annual gulf access home rental questions (Cape Coral, Fort Myers: renters, insurance, mortgage)

[AZtoFL2021]

I'm contemplating buying a home now in Cape Coral and then retiring here in about 6 years. I fear that not buying now with the way prices are increasing will put me out of the market due to pricing in the future. For those in the know, let's say I buy a home less than 20 years old with gulf access not too far away (30 mins or less) with pool and paid $400k. I'm pretty sure I couldn't rent that home for the amount of monthly mortgage payment plus taxes and insurance. Am I right about that? Looks like maybe I could get $2200/month if the house is modern, 3 br/ 2bath. I'd also have to pay a property manager because I'm out of state. Are there annual renters out there in this area readily available to pay $2200 or so per month?
Does this plan of buying now, renting for 6 years, then moving here sound like a good plan?
Any input is greatly appreciated.
Thanks all.

[PalmGuy]

That can be a wise investment if you get the right property. There is a flow of people moving in the area continually. And I believe there would be equity over a 6 year period not only from your mortgage pmts but from the 10-12% bump in prices were seeing now every year. Who knows how long that will last. I bet quite a while. Just do your homework, ask alot of questions and put a pencil to it...

[dualie]

location, location, location! Cape Coral is a very large area, so do a lot of homework before buying anything. There are canals, and then there are canals.... a 30 minute trip to open water is not a great selling point. A 10 min, trip... much better.

If you can get a house on a good canal, with quick access, in a good neighborhood you might do better doing seasonal rentals then yearly.

[jnpittman9]

Your plan is very feasible as the rental amount has also increased recently in Cape Coral. The closer to the river the better as in boat ride is concerned. There will be a lot of home that promote gulf access but will take a long time to get out to the river. Demand for seasonal rentals is strong as many book in a year in advance as more and more snow bird look for winter rentals here. With your budget you should find a nice home here in Cape Coral.

[Restrain]

If you look at seasonal rentals, 6 months rental rates go a long way to paying for the full years's note.

[BugManTPC]

here is a rundown on what to be concerned about:

Property manager is going to cost 10%

If you buy in a gated community, what are the rules and regs. for renters. Don't think you can do what you want in a Deed Restricted Community.

A Seasonal rental in Cape Coral is going to be a niche, Europeans love CC, there are quite a few German families who will take it off your hands for 4 months.

An annual rental for a VIP is feasible, the $2500 to $2700 per month, per year range for a fully furnished and turnkey. Would be a very select group of people. It is doable, you have to market it right.

On a seasonal basis: waterfront, turnkey should be $3500 to 4K per month plus utilities with a comparable deposit. this is an A+ property (great view, security, fully turnkey, top appliances, TV's, internet). If this was Fort Myers Beach or a high end Golf Course community the seasonal rental would be $4500 to $7K per month.

visit VRBO.com and compare...

10% bed tax on rentals less than 6mo (State of Florida), paid by renter, but the manager will try to lump that in their commissions (be careful to only pay commish on net rental, not gross expense) No commish on tax, fees, deposit, cleaning or utilities.

Always get 1st month utilities upfront (Average cost plus 20%)

factor in your budget that the property taxes are going to get substantially higher year over year until you move and homestead. Annual Property taxes punish non resident homeowners. (Keep taxes and insurance in your escrow) You can refi before you initiate your retirement plan.

insurance cost for waterfront sux, factor this into your long term plan.

keep an inventory of the home, written, video and picture. Be organized, don't leave money on the table. Its sad to say but people will rob you blind.

Work with a cleaning company who is bonded and insured.

factor in pool service (mo), pest control (house and lawn) (mo) lawn maintenance (mo), M&R (annually), pressure cleaning (Bi-Annual), carpet and tile cleaning (after each tenant). Its a hotel basically, keep it clean.

Each rental term should end with a cleaning charge - Min $500 or (true cost x 1.25%) you have to make money on everything .

I hope this helps...

[AZtoFL2021]

Thank you all for the input.
Everyone I spoke to is in agreement that buying now and renting is a solid investment.
I have some serious thinking to do now to see if it is truly possible.
It's a huge purchase and even more challenging as a first timer from out of state.
We'll see.