The Florida real estate market is an excellent way to earn income. It can be either by buying properties you rent or fix and flip, which makes it a very sound investment strategy! The home you live in shouldn’t be looked at as an investment because it’s often an expense that doesn’t generate income. However, a good investment property in Florida to be improved and sold or rented are a very stable place for growing your assets.
It is important to understand real estate in your area before you invest. You should know the current market and differences between locations, demographics, property types as well as extra costs like maintenance that are higher for some properties than others. We’ve put together a list of characteristics that, when present in a property, can guarantee you a good rental.
Location, Location, Location!
No matter where in Florida you are, there’s a difference between the neighborhoods. Location is just as important as type of property purchased and arguably even more so. Different types of properties are also preferred for different locations!
Learn about the neighborhood before renting a place to ensure you know what type of people will want to live there. You’ll also notice that some neighborhoods are more desirable for professionals while other neighborhoods attract families or city workers.
Pay Close Attention: Foundation and Exterior Wall
Whether it’s an apartment building or a single-family residence, the owner is responsible for making sure the property is up to code and safe. This includes hiring professionals to inspect every different type of structure before signing any leases with tenants.
If you’re looking to make a profitable real estate investment, consider buying an outdated property with good bones. Buying something without major renovations is more beneficial if it has sturdy structure and foundation because that means the building’s value will be higher in the long run.
Return on Investment
The typical way an investment is measured, return on investment (ROI), can be a bit different for rental properties. Most property investors look at cash-on-cash returns instead of total ROIs when measuring success from their rentals.
You want to invest in a property where your yearly income from renting the property will cover upkeep and some of your own salary. Ideally, you should look for properties that are currently affordable before making any major investments like purchasing or renovating a building.
Low Cost Maintenance
When you purchase an investment property in Florida, make sure you know the age of things like the HVAC system and roof so that it can help your budget in major replacement costs. It’s important to know which areas are more prone to maintenance costs, as they may not be the best investment. You should avoid investing in properties located in flood zones or places with consistent severe weather patterns.
Property Appreciation Potential
In real estate, appreciation is the term used when a property’s value increases over time. This makes properties such sound investments because they tend to grow in price with age! You could also look at a property to determine whether some updates will improve appreciation. Properties in up-and-coming neighborhoods offer high appreciation if the area continues developing popularity after your purchase is made.
Calculate Your Holding Costs
Making sure that your property taxes and insurance costs are low is important because these two expenditures can eat into the profit you make from renting out a house.
Florida Property Warehouse is here to make the process of finding an investment property in Florida easy. One call with a local agent can match you with exclusive, off-market properties that will meet your goals.