Foreclosure in Clearwater>Question Details

Sam, Home Buyer in New Jersey

Investment property in Clearwater, FL?

Asked by Sam, New Jersey Fri Oct 26, 2007

I am living in NJ and I am looking to buy investment property in Clearwater area. I do prefer condo and I heard so many storeis about how hard is to rent and hard to find insurance. I also do not know how realistic is my idea to be absentee owner . Having very bad experience with my first home purchasde here in New Jersey I am just afraid that real estate agent wil tell me things I like to hear. Can someone give me their honest opinion how realistic is to rent property in FL and be in NJ. Thank you in advance.

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Sam,
We are definitely in a buyers market and with all the condo conversions, condohotels and homes that haven't sold on the market we are finding rents have not caught up to cost of ownership when you rent a home a $200,000 for $1200/mo that would cost you on average @$2,000 to own by the time you pay taxes and insurance.

Now that being said - people who have made gains in real estate here have tended to make it in appreciating values and not in flipping it. We had a client who bought a home on Clearwater Beach for $120,000 in 1997 and sold it in $2004 for $400,000. Those that have owned property for over 2 years in most cases have experienced gains in value. We live in an area that continues to be popular for all the same reasons: sunshine, beaches and a nice place to live. Forbes has said that Tampa Bay could experience a "V" shaped recovery since what's hurt our real estate market was more less over building and speculative real estate "flipping" for short term gain.

This is not a market for flipping and it's hard for real estate purchases to "pay for themselves" or cashflow on day one. There are a few I've seen pop up recently - one we've shared with people is The Avalon luxury condos in Clearwater. It's a gated community with a wonderful pool in a tropical setting just 3 miles from Clearwater Beach. They recently changed their condo docs to allow weekly rentals which could go from $700-$900/week - since more people could rent it and the prices on 2/2 condos is @$150,000 and under you could see where if you rented it 50% of the year or 26 weeks a year it could cash flow while at $1500/mo for an annual rental is unlikely with the amount of other rental options on the market.

As far as managing it remotely, lots of people do that, however you may have more immediate bookings using a rental company - however they usually charge @10% to manage it for you. We help our buyers who are looking for this service connect with local companies that offer that service.

If you would like any additional information feel free to check out our website that specializes in Clearwater and the beaches with real estate market reports, local tax and insurance info and you can search all the homes for sale by all the real estate companies here. Good luck with your search and keep asking questions and get the info you need to make sound business decisions. :-)

P.S. You might enjoy seeing the video testimonials from our past clients - we are focused on their goals not selling any one home or condo!
2 votes Thank Flag Link Sun Nov 25, 2007
There are great opportunities for buyers today but only if the buyers intend to hold the property for more than 2 years. Inventory is at an all time high and we anticipate even more properties on the market as foreclosures and short sales increase. Whether it is the right time for you to buy depends on your reasons for investing.

The rental market is soft since investors can't sell properties and are looking for a way to reduce expenses. If you are looking for positive cash flow this is probably not the time to buy unless you have cash. If you want to take advantage of the declining prices to purchase property that will appreciate over time this is the time to buy. If you are waiting for the bottom it is here for some properties but not for others. Just like the stock market, few will get rich trying to time the market.

The key is to identify your goals and the area you want to be in. Clearwater Beach could be a great option if you can hold for 3-4 years. It is undergoing renovation to a more upscale look but right now looks like a war zone. Investors are walking away from deposits on new construction because they can't afford to close. I would focus on properties which allow short term rentals to increase potential income. Finding tenants during the season is not difficult but Fall and late Spring can be challenging.

Single family homes are more challenging to maintain for out of state owners but can be good buys. Condos offer the advantage of an association to handle the exterior maintenance and someone is usually around to report on problems. Condo hotels may be the easiest investment because there is usually an on site manager who rents the units out and takes care of maintenance and repairs.

Martha Vasquez
Century 21 Sunshine Realty
2 votes Thank Flag Link Sat Oct 27, 2007
I found Martha's reply very interesting. I live in the UK but want to buy property in Florida. Probably Davenport or similar area zoned for STR. And Clearwater Beach was a dissapointment on our visit in February, our favorite small hotel gone, replaced by town houses that wont sell. I was offered a "time share" in one of these homes. "Oh its not a time share Sir!". (I Forgot they call it something else now?)

So which homes are a good buy at the moment for a cash buyer?
1 vote Thank Flag Link Sun Oct 28, 2007
Sam,

We did it for 8 years from upstate New York and didn't have a problem. The secret is identifying a top notch management company that will truly look out for your interests at a reasonable rate. The going rate is 15-20%. It's important to know if they offer maintenance support for thei customers and how many units they service. It's important to not be too large.

There are some wonderful rental areas on the west coast that receive heavy annual seasonal traffic including: St. Pete, Clearwater, Sarasota, and Venice. These locations offer the best in beach front living. Obviously, the closer to the water, golfing, amenities the more desirable your rental property and the higher the rate you can expect for your rental.

We would be happy to assist you if needed. Please feel fre to be in touch with us.

Good luck,
The "Eckler Team"
Century 21 Almar and Associates
Venice, Fl 34285
ecklerteam@comcast.net
941-408-5363
0 votes Thank Flag Link Wed May 14, 2008
Hi Sam. I am a strong believer in the power of single family homes for investment income. On average they appreciate faster, have a higher demand in the resale market, and rent sooner. However, I like condos as vacation homes. The difference for me between an income property and a vacation home is between its use. Do you plan on personally using the property from time to time? If so, then go condo. If not, buy a single family home and hire a strong property manager. With a single family home, you are going to have more control over the property, its maintenance, and its use. A condo is going to be governed by the rules of the association. I have yet to work with someone who was unable to get insurance. Find a real estate pro and they will guide you through the process.
0 votes Thank Flag Link Thu Jan 31, 2008
Hello Sam,

As the others have told you, it is definitely a Buyers Market. We have over 1300 short sales listed in our Multiple Listings for the County with some of those being condos and townhomes. Purchasing a "short sale" in our area is probably one of the best investments you can make at this time. I am presently working with an investor who intends to do just that. He wants to invest $1,000,000 in short sale properties, rent them until the market goes back up and then resale. This person is already a very succesful, educated local investor. He knows the market and how to work it. This is his only source of income and believe me, he lives quite well. My point is that if a local investor wants to invest this much money at this time, it is a good time for all investors. I have always been told- If you want to be successful at something, find someone who is already successsful and do everything they do.

I am also a Certified Property Manager for the area and would be happy to discuss managing your property once find a property to purchase.

Please contact me if I can be of any further assistance.
0 votes Thank Flag Link Fri Nov 30, 2007
I live in NJ, too and in April this year bought my first investment property in FL. I bought on the West Coast because it is an area that I want to retire to. I am letting other people help pay my mortgage. I try to fly down once a month because my job as a Realtor is crazy and I literally work 7 days a week, long hours. The only way I get down time is to fly to FL. so, that makes it easier to check on the property. I haven't been able to do that every month, so I've hired a management company. They rent the property out for me, and when something needs to be done for a tenant, or otherwise (I recently had my courtyard re-landscaped) they do it. I keep a reserve on hand for expenses and they take the money from there to pay for the work needed. They take 20% of the rental money, which at first I thought was a lot. Then, I tried juggling the scheduling of the unit, getting the tenants the keys, and worrying about something happening and not being around to correct any problems--ie backed up plumbing, a/c not working, etc, etc, etc. I realized it was worth it to pay the 20%.
Feel free to reach out to me via my website below to call me directly to discuss further. Good luck!
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Sat Oct 27, 2007
To answer your question , there are more questions to ask of you:
Why a condo?
Do you plan to live there part time?
Do you want to rent it out when you aren't there?
Absentee owner - that requires a good property mgmt company, which also costs money.

One think I CAN tell you is that as an Accredited Consultant in Real Estate, I will NOT tell you things you want to hear (most often it is what you DON'T want to hear, but need to know).

If you'd like to call and talk about this a little further, I'll give you my best advice - whether you like it or not, but it will depend on your answers to the questions above. Feel free to email me direct at PaulaBean@HomeOrlando.com
0 votes Thank Flag Link Sat Oct 27, 2007
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