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Old 11-11-2019, 05:01 PM
 
3 posts, read 2,762 times
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Hello, we are in mid 40s and are thinking about buying a rental property in Florida but we are not sure what areas to look at. We would greatly appreciate any feedback. This will be our first rental property, but I managed one remotely several years ago as a part of my job at the time. I've listed a few wishes/concerns below:

1. The main one is that I am afraid that a recession is coming. I am not familiar with the local market and we are not working with a realtor yet, but I have looked at multiple sold listings and have seen really high appreciation on some properties (30-50% in the last 4-5 years with no major remodeling). Would you say it's a valid concern? We would invest our hard earned money and are afraid to buy at the peak and lose half of the value the next year. I understand that no one can tell for sure, but we are trying to get a better understanding on the market there.
2. We would like to spend up to $230K and are looking for a relatively small place. 2 bed 2 bath would be ideal.
3. Our main goal is to purchase a property and rent it out monthly or weekly (will have to make sure there are no deed restrictions). We are not looking for short-term gains. Instead, we would like to rent it out and use it a few times a year ourselves when it's not occupied. We understand that it's important to have a trusted person locally who can get to the unit if something breaks, to check on the cleaning crew, etc. We are getting referrals from a Venice resident who had rental properties before. I would set up an account on VRBO (or any other website), reply to emails, manage bookings and do other things that can be done remotely.
4. Should we concentrate on smaller condos closer to the water (1b1b or 2b1b) or larger houses that are within 5-10 drive from the beach?
5. My understanding is that Venice is a retirement community. What retirees are looking for in a rental property in Venice? Would it be easier to rent out a house or a condo? If a house, does it have to have a private pool, a community pool or it's not really important? What other amenities other than the beach are important to retirees?
6. We have purchased tickets and will be going to Venice in February to explore the area. We've been many times to Miami, Orlando and once to Naples, but have never been to Venice before. What other relatively inexpensive areas we can look at while we will be in Florida in 3 months? We are not planning to buy while we are there, but just want to get familiar with the area. Our main area of interest would be a community on the water within 30-90 min drive from the major airports: TPA and RSW.
7. In general, what is the best time of the year to buy a property in Florida and in Venice specifically? I've read online and spoke with someone who lives in Venice and was told that summer (July-September) is generally a better time to buy. Would you agree or disagree?
8. Would greatly appreciate any other thoughts or observations if I haven't mentioned them above.

My apologies for a lengthy post... Thank you very much in advance!

Last edited by tofl2020; 11-11-2019 at 05:19 PM..
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Old 11-11-2019, 06:11 PM
 
Location: Venice, FL
9,608 posts, read 2,703,447 times
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I'm not a realtor, and I think in your situation, you need a seasoned local realtor who specializes in Venice.

I have had rental property's in the past, but not in Venice, or not even in Florida, but I've rented seasonal vacation property before, and long term too. I know what's involved to own rental property, just not here.

I've rented myself in this general area (6 month lease w/ right to extend monthly therafter upto 1 year...which turned into 13 months), and now own a newly built home in the Venice mailing address. We rented while we conducted our home search, and during the construction period. There's a lot of demand for this situational type rental units that have flexible time horizon terms. Lot's of people building new homes want to get into, or near, their new home neighborhoods several months in advance, and these are high quality low risk tenants.

Offer furnished or unfurnished as this flexibility will help you lease your place. I wanted unfurnished because I wanted to move my things down asap, and be done with it. Then, I moved my things a 2nd time into our new home, but 75% of the stuff in our old home up North was sold or donated, so we brought just enough to survive on until we moved into our new home. Most of those things are still in our new home until we replace them. Others will want furnished. Figure out how to offer both.

We tried to rent a place as you describe nearer where our new home was being built in "New Venice", but couldn't find anything at that time (2 years ago), so we just stayed in our rental in Palmer Ranch (30 minutes North of Venice) instead.

Venice is not really a rent by the week destination like Siesta Key would be, and you won't find anything on Siesta Key near your price range. I think you should look for rent by the month, with a 4 month minimim from Dec-March. Most HOA's around here have a 6 month minimum, so you are going to have to avoid those. The experienced local realtors can save you a ton of time by knowing all the HOA rules and which HOA communities to cross off your list.

I'd avoid a multi unit condo, but would consider a Villa where 2 Villa's are under a single roof. I strongly suggest a garage, preferably a 2-car garage. I see this as being more important than the pool at your price point. A pool is going to drive up carrying costs, and at your price point, people are not expecting a pool, but a pool community would be nice, but again that drives up the HOA fees.

If you are not looking for short term gains, then I'd stop worrying about any recessions. People that retire to this area are not going to stay up North when their time comes due to a recession. When its their time, they come no matter what the economy is doing (barring something more dramatic than a recession). If you plan to buy, lease, and hold for 5+years, don't let any potential recession scare, or delay, your plans. The market is high right now, but I dont see it as overcooked, but that is just my unprofessional opinion. If the market dips, you should have time for it to bounce back before you a ready to sell.

You already missed this years rental season, so I'd be thinking next season and have the place on the rental/lease market by 8-1-20. This means you could have time to buy a fixer upper on the cheap, refurb it, and have it ready for the next seasonal cycle. People are shopping for rentals several months in advance, so 8-1 or sooner makes sense.

If I were going to do what you are attempting in this area (Venice mailing address), I'd target the new home buyer's who wants to rent while their home's being built. You'll get at least a 6 month lease, and a high quality tenant. It will be less time consuming for you, and less wear and tear on your place. Avoid carpet or hard wood floors because many of these potential tennants have pets. You want tile or vinyl. Market your place to the new home realtors in the sales offices in the new home communities out near the West Villages, and the communities adjacent. They're 20 minutes to the beach. Avoid all golf communities.

Those are my initial thoughts. There are 2 Realtors who are frequent posters on this forum. I highly respect both of them, 1 is a lady and the other is a man. I'd interview both of them if I were you. I dont know either one of them, but have been reading their words for 2 years, so I know they are knowlegeable.

Last edited by beach43ofus; 11-11-2019 at 06:24 PM..
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Old 11-11-2019, 08:12 PM
 
Location: Sarasota/ Bradenton - University Pkwy area
3,580 posts, read 5,140,226 times
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Some freebie insight from 20 years experience in the Sarasota - Bradenton - Venice real estate markets, including assisting a number of investors buy rental properties:

Should we concentrate on smaller condos closer to the water (1b1b or 2b1b) or larger houses that are within 5-10 drive from the beach?

I would caution you to very carefully check out condo rules regarding rentals if looking at those as many have restrictions on how many times per year you can rent your unit out, length of rental leases and some even have rules that new owners cannot lease their units for 1 or 2 years after purchase (because they don't want rental investors). Almost all will place no pet restrictions on tenants. And almost all will require your tenants to be screened and go thru an application process.

Another cautionary item is budgets and more importantly reserves. You want to know that the condo community is fully funding reserve accounts for big ticket items such as replacement of roofs. Otherwise you could find yourself being hit with multiple special assessments as repairs are needed.


As to single family homes, the closer you are to a beach, the more demand for properties and generally the higher the price/sq ft. You may do better to find something that is perhaps a little further away from the beaches but closer to other activities and shopping if you decide to go that direction.

On single family homes in this price point, you will probably be looking at older homes built in the 1950's - 1980's. Age of the roofs is very important as many insurance companies here aren't inclined to issue new insurance policies for 15+ year old roofs.

You'll also want to be careful of "extra" square footage that does not match up with the county tax records. A home listed as a 3 bedroom 2 bath 1400 sq ft that shows up on tax records as a 2 bedroom, 1 bath of 1200 sq ft most likely had remodeling down without PERMITS. Permits have become more of an issue in the past few years because insurance companies don't want to insure unpermitted work. Plus, if the building department catches up with you after the purchase about a garage converted to living space by a previous owner, YOU will be held liable for (a) bringing the changes up to current code & getting them properly permitted or (b) having to take out the unpermitted modifications and changing the space back to a garage again. A lot of that kind of thing went on up until the 1990's when the building department started putting on permits in an on line data base. Now anyone can pull up a property by the address and see what work has been permitted from that time onward.

You would be smart to stick to non deed restricted areas as many HOAs do have rules about rentals on how many per year and length of the rental allowed. Many have a minimum 6 months lease required.



It helps to put together a spreadsheet for comparing properties, one in which you can factor in things such as potential annual income (minus vacancy rate), expenses such as insurance, HOA/condo fees, property taxes, maintenance/repairs, mortgage (if applicable), appreciation/depreciation, etc so that you can calculate your net operating income and return on your investment. There are sample spreadsheets (sometimes called a property investment calculator) out on the Internet that you can use as guidelines in setting up your own. Doing a spreadsheet on each property you are considering will help you determine if that property will give you enough of a spread between income and expenses to meet your goals. Many investors in rental real estate target a return on investment of 5% - 7%, but I have come across investors that target a higher yield such as 10% or more.



Here's a tip about property taxes. If you are purchasing a property that had previously been owner occupied and the owners had the homestead exemption on the property, expect the property taxes to go up (sometimes substantially) on the following year's tax bill. A sale always triggers a new assessment of the property as of the beginning of the new year.



It generally makes more sense to buy properties in good condition that need only minor repairs or cosmetics to make them rent ready. Always include a home inspection contingency in your purchase agreement and hire a good home inspector with a proven track record. Remember, you are not buying just the house, you are buying it's roof, AC/heat system, electrical and plumbing. Know what you are buying BEFORE you close on the purchase.


Last but not least, you may want to look further afield than just Venice. There are some buying opportunities in Sarasota and west Bradenton should you decide to go condo vs single family homes. There are also a number of older, non deed restricted neighborhoods located in Sarasota that would have homes within your price point as well.
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Old 11-11-2019, 08:42 PM
 
Location: Venice, FL
9,608 posts, read 2,703,447 times
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^^^ are your sure you still want to be a real estate investor? I soiled my pants after reading the post before this one.
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Old 11-12-2019, 04:13 PM
 
Location: Sarasota/ Bradenton - University Pkwy area
3,580 posts, read 5,140,226 times
Reputation: 3411
Quote:
Originally Posted by beach43ofus View Post
^^^ are your sure you still want to be a real estate investor? I soiled my pants after reading the post before this one.

Wasn't trying to scare anyone........just bringing up things that a newbie investor buyer to our area would need to be aware of before they sign any contracts. I know a number of investors that actually do quite well buying rental properties in our area. But the trick is knowing the "what ifs" and "red flags" that can come up when purchasing so that you don't get broadsided later on.
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Old 11-12-2019, 04:59 PM
 
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WOW! Thank you very much for the detailed responses!!! We will definitely be working with an experienced realtor when the time comes. We are now just trying to get an idea about the market, what's important in this specific market, what to be aware of, etc. We know that there are many possible red flags in general, that's why we are trying to do some research before we even fly to FL in 3 months and meet with a realtor (a referral) to talk about all the details and their recommendations, warnings, etc. We will certainly rely on our realtor to help us as he/she is familiar with the market, but I would also like to be aware of risks and benefits. There are many different opinions and they are not always the same.

Sunshine Rules, what areas of Sarasota would you recommend looking at? Somewhere with no deed restrictions, safe neighborhood and close to amenities and relatively close to the beach. The "extra" square footage is definitely something to keep in mind and I wasn't aware of. I hope our realtor will do the due diligence, but again, I want to be aware of things myself too.

Beach43ofus, I didn't even think about potential renters who wait for their house to be built. Thank you! We will have to avoid HOAs with strict rental restrictions (like 6months minimum) because our primary goal will be to rent it out. In general, what's more desirable for renters houses or condos? We are leaning towards seriously considering a single family home or two villas with a shared roof, as you suggested, but want to be open to anything (probably to rule out condos later anyway). We also would prefer to have public water and sewer, so we don't have to worry about water quality and maintenance especially being in a different state.

Thank you very much again to both of you! Any other suggestions or warning will be much appreciated!
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Old 11-13-2019, 07:19 AM
 
Location: Venice, FL
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I can't speak to whether most renters want condo's, or homes. I rented a maintenence-free attached villa in a gated community that had a 2 car garage, and a strict HOA. I had to agree to a 6 month lease, which I extended by 1 day to 6 months and 1 day so I could establish Florida residency. The HOA required an FBI background check, a credit check, and even a DMV driving check! If you do buy in a HOA community, get all the renting rules in writing from the HOA before making an offer. No renters want to mow lawn.

The neighbors never spoke to me, so I assumed they abhorred the idea of living next to a renter. I seldom saw them, and I ignored the cold shoulder. I wasn't there to make friends, but be aware that you and your tennants, may not be welcomed.

During my time there, the neighbors had new windows installed, so 3 days of constant drilling. I worked from home, which was Starbucks during those 3 days! Attached villa's do have some downside to them. They had no kids and a quiet Dog, so aside from occasional construction related noises, it was fine.

I also had to let various maintence guys in. When a hurricane came, I had to let a guy into the garage to access the hurricane shutters, and then again when they were taken down. HVAC guys came monthly to put vinegar down the condensation drain pipe so it wouldn't clog up. I offered to do it, but the owner declined. You'll need to deal with that here in Florida. The HVAC system was in the attic, which made it tough to access, so avoid that at all costs. Pest control came quarterly, and I hated having poisen sprayed inside, but I had no choice. I still got ghost ants.

The unit I rented was for sale, so I had to agree to let it be shown upto 2x/wk, and they were supposed to give me 1 days advance notice, which seldom happened. Sometimes no notice at all, so I took the lockbox from the front lanai into the unit so they couldn't just come right in. The MLS listing showed "occupied, requires 1 day advance notice", but most buyer agent realtors ignored that. What if you need, or want to, sell the unit while it's occupied? Mine couldnt be sold during the 1st 6 month, & 1 day lease, but after that, I went month-to-month, and it could be sold and they'd have to give me 30-days advance written notice to vacate. I wound up staying 13 months, and they sold it the month after I left. Win-win!

I got a price break on the lease for having to deal with all of this, but never again would I agree to the for-sale showing's stuff. Many of the Buyers Agents were unprofessional, ignored rules, left lights on, sliders open, let people use the restrooms, changed the thermostat settings, ect.. My opinion of Realtors got destroyed by it. It wasn't isolated circumstances either. I solved some of it by bringing the lockbox inside. I also started reporting it all to the listing agent who dreaded my emails and phone calls. She became very ashamed of her fellow Agents. When it persisted, I email the owner with what was happening, but it never stopped.

When I tried to hook up internet service, I was declined because a former tennant had an outstanding balance, and unreturned equipment! Over $1,000 balance due! I told the owners, and they had to pay it. I had no issues with the other utilities. I suggest keeping all that in your name, and adding it to the cost of the monthly lease to avoid this exposure. You cant get a large enough security deposit to cover you.

You should put into your leases language that allows access for maintenence, amount of notification, and how you will notify your tennants. I'd also put in the leases your ability to inspect so you'll know the unit is not being trashed. You should know the eviction process/laws in case you ever run into that.

The unit I rented had a land line w/ an answering machine. It rang constantly with solicitations and collection calls from the prior owners or tennants, so I just unplugged it.

I received mail that belonged to prior owners, current owners, and former tennants too. I got to know the owner, even though I leased it through an Agent, so when he got mail, I'd email him to advise, and leave it out on the covered front lanai for him to come by and collect. All the rest, I'd write "person no longer lives here" on the letter, raise the red flag on the post box, and it would be gone the next day. Even some certified mail arrived (probably collection notices), and 1099's, W-9's, ect.. came. How will you handle all of this as a landlord? Mine was not communicating with the post office at all, so I wound up having to deal with a lot of stuff I shouldn't have had to.

One day, I noticed my mail stopped coming. I went to the post office, and they had it all there in a large plastic tub. They said I filled out a form to have my mail held. They showed me the form, and it was submitted by a former owner! It was tough to fix that and get my mail flowing to the villa again.

I needed unfurnished, but I think most prefer furnished.

My rental had County water, but it was undrinkable, so I bought bottled, and then a Brita. In our new home, we have County water that's bad too, so we just installed a filtration system. Having County water means squat here. Most of it is undrinkable in this forum area.

I hope this helps you to anticipate some of the landlord issues that might arise. I've been and landlord 3 times, a renter 3 times, and an HOA President, so I could write a book on this stuff.
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Old 11-13-2019, 02:15 PM
 
Location: Sarasota/ Bradenton - University Pkwy area
3,580 posts, read 5,140,226 times
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If you want to stick closer to south Sarasota, some suggestions would be:

Tropical Shores -- off of Vamo Rd & US41 (34231)
Sun Haven -- off of Clark Rd (34231)
Gulf Gate -- very popular neighborhood, great group of local restaurants located just west of there by the mall (34231)
Phillippi Gardens -- between US41 & Swift Rds off of Constitution Blvd (34231)


A little further north:

South Gate Ridge -- (34233) off of Beneva south of Bee Ridge

Brentwood / Ridgewood / Sarasota Springs / Colonial Gables (34232) -- large area of neighborhoods from just west of McIntosh to just west of Doctors Hospital, north off of Bee Ridge Rd.



For condos, I would suggest looking into 2 places:

The Meadows (34235) -- it's a golf & country club master community in north Sarasota but membership is optional. Many of the condos have golf course views, great walking trails, lots of winter rentals there already. Rental restrictions vary somewhat, depending on the community.

Palm Aire (34243) -- another golf & country club master community with optional membership. Located just north of University Pkwy in south Manatee county, mailing addresses say Sarasota. Also popular for winter rentals.
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Old 11-14-2019, 05:32 PM
 
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Beach43ofus, that is a very unpleasant experience that you had... Our initial thought was to rent it out through VRBO or Airbnb and most renters in those cases probably stay short-term. We would not expect a renter to mow the lawn and will have to hire someone to do it. I didn't even think about a possible eviction with renting short-term, but a good point to talk with a realtor about. Thank you! Also, with most renters being there relatively short-term, they hopefully will not change their mailing address, but if something is delivered to an incorrect address (where an individual does not reside or no longer rents), am I responsible for it? For example, when an incorrect letter is delivered to us (which is relatively rare), I do my best to inform the mailman by putting it back in the mailbox like you did with a note. However, my understanding is that I don't "have to" do it. I have no control over what's incorrectly delivered to our mailbox. With renters, even if someone rents lets say for 3 months and some mail gets delivered to a rental house during that time, my understanding is that it will be the tenant's responsibility to notify senders that he/she is no longer staying at the house.

A good idea about putting a language in a lease about check ups and maintenance, however, I am not sure if a lease is singed when someone rents through vrbo. We recently rented a few places and didn't sigh any leases. Both were short-term (7 and 12 days), but if any repairs were needed, we would definitely let a repair man in. If some major repairs were planned during our stay and no one told us, that would be a problem, but an unexpected repair would not be a concern for us.

Sunhine Rules, thank you for the suggestions! I will do some research this weekend! Do you or Beach43ofus know anything about real estate/market conditions on Marco Island and how it compares to Venice? The only option there in our price range would be a smaller condo, but that comes with HOAs and probably shorter term rentals (days to a week or two). Are monthly rentals common there? By monthly I mean people from the North coming there for a few months to escape the cold. Another thing to consider is to make sure (or at least to do our best to make sure it happens) that a house/condo can be rented for more than just 3-4 months per year.

Thank you both again for such detailed responses! I really appreciate your help! So many things to consider....
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Old 11-14-2019, 06:16 PM
 
Location: Mtns of Waynesville,NC & Nokomis, FL
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RE: "Our initial thought was to rent it out through VRBO or Airbnb and most renters in those cases probably stay short-term."

As a few posters have mentioned previously in this thread, esp the cogent commentary by Sunshine Rules, many HOA/COA communities will have rigorous rules on 'short term rentals'...

Several communities that I am familiar with have at least a 3 month rental, (a few may allow one month), but many prohibit any rental nearing a 'short term rental'.

All OK, as most HOA/COA boards have come to realize that weekend/week long, even month long in some cases is not in a community's best interest, fwiw.
GL, mD
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