Investing in the Short Term Rental market (Tampa, Orlando: sales, rentals)

[JobsaGoodun]

Guys,

We have recently sold our UK property at what we hope is the top of the market in the UK and are moving in rented here in the UK due to the current uncertainties in the UK market. We are looking at putting the capital we have somewhere else and the US market looked an enticing investment opportunity given the current strength of Sterling against the Dollar and also due to the falls in the US market of late.

We are looking at areas where we can purchase a short term rental so that we can use the property ourselves for vacations but also rent it out when we are not using it thereby helping to cover our costs. We have approximately $100k down with the remainder via a mortgage and are looking to spend up to, say $250k but could stretch this for the right place. Is now a good time to buy or might prices fall even further?

I am conscious that there may be many people doing the same and so would like some advice as to where the best areas are to buy, specifically I know that Kissimmee and Davenport are close, but what areas within these sub-divisions are best?

Orlando is not the only area, we could look at Tampa, Sarasota, Cape Coral (very cheap just now) or Naples etc etc. We just want to head to the best place. Orlando has a great market but also a very high number of short term rentals available so maybe here isn't best???? Any advice would be much apprecated. Thanks guys!

[nickindependence]

I am a realtor here in the Kissimm/Davenport area but i am actually from the UK, Canterbury originally and moved here some years ago and all i can say is now is a great time to buy. The reason i say this is because the market is in a slump, there are lots of properties to choose from and you dont have a property you need to sell first so you are in a great position to take full advantage of the market and of the current slashes in interest rates. Im sure you can imagine i do alot of work with British investors and i also work with a fantastic mortgage team who specialise and tailor mortgages for foreign investors. If you intend to rent the property out you only need to put down approx 30% down and there are some great areas to buy. Of course Davenport and Kissimmee are prime for the short term rental market but make sure where ever you buy is zoned short termed rental otherwise you cant rent it out for that short a time.

I can recommend a number of new build homes also in the area other than resale properties which have great deals on them from the builder.

Moderator cut: comment

Nick

[st.vera]

HI,

You may need to compete with many other investors who want to rent out their condos or houses. Also make sure before you buy that the place will allow short term renters. This has to be a very long term investment for you. When you sell or buy you will lose money (realtor's fee, loan fees, closing costs just to mention a few). Try to calculate whether the mortgage you will pay for your investment will be covered by the rent you hope to receive - property tex, maintanence fee - are you going to be able to manage your property or you have to hire someone? These are only a few things to think about before you buy... The prices are really low, perhaps a good time to buy. Search the internet for other advices regarding investment properties. I wish you good luck!

[nickindependence]

I just wanted to add some comments reagarding the previous comment. It is true the market is very competetive, but tourists coming to the area is at an all time high especially die to the weak dollar, so whilst long term rental properties are suffering a little bit, short term are not really. Also, as with all societies there is an element of i know better. First time buyers see the market is in a slump and areconvinced it is going to be along time before it recovers. Purely from the volume of sales i am dealing in i dont believe this and i think now that within 6 months the market will rebound. I deal with alot of these people and they are all renting and while they are waiting the market will rebound and they will have missed the rock bottom prices.
Now is a great time, especially if your marketing the property in the UK aswell to rent. There are a number of companies who do property management which are English but have people here doing it. But one myth i want to dispell for you and others out there reading this thread, is dont believe the rent you will recieve will pay your mortgage, taxes and home owners association dues. IT WONT. It is nieve to think it will. Where you will make money is buy buying the property at the low prices we have now, renting it out for perhaps 2 yrs and haveing perhaps 75% of your expenses paid for, and then selling it when the market is at a prime. Like was mentioned previously it is a long term investment, not a short term cut and run investment. But dont let the thought of when you sell having to pay realtors fees, closing costs and taxes concern you. Many people dont consider that when you buy you pay a small part of closing costs, negligable in fact on resale properties and you dont pay realtors fees when you buy. So you only pay once in the transaction process and the realtors charges vary, some may charge 5% i charge 6%, 3% to my brokerage and 3% to the buyers brokerage, but it depends on whether you want to sell the property. you can sell yourself but you dont have access to the large advertising and tools we have to sell your property. And yes as a foreign investor you have to pay tax and this is withheld at closing when you sell, although there are ways around this if you intend to buy another property here.

Good luck