Tip 1: Make Sure You Invest In Areas With Strong Rental Demand
The most important thing to remember when investing in property is to buy in an area that is in demand. There is really no difference between the sunshine state of Florida, or a row of terraces in Bradford in the UK when it comes to choosing the right area.
By right area, we mean one where there is likely to be a good supply of prospective tenants willing to pay the level of rent that will not only cover the cost of your investment, but also generate a decent profit each month. Any rise in the value of the property then becomes a nice little bonus to enjoy.
Tip 2: Look For Properties That Have Tenants Already In Place
This may sound obvious, however it cannot be stressed enough that “tenanted” should mean just that. The promise of tenants is really not enough in the Florida market as there should be enough demand in the area you are investing in to have them already in place or waiting to move in.
Florida tenanted properties are the easiest way to generate positive cash flow from day one and cover the costs of ownership. As any serious property investor will tell you, having tenants in your property long term is the best way to make money rather than having your tenant rent short term and the associated hassles that go with it.
Tip 3: Is It Close To Major Business Districts?
Back in the old days before the credit crunch, many property investors were fooled into thinking that no matter where you invest in a growing market, as long as your property was within a 30 mile radius of the city centre then you could expect high rental demand and benefit from any ripple effect. This is not the case anymore; with the rising cost of fuel, people prefer living closer to their place of work so that they can avoid travelling on congested roads. They also prefer having access to good local amenities.
Properties are heavily discounted enough to buy without resorting to investing in areas that have low levels of rental demand because they may appear to be a bargain.
Tip 4: Research The Local Environment
As you might have heard on the news there are good and there are not so good areas of Florida. Your typical young professional or growing family will not want to live in an area with high levels of crime or where gangs roam the streets at night.
Investing in an up and coming area is one thing, but if an area has gained itself a not so good reputation over the years, this will be impossible to shake off. To avoid these risks, opt for new developments in areas that offer a combination of green space and on good routes into the city centre.
Tip 5: If You Want To Invest In A Short Term Holiday Rental, Prepare Yourself For Seasonal Lulls
For those investing in holiday homes in Florida, the potential rental income can bring in between $700 and $1000 a week plus in areas of Orlando.
Again a property will need to be chosen carefully and after the costs of ownership are taken into account, the slow steady route of Florida tenanted property will generate a better return on investment in the long term. Think of it as comparing the tortoise with the hare.
Tip 6: Is Your Property Fully Managed?
If you are investing from a distance it is a good idea to have your property managed by a team of competent professionals. This just makes things a lot easier when it comes to the day to day running of the property including maintenance issues, collecting the rent and utility bills.
With the right property management in place, you can, for a fee typically between 8-10% of the rental income, just rent it and forget it.
Tip 7: Seek Advice From An Expert
Property prices may be low in Florida, however investing in property can be an expensive business which is why it is useful to have someone looking out for your interests and helping with due diligence in any deals you make.
In most cases, a property consultancy will be happy to help you through the process and any negotiations. This will save you a lot of time and hassle unless you really know what you are doing in this market. It is also recommended that a Florida property lawyer is appointed to review any purchasing agreements and title deeds.