Given current conditions in Southwest Florida, I would think that the home rental business would be strong

Asked by Mike Piche, Englewood, FL Tue Nov 4, 2008

with a ready supply of potential tenants displaced from homes lost in the foreclosure process. My assumption is that these people still are employed, have children in local schools and would want the disruption in their lives held to a minimum. That said, how viable is it for an investor to purchase properties via short sales for immediate rental to the same homeowners about to be dislocated? Sort of a win, win, win situation isn't it?

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Bob & Jen Lapietro’s answer
Bob & Jen La…, Agent, Port Charlotte, FL
Tue Nov 18, 2008
Yes it seems like the rental Market is much stronger than it was and prices are reasonable but Buying a home at todays prices leads to many benefits, including Tax deductions and of course equity in the hme whenyou go to sell it. Buying still has bigger advantage in the long run.
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LLoyd Nichols, Agent, Fort Myers, FL
Tue Nov 4, 2008
Mike,Its a double edged sword.The tremedous raise in foreclosures and short sales may help the investor only if he is careful.,An investor will do well if he/she buys a property which "stands out" and if he/she paid a low to market value price.You have to do more homework and be more picky.
Because there is so much for rent out there, many have struggled and very often had to drop their prices. In 2004-2006 investors paid much more for their invesment properties and in return did get more in rent. Its all relative.Now, you will pay much less, get deals, even pay less then market value and in return most often get less rent per month.The big plus is that investors can use less of their own money for downpayments for example.They don't need as much return to stay afloat..

Calculate your CAP.. You can do very well as southwest Florida is growing strongly. You may be able to rent the short sale to the ex owners, but unless you offer them an attractive package, they will go elsewhere. You make a good point that many want to stay in the same home but its not as clear cut as that. You have to be very competitive.Again its about the CAP.

LLoyd Nichols
Right Choice Realty LLC
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Bill Eckler, Agent, Venice, FL
Tue Nov 4, 2008

We're not sure it a "win, win" situation because the owner still loses their investment in home ownership. But antthing is possible; circumstances would have to be ideal for both parties.

Judging from the condition many of these homes are being left in, you may find yourself embracing a less than perfect renter.

You are correct in your assumption about the increase in rental interests. At this point, many potential buyers are looking for renting with the option to buy opportunities which is something we would only consider with a substantial deposit put in place buy the purchaser.

Purchasing in the right location and renting is a good plan.....just uncertain of renting it to the current owner, a little too idealistic? If this is your chosen path, be certain you are investing in a location with a strong rental market. Naples, Venice, Sarasota, etc.

If you are interested in Sarasota County foreclosure information, we would be happy to provide you with this information.

Good luck,
The "Eckler Team"
Michael Saunders & Company

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