Rental property investing in South Florida, when playing the long game... will almost always be a HOME RUN! Why? South Florida is one of the most transient areas on the planet! This means... a constant flow of renters. Our work force is strong, which means there are plenty of potential qualified tenants at all times of the year. Often people move here just for a short period of time, with no interest in buying. These factors, coupled with higher than average rental rates means landlords, when using smart strategy, will win in the rental property investing game.
Current challenges? If you already own rental property, you're ahead! The trick is to manage it as effectively as possible while always finding the best ways to minimize your risks (risks like bad tenants and delayed maintenance COST MONEY!). If you're an investor LOOKING TO BUY rental property, the trick is to be patient and strategic. Finding cash positive rental properties is a challenge, and not always possible. Sometimes a net-neutral property will still be a great investment. Due diligence is a must, and patience is essential.
Finding good solid investments can be time-consuming. Often the best rental properties are pocket listings (not found on the open market/MLS). Investors should hire an experienced real estate professional to work with for the long game, in order to find out the best properties and help you manage your portfolio (whether one property or many). GOOD property management will also help keep your costs way down AND help to minimize the costliest risk factors in most tenancies.
Besides the initial investment of buying a rental property (or converting an already owned property into a rental)... the biggest decision to make is HOW to make the property work for you.
Property management fees can be tax deductions. So why manage rental property yourself? EXPERIENCED property managers know how to help you avoid pitfalls, effectively and swiftly address issues BEFORE they become costly, provide your monthly/annual bookkeeping records for taxes, and so much more! We've been through all types of landlord/tenant situations, and know what works and what doesn't. We're problem solvers, and good at making sure your investment is working for you.
We can give you guidance on the home improvements that pay off the most for rentals, help with strategic pricing, tenant screening and handling the inevitable pitfalls like security deposit claims, late fees and lease term defaults.
For Buyers and Sellers: there are tons of properties on the market available to buy, and both sellers and buyers should be open to negotiating the prices a bit. Interest rates are still historically low, making it an excellent time to get into a mortgage and/or buy. Another GREAT factor for SELLERS to SELL NOW, besides having a ton of qualified buyers in the market looking to buy... is that Owners and Appraisers are now AGREEING on the value of a property! Yes, that's right... one of the biggest issues we've had since the collapse in 2008 is that owners and appraisers didn't agree on the value of the home. Which meant many sales contracts BLOWN UP, owners not willing to sell at lesser amounts, and buyers getting very frustrated. No more! Read more about this FANTASTIC new report on how Owners and Appraisers are agreeing on home values here:
Tenants are having the most difficulty in the 2018 South Florida market. Finding affordable rentals in most areas within South Florida is very difficult. Renewals are now commonly jumping $100 a month or more to remain for another year. Oftentimes there are multiple offers on the same rental property, so anyone with less than stellar credit scores or less than 3:1 income/rent ratio need a longer time frame to secure a new rental property as well as lots of patience. Because South Florida is very transient (lots of people move in and out, more in... all the time) rental rates remain well above the national average and continue to rise.
If you are new to rental property investing, need to become a landlord because you aren't able to sell right now, or you tried flipping and got stuck with a property you aren't able to sell... it's crucial that you take the time to learn the ins and outs of landlording, all the potential pitfalls, and equip yourself with the knowledge (and professional help) to set up and run everything legally and SMARTLY!
For instance, how much will you charge for security deposits? Will that amount cover potential damage or eviction costs? And what about maintenance: will your tenants be responsible for the yard or paying all utilities, and how will you enforce it without costing yourself extra money? Who will prepare your lease, and will that lease be tailored to your property and needs? What about bookkeeping of all the expenses and income, and 1099 tax prep needed? While it's all definitely doable by anyone... it takes a lot of research and education to make sure you set everything up for success. It's VERY easy to lose money in the real estate/rentals niche. And what if you DO have losses? Are you documenting them to be able to take the right losses on your tax returns? Real estate losses can, in some circumstances, SAVE you money!
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