Something good must be going on in the Florida real estate market. My wife, her family, and I grew up in Pennsylvania and when I tell you that three-quarters of her father’s clan have purchased property in Florida, I’m not exaggerating. What that signals to me is there that are deals to be had. Believe me, this family knows a bargain when they see one. They don’t overpay for anything and all of them still have the money gifted to them from when they were baptized.
When I decided to follow suit in buying investment property in Florida, I knew exactly whose brains to pick. Even my wife’s 95-year-old grandmother—who carefully removes and irons Christmas wrapping paper for the following year’s use—offered some advice. She spends summers up North and jets down to the Miami area when the leaves fall off the trees here in the northwest. “Nana” told me she’s paid for her condo a dozen times over with all the rent she’d received from tenants who leased the place when she wasn’t around. Who am I to argue with nine-plus decades of experience?
Buying Investment Property in Florida
I have a built-in network of advisers. And it’s not just family. I also have many friends and colleagues who live and invest in Florida. You could probably drop me anywhere in the state and I’d find three squares a day along with a place to crash, all before the sun went down. But even those on-the-ground resources won’t tell you everything you need to know. Let me share what I’ve learned by diving into the Florida real estate investing market and what you should be looking out for.
- Location. The Sunshine State occupies a lot of ground. While the market seems solid right now, I couldn’t just randomly buy homes in cities where my return on investment wouldn’t be optimized. I targeted a few different areas. Ft. Lauderdale home values are reasonable at around $300,000 and median rents look appealing as well. Tampa had a slew of foreclosures on the market and coupled with the growing strength in both cities’ job markets, these two areas appeared to be good places to get started. I had to act fast, though. Investors from all over the country had the same idea that I did.
- Taxes. Before I buy in any locale, I summon my spreadsheets to be certain that my cap rates will fare well. I look for any variables that might negatively impact my return on investment (ROI). Naturally, I built a cushion for unexpected expenses but I analyzed financial factors such as maintenance and taxes. One of the huge advantages of investing in Florida real estate involves taxation. Compared to rates in my home state and the rest of the nation, the Florida revenue department’s share of my pie was smaller than slices elsewhere.
- Insurance. The Atlantic Coast perennially gets besieged by hurricanes. Each year it seems that the storm surge threatens and often inflicts considerable damage on Florida properties. Hurricanes have caused more than $170 billion in damage since 2000. As a result, insurance rates in Florida have risen considerably. I needed to factor in the expense of real estate investor property insurance before I even thought about signing a contract for purchase.
- Property Management. I have a friend who purchased several rentals in South Florida before he got called to spend two years in Singapore for work. Obviously, he wasn’t flying back and forth from Asia to tend to his investment properties. Since I had planned to split my time between the Northeast and the Southeast, he suggested that I find a good property manager right off the bat. While he was away, the first firm he hired didn’t work out so well. Local ordinance changes mandated some upgrades. He blew through significant dollars before he found reliable partners to stay abreast of the law and hire reputable contractors to meet new building codes.
- Good Tenants. In states such as Florida, where many people come and go, the need to find quality tenants became paramount. I realized the market was quite different from my backyard, where the population actually shrank and I often rented to people who lived there for many years. Background and credit checks in addition to solid references simply couldn’t be omitted. I couldn’t take a chance that apathetic renters would damage my property and leave behind rooms full of junk, the removal of which would not be covered by my investment property insurance policy.
Buying Florida Investment Properties as One Big Happy Family
My wife’s brood was a great help when I started buying investment property in Florida. Despite all their support and frugal tips, none of them were industry professionals though. With my snowbird style of ownership, I really needed a mentor who could expertly guide me through the process. That’s why I turned to HomeVestors®. As a newly minted independently owned and operated HomeVestors® franchisee, the nationally-known and trusted “We Buy Ugly Houses®” advertising campaign helped me dig up leads on single-family flips and a number of income properties. My fellow HomeVestors® franchisees and Development Agent took great care and concern for my success—just like family.
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