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Crazy Real Estate Market

lescooper
June 20, 2018 04:40PM

Registered: 3 years ago
Posts: 140

On St Croix, condo sale prices and rental rates from risen dramatically since the hurricane. I own a condo in Schooner Bay and just a few months ago you could buy a 2 br, 2 bath condo for $130,000 to $150,000. Rental rates were $1,600 a month.

The most recent listing is at $235,000. And this is not an updated condo. Rental rates are now ranging from $2,400 to $3,000.

I'm now looking to buy a rental property as an investment. Would be interested in opinions if this market is sustainable? If the refinery reopening news proves true, then I would feel confident in purchasing now before the market goes even crazier.

Re: Crazy Real Estate Market

Scubadoo
June 20, 2018 09:39PM

Registered: 4 years ago
Posts: 2,035

Just because the listings are higher doesn't mean they will get their asking price. I've been watching the same condo listings at higher prices for months, mostly not moving and also seen some of them come down after several months, a few times, before going off market, presumably sold. And there are still plenty of lower priced condos on the market. Condo Inventory is definitely a bit lower than it was a year ago but it's been steady, hovering around 80 on STX, more recently down to 75 today. Not surprising the rental rates are up due to shortage of rentals with all the Irmaria recovery/construction folks still on island.

Re: Crazy Real Estate Market

terry
June 21, 2018 10:17AM

Registered: 13 years ago
Posts: 2,544

several years ago when things were booming and prices were high there were several people who bought condos at STC to do just what you are thinking about. When things slowed down most lost their condo to foreclosure. One lady even asked the board to lower her condo fees since she could no longer get the high rental fees. I asked her would she have sent in more money if the rental rates went up? She lost her place.
Be careful! Only invest what you can afford to lose.

Re: Crazy Real Estate Market

stcmike
June 21, 2018 12:31PM

Registered: 9 years ago
Posts: 239

A person could ask any price.what it sells for may be drastically different. I would wait for the prices to come back down.

Re: Crazy Real Estate Market

islandjoan
June 21, 2018 01:05PM

Registered: 11 years ago
Posts: 1,568

One would hope that the prices that are being asked, came from guidance from a realtor who has the comps and knows what the market will yield, and then adjusted the asking price by 20-30% more to account for negotiating back and forth.

Re: Crazy Real Estate Market

singlefin
June 21, 2018 01:23PM

Registered: 4 years ago
Posts: 681

Hoping for the best and preparing for the worst gets you nowhere. Look around and use some common sense.
Employment is up, the stock market is up, corporate investment is up, all across the continental US.
Locally, federal dollars are pouring in, the refinery is being prepped for a restart, and real estate prices are going up. Thousands of more people will be arriving on-island soon.
Now is the time to invest... in real estate, in a business, yourself. Instead of wasting your time watching and believing in all the naysayers on fake news, invest your time & energy into something positive for yourself!
Now is the time!

Re: Crazy Real Estate Market

Alana33
June 21, 2018 04:08PM

Registered: 6 years ago
Posts: 11,872

Quote
islandjoan
One would hope that the prices that are being asked, came from guidance from a realtor who has the comps and knows what the market will yield, and then adjusted the asking price by 20-30% more to account for negotiating back and forth.

You can lead an owner to a realistic listing price but it's ultimately their decision.

Then an open house for Realtors happens and the price is usually adjusted downwards after input.

Find something you like, can afford and can carry all expenses on in a dry spell or a prolonged drought.

Don't overly upgrade in a location you may not get a return on.

Have your realtor do comps.
If a condo, request their by laws and HOA info including financials and insurance funding.

Basically, limited inventory leads to higher prices but you make the decision on what you're willing to spend for what you're buying.

Re: Crazy Real Estate Market

lescooper
June 21, 2018 07:24PM

Registered: 3 years ago
Posts: 140

Thanks for all the great comments. I tend to lean towards Singlefin's positive outlook. I just got back to the states after 10 days on St Croix looking at condos for sale. The one's under $200,000 were primary in central island complexes that I believe would scare off refinery workers from stateside.

Schooner Bay had one 3br for $300,000 that needed a lot of updating. Club St Croix had one 2 br unit for $235,000 that was a dump. Other nice available condo's were over $300,000 and not as centrally located. A new listing came up in Schooner for a 2br at $235,000. And it needs a lot of updating.

Since getting home, I found a fsbo in Schooner for $220,000 that has been completely updated and furnished with high end appliances and furniture. I put a contract on it today.

If the refinery actually reopens, I made a great investment. If it doesn't, I won't get badly burnt. Thanks everyone!!!

Re: Crazy Real Estate Market

Alana33
June 21, 2018 09:31PM

Registered: 6 years ago
Posts: 11,872

Good luck and hope it fulfills your dream.

Re: Crazy Real Estate Market

janeinstx
June 21, 2018 09:59PM

Registered: 6 years ago
Posts: 651

As soon as you are ready to rent it let me know. I know several people looking.

Re: Crazy Real Estate Market

lescooper
June 22, 2018 12:20AM

Registered: 3 years ago
Posts: 140

I'll share something a little unique that may be of interest to those who, like I was, unaware of this option to buy a rental property.

I have a couple Ira retirement accounts that have been making me a whopping 3 1/2% return. I stumbled on to some information about a Self Directed Ira option. In short, you can set up a trust and and invest in real estate while keeping the same tax advantages.

In my situation, my potential rental income far exceeds what I've been making with my Vanguard investment accounts. Wish I had of know about this sooner

Re: Crazy Real Estate Market

Gator's Mom
June 22, 2018 06:46AM

Registered: 5 years ago
Posts: 848

So..... how do you take your required distributions at age 70 1/2 if your retirement assets are in real estate?



Quote
lescooper
I'll share something a little unique that may be of interest to those who, like I was, unaware of this option to buy a rental property.

I have a couple Ira retirement accounts that have been making me a whopping 3 1/2% return. I stumbled on to some information about a Self Directed Ira option. In short, you can set up a trust and and invest in real estate while keeping the same tax advantages.

In my situation, my potential rental income far exceeds what I've been making with my Vanguard investment accounts. Wish I had of know about this sooner

Re: Crazy Real Estate Market

lescooper
June 22, 2018 08:29AM

Registered: 3 years ago
Posts: 140

There are several options to satisfy the required distributions. In my case I'll be paying myself the rental income to supliment my social security.

Just Google it and you'll find answers to all your questions. There are companies that specialize in helping to setup and manage this type of ira.

Re: Crazy Real Estate Market

Gator's Mom
June 22, 2018 09:23AM

Registered: 5 years ago
Posts: 848

You set up an IRS LLC. Your tenant will pay your IRA LLC the monthly rent. Then, in turn your IRA LLC will pay you the rental income as distributions from the IRA. The LLC will manage expenses for the property as well.

Good luck. Did my own internet search happy.

Quote
lescooper
There are several options to satisfy the required distributions. In my case I'll be paying myself the rental income to supliment my social security.

Just Google it and you'll find answers to all your questions. There are companies that specialize in helping to setup and manage this type of ira.

Re: Crazy Real Estate Market

SkysTheLimit
June 22, 2018 10:10AM

Registered: 11 years ago
Posts: 1,876

Quote
lescooper
I'll share something a little unique that may be of interest to those who, like I was, unaware of this option to buy a rental property.

I have a couple Ira retirement accounts that have been making me a whopping 3 1/2% return. I stumbled on to some information about a Self Directed Ira option. In short, you can set up a trust and and invest in real estate while keeping the same tax advantages.

In my situation, my potential rental income far exceeds what I've been making with my Vanguard investment accounts. Wish I had of know about this sooner

3.5%? You definitely needed to move that money.

Re: Crazy Real Estate Market

Fishbait
June 22, 2018 11:02AM

Registered: 1 year ago
Posts: 71

We're under contract in Sweet Lime 2 in Carambola and of course the RE Agent is promising us top dollar rental income from either a long term or corporate/FEMA short term tenant (s). We are definitely going to talk to a CPA about various tax setups so I'll mention the Self Directed IRA. Thanks!

Re: Crazy Real Estate Market

Alana33
June 22, 2018 01:32PM

Registered: 6 years ago
Posts: 11,872

Presently for sale on STX:
174 Homes, 75 Condos, and 432 parcels of land. One year ago, there were 247 Homes, 86 Condos, and 553 lots.

Above info is from a Realtor friend on STX.

Re: Crazy Real Estate Market

Fishbait
June 22, 2018 02:15PM

Registered: 1 year ago
Posts: 71

We were shown condos without roofs, (being rebuilt) without AC, ones that had tons of vacation rentals and very few parking spaces, etc. We also saw a few jewels. Our criteria was just $350k or less depending on condo fees and insurance amounts and at least 2 BR 2 bath.

BTW if you search the MLS for condos under $350,000 there are 48 listings today.

Re: Crazy Real Estate Market

SkysTheLimit
June 22, 2018 02:18PM

Registered: 11 years ago
Posts: 1,876

Single family homes currently for sale on STX.
000k - $200k, 49 on MLS
200k - 400k, 47
400k - 600k, 16
600k and up, 63

Re: Crazy Real Estate Market

Scubadoo
June 22, 2018 09:35PM

Registered: 4 years ago
Posts: 2,035

Quote
Fishbait
We were shown condos without roofs, (being rebuilt) without AC, ones that had tons of vacation rentals and very few parking spaces, etc. We also saw a few jewels. Our criteria was just $350k or less depending on condo fees and insurance amounts and at least 2 BR 2 bath.

BTW if you search the MLS for condos under $350,000 there are 48 listings today.

There are definitely a lot of condos to be had on STX for not a huge sum of money, as well as those more expensive. Been that way for several years at least.

Re: Crazy Real Estate Market

Scubadoo
June 22, 2018 09:42PM

Registered: 4 years ago
Posts: 2,035

Quote
Alana33
Presently for sale on STX:
75 Condos

And now we have 74, and the two most recent listing changes were price reductions.

Re: Crazy Real Estate Market

lescooper
June 23, 2018 12:14PM

Registered: 3 years ago
Posts: 140

You eliminate central island condos, that renters from the states would be afraid of, and that eliminates a lot. I just got back home from spending 10 days there looking at condos. My price range was up to 250k. Requirements were 2 br and 2 bath in complexes that would appeal to stateside renters. That narrowed it down to about a dozen condos.

Also, most are fixer uppers. That's a particular problem now with contractors at a premium. That narrowed it down even further. Bottom line, limited inventory for good rental investments. Don't let the expert numbers being quoted fool you.

Re: Crazy Real Estate Market

costner1
June 23, 2018 04:54PM

Registered: 8 weeks ago
Posts: 1

Greetings,
this old Marine is having a end of life crisis LOL I am planning on relocating from Washington State,Gig Harbor to be exact. Can you help me with a couple of questions can I use my vA home loan benefit in ST. Croix? is there VA healthcare available? and can I live moderatly well on 7000,00 a month?

Thank You in advance I need one more adventure I truly hope ST. Croix is the answer.

Gentleman at Large. Cheers!!!!!!!!!!

Re: Crazy Real Estate Market

lescooper
June 23, 2018 06:40PM

Registered: 3 years ago
Posts: 140

I'm an ex marine also. VA clinics on all 3 us Virgin Islands. VA hospital on Puerto Rico. Not sure about VA home loans, but likely available. USAA Insurance is the lowest for car insurance. You could live very comfortable on $7 k monthly income.

Re: Crazy Real Estate Market

rosesisland
June 24, 2018 05:30AM

Registered: 6 years ago
Posts: 680

The amount you quoted would afford you a very nice life here on any of the VI's. Yes, you can get VA loan here. It's the United States after all.

Do a PMV, pre-move visit to each island and rent, lease for at least a year or two before buying. Read as much as you can on this forum. Remember, if you buy, houses don't move as quickly here. So, if you find yourself not liking the area you selected a home in, you might be stuck with that house for years.

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