If you are thinking about purchasing a home on the Outer Banks, then you are also probably thinking about timing. What season is best for your OBX purchase? The two busiest seasons for an Outer Banks purchase are Spring and Fall. That’s partially due to the convenience of purchasing. In the summer it can be difficult to get in most vacation rentals. Access to those homes is just between vacation renters, (changeover days). Changeover days are filled with traffic. Also, the window of time to view is limited because the next tenant checks in before the dinner hour. In the winter, there are fewer buyers mainly because of the weather. Snowstorms and other bad weather keep people from traveling to the beach.
This post shares why the spring and fall are the best seasons for an OBX purchase.
why buying in the fall is better
Time for Updates
Buying in the fall allows you time to update the property. Many homes here need some updating to be ready for the upcoming rental season. Purchasing in the fall gives you plenty of time to personalize and make improvements to property. Sometimes just a few of these updates will dramatically improve the rental income in the first year. Key improvements frequently make the difference between a successful season and a poor rental year.
Rental income is really not that far away. State law allows the property management firm to begin disbursing rental proceeds at the beginning of the calendar year. Fifty percent of these proceeds can be given to the owner prior to the tenant arriving and the remaining rental proceeds are disbursed after the tenant leaves. With the trend of summer weeks booking earlier and earlier, you are likely to receive a sizable amount of money as early as February. Couple this with the fact that a mortgage payment is usually not due until the second month you own the property; carrying the property through the winter should not be that difficult.
tax benifits:
Purchasing in this calendar year may also have tax benefits. Most closing costs are tax deductible. You can take those deductions when you file this year’s taxes. Waiting for the new year postpones those tax deductions for almost another year. Your tax advisor can explain how a closing this year could benefit you. The fall is one of the best seasons for an OBX purchase. Not only does it make sense financially, but also, you’ll get a chance to use it before the summer rentals arrive.
Why buying in the spring is better
Instant Income
Purchases of vacation rental homes in the spring often times results in instant income. As mentioned above, some of the rental income can be disbursed to owners prior to the tenant arriving. North Carolina’s standard residential offer to purchase prorates the rental income to the day of closing. In other words, the seller will receive the rental income for the nights before closing. The buyer receives the rental income for the nights after closing. As mentioned above, state law allows local property management companies to disburse up to 50% of the rental income prior to the tenant arriving. It’s common for at least half of the summer to be booked by the beginning of May. As a result, a closing in May could result in the buyer receiving a quarter of the summer rental income at closing.
Enjoyment
You may also get to use the home some in good beach weather. Purchasing a home in the spring often gives a buyer the opportunity to use it before the rental season. Even if the ocean is not warm yet, the months of April and May have many great beach days. After a large purchase and all the effort required to make that purchase, it’s no fun if you can’t enjoy the fruits of your labor. Another part of the state law regarding vacation rentals is that confirmed vacation rentals must be honored for 180 days after closing. In other words, you can’t kick renters out for the July 4th week if you want to use it that week. It’s likely that a home purchased early in the spring will have a few summer weeks available for you to reserve for yourself.
One thing to keep in mind is that the right house may go on the market at any time during the year. Purchasing the right house is certainly more important than which season it is purchased in. So when is the best season for an OBX purchase? It’s when you find the right house and are ready! You can count on Scott Team Realty to be ready to help you when you are ready regardless of the season.
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