Rental property investing in South Florida is currently a challenge to find cash positive rental properties. Due diligence is a must, and patience is essential. Finding good investments can be consuming. Investors should hire an experienced real estate professional to work with for the long game, in order to seek out the best properties.
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.
For buyers, it IS a buyer's market! There are a solid number of properties on the market available to buy, and buyers can often negotiate the prices a bit. However, if buyers are using FHA/VA financing,
they are finding it more difficult to find sellers willing to accept this type of financing as it can come with some additional loopholes that conventional mortgages don't have.
Sellers are currently able to sell at prices that make them happy but need to be careful as there are still some pitfalls encountered in the process. Low appraisals are a problem that are sometimes blowing up sales contracts, forcing the buyers to walk away and sellers to start the process all over again. Also, we've seen some ruthless inspection reports with unrealistic repair estimates attached. Buyers sometimes freak out when this happens, and sellers become defensive and don't want to negotiate. The sales contract is then jeopardized unless a very neutral experienced person is there to add calm and logical reasoning and assist both sides in negotiating terms they are both happy with.
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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