Florida has had one of the highest rates of foreclosures in the country, but do we have deals and bargains on homes, condos, apartments! Don't rush into becoming an investor, and do your homework - when you decide this is the right place for your money, consider Daytona or Ormond Beach.
The most important considerations to investing in Florida real estate for rental income are
*Location
*Condition
*Price
*Financing
Location
1. Areas with homes priced in the middle ranges are usually well-maintained, and command reasonable rents
2. Run-down neighborhoods, with boarded up homes and lots of foreclosure signs, can represent opportunities, especially if you see new construction, and if the location is near schools and public transportation
3. Look for neighborhoods with a preponderance of 3 bedroom/2 bath homes, and ones similar in size and age. For condos, look for buildings with mostly 2 bedroom units.
Condition
1. Homes built in the last 10 years are more desirable, as fewer systems will have had time to break down, and major renovations should not be necessary.
2. If you do find an older home you think has room for appreciation, be sure all the parts like wiring, plumbing, foundation, and roof have been updated.
3. Determine which maintenance issues are cosmetic and which will require major work. Painting, carpet, wallpaper, countertops are all minor repairs. Roofs and foundations and possible termite damage are not.
Price
1. Be sure and make your offer contingent on an inspection. If you choose to buy a foreclosure at auction, you will have to do this before you place an offer. If you buy a bank-owned property, they will not give you any disclosures - it is Buyer Beware.
2. The actual price you decide to offer is dependent on many factors, and a real estate professional familiar with the area like myself is your best resource. You will not get an appraisal with a bank-owned home, and a seller in financial difficulty will not buy one either. So a Realtor who prepares a Comparative Market Analysis will give you the most accurate idea of the property value.
3. You can tie your offer to the appraisal done by your lender, though this contingency may not be acceptable to the seller. One recent article I read suggested you offer 50-60% of the listed price of a bank-owned home, dependent on condition, as a starting point.
4. Don't be in a hurry. If you do offer 60% less than listing price, be prepared to wait while the bank hopes for higher offers and eventually decides on yours. In the meantime, keep looking.
Financing
1. Check with your local lender
2. Be prepared to put more down than for an owner-occupied home
3. Consider living in 1 of the units
You can understand now all the decisions you will have to make to start in real estate investing, but the appreciation and rewards have historically outperformed all other vehicles. Our Daytona Beach and Ormond Beach areas are overflowing with great opportunities for investment properties. Let me know what information you need to get started.
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