $1,250,000
Beds-7 Baths-8 SqFt: 4668
BEAUTIFUL Corolla Beach Home featuring 7 bedrooms, 8.5 bathrooms with three floors of open living space, spacious covered decks, game room, wet bar, private pool, hot tub, and elevator 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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675 Ocean Lake Trail, Corolla
Asking: $1,390,000
Beds-6 Baths-6 SqFt: 3400
This stunning home has had nothing but upgrades since the current owners purchased it and it sure does show in the rental numbers! Meticulously cared for from the new king mattresses i MORE
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862 Lighthouse Drive, Corolla
Asking: $1,450,000
Beds-5 Baths-5 SqFt: 4423
Dont 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 le MORE
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1259 Atlantic Avenue, Corolla
Asking: $1,599,000
Beds-5 Baths-3 SqFt: 1880
This 5 bedroom 3 bath fishermans cottage sits on one of the most protective dunes in Ocean Hill or Villages at Ocean Hill. Stabilized with sturdy Russian Olives providing extra shelter 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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605 Skimmer Arch, Corolla
Asking: $1,725,000
Beds-6 Baths-4 SqFt: 3425
Corolla Oceanfront! Panoramic ocean views! Large protective dune and a wide sandy beach! This beautiful 6 bedroom and 4 bath home, is conveniently situated next to an Ocean Sands oce MORE
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713 Mainsail Arch, Corolla
Asking: $1,749,000
Beds-4 Baths-2 SqFt: 1724
2024 RENTAL PROJECTION FRON TWIDDY $155,015! THIS ONE IS A WINNER! LOCATED ADJACENT TO THE OPEN SPACE TO THE NORTH GREAT FOR PRIVACY AND VIEWS! Oceanfront Cottage with a private pool i MORE
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1225 Atlantic Avenue, Corolla
Asking: $1,800,000
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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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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239 Hicks Bay Lane, Corolla
Asking: $2,350,000
Beds-7 Baths-6 SqFt: 4526
This sparkling Pine Island semi-oceanfront jewel beckons visitors seeking solace from their busy every-day lives - a true Island Oasis surrounded by unending blue skies, pristine beache MORE
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1261 Sandcastle Drive, Corolla
Asking: $2,425,000
Beds-7 Baths-7 SqFt: 3711
Stunning oceanfront in Villages of Ocean Hill! This well elevated 7 bedroom/7.5 bath home has the most amazing ocean and beach views from ALL 3 levels! On the ground level you can en MORE
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733 Crown Point Circle, Corolla
Asking: $2,450,000
Beds-6 Baths-5 SqFt: 3494
“So Good� is SO accurate!! This 6 bedroom/5.5 bathroom features 4 Kings (3 are Masters), 2 Twins and 2 Pyramid Bunks (super cute, fun & functional!). Ground floor offers an INCRED MORE
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1117 Franklyn Street, Corolla
Asking: $2,499,900
Beds-6 Baths-6 SqFt: 3886
Oceanfront? Yes. Private Pool? Yes. Upgraded? Yes. In Corolla? Yes. Luxurious? Yes, yes, yes! All of it! Experience the ultimate beachfront lifestyle in this extraordinary 6-bedroom (5 MORE
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1231 Atlantic Avenue, Corolla
Asking: $2,698,000
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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1209 Atlantic Avenue, Corolla
Asking: $2,700,000
Beds-5 Baths-6 SqFt: 5000
This beautiful custom oceanfront home is designed to maximize ocean, beach & lighthouse views. Located in Ocean Hill with the largest lots & setbacks in Corolla. Ocean Hill’s paved pr MORE
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1077 Lighthouse Drive, Corolla
Asking: $2,950,000
Beds-6 Baths-7 SqFt: 5751
AN OUTER BANKS GEM WITH SIX BEDROOMS/SEVEN FULL BATHROOMS/TWO HALF BATHS….SITTING ON A 100’ WIDE HOMESITE! BREATH TAKING OCEAN PANORAMA VIEWS FROM JUST ABOUT EVERY ROOM! This home â MORE
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508 Conch Crescent, Corolla
Asking: $2,995,000
Beds-9 Baths-10 SqFt: 5289
508 Conch Crescent is a magnificent, recently built, nine-bedroom residence located in the awesome low-density section of Ocean Sands Section B. This estate size lot is conveniently loc MORE
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472 Land Fall Court, Corolla
Asking: $2,999,000
Beds-8 Baths-6 SqFt: 5762
Remarkable home located on a spacious, well protected, semi-oceanfront parcel in the private oceanside Spindrift Community of Corolla with half acre lots, gated entry, direct beach acce MORE
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779 Columbia Road, Corolla
Asking: $2,999,500
Beds-9 Baths-9 SqFt: 5764
BUCK ISLAND- A gated, manicured, oceanside resort community in Corolla. This Stunning 9 bedroom OCEANFRONT home offers breathtaking views, impressive and artful design. Rental income ex MORE
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925 Lighthouse Drive, Corolla
Asking: $3,500,000
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 subdivision MORE
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383 Deep Neck Road, Corolla
Asking: $3,745,000
Beds-7 Baths-5 SqFt: 5450
Seaclusion was architecturally designed to showcase the unsurpassed views of the Atlantic Ocean. Entering this exquisite home, your focal point is immediately drawn to the expansive eas MORE
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1001 Lighthouse Drive, Corolla
Asking: $5,250,000
Beds-11 Baths-11 SqFt: 5500
The Risen Son Oceanfront custom built home in the sought after Whalehead Club. Looking for a place to invest in this is it! This builder had a design in mind to maximize space while cre MORE
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3317 N Virginia Dare Trail, Kill Devil Hills
Asking: $1,099,000
Beds-4 Baths-2 SqFt: 1356
This newly renovated, furnished 4 bedroom 2 bath Coastal Retreat nests in the dunes of Kill Devil Hills. From your private oceanfront deck, you can watch the sunrise over the Atlantic O MORE
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3311 N Virginia Dare Trail, Kill Devil Hills
Asking: $1,272,500
Beds-4 Baths-2 SqFt: 1288
**Beautiful Kill Devil Hills Oceanfront** High ROI ** Low Expenses** New Decking **$78,200 for 2021 GRI** If you are in the market for strictly an investment property, this home has a 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: $6,090,000
Beds-24 Baths-18 SqFt: 12126
If youve 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 loung MORE
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18 Fourth Avenue, Southern Shores
Asking: $689,900
Beds-4 Baths-2 SqFt: 1260
Large X flood zone lot with highest elevation on the street. Current home would require a total renovation or with just under a ½ acre, a new home up to 3500 + sq. ft either ranch styl MORE
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2 Sea Bass Circle, Southern Shores
Asking: $2,200,000
Beds-4 Baths-4 SqFt: 3370
Dad says to sell so here we are! Family home now ready for new memories to be made. Take advantage of the rental income for 2023 and enjoy this home for many years to come. Walk acros MORE
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64 Ocean Boulevard, Southern Shores
Asking: $3,929,999
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 and MORE
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62 Ocean Boulevard, Southern Shores
Asking: $7,400,000
Beds-7 Baths-7 SqFt: 5220
The Red, White & Blue Americana that is Glory. An unmatched Ocean Front marvel formulated from years of design concepts that brought life into its deep depths of uniqueness from a combi 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