The purpose of this blog is to show how unconventional investments can add value to your portfolio. The condo went to settlement a week ago and closed the chapter on this investment. Final sales price was $171,000 on a small beach condo purchased for $83,000 six years ago. That was a 106% gross return on investment and an 88% return net of commissions and transaction selling costs. By all standards, this was a great success. The condo paid for itself for all 6 years through rental fees and never required any additional operating cash from my personal funds. A couple of observations from the past several weeks:
A. When selling an out of state property, a hands on real estate sales person makes a huge difference. Sheila Geer with the St Pete office of Coldwell Banker was fantastic in handling all aspects of the transaction, including meeting repair contractors and even the small tasks such as having keys made. That level of assistance and expertise is very much appreciated.
B. The appraisal can throw a monkey wrench into the best of deals. In our case, it come in lower than our contract price but the buyer did not have a contingency in the contract for that circumstance. Even though they wanted a new price, the original was not changed. My opinion is that the appraised price had not caught up to the fast sky rocketing prices the area was beginning to experience and the buyers were still getting a good deal.
C. Be aware of the tax consequences that a sale can incur and plan accordingly so surprises in April do not take you off guard. The right tax planning can make the difference so contact your tax professional for options.
As this investment gets placed in the plus column, it is time to look for a new replacement so let the fun begin…
Thanks for reading…