BiggerPockets

Hello group.

My faith in the internet proves there is no topic that there isn't a forum for!!

I have been considering investing in a rental property in central FL because houses down there are so cheap. I have been looking at single family homes (3/2, 4/2) in the Kissimmee area in the $50-$80k range (there are dozens and dozens) and looking at bank owned. I will pay cash for the property.

I did go down there and look at a couple 2 weeks ago, and drove through a lot of neighborhoods, most of what I saw, while blue collar looking, was pretty well kept up and neat. Taxes are all over the place, from $70-$250/mo. Originally I was not really considering renting it long term, I was think of maybe just sitting on it, eating the ownership costs and maybe using it occasionally for getaways, or letting friends use it.

The realtor I was working with told me there is high demand for rental property and I could probably do well if my ownership/mgmt costs were low. So I am think now about a long term rental property that I will likely never spend a night in myself.

I live in MA, and would have to pay a management co to take care of everything. I spoke with one on the phone yesterday who gave me some details, and warned me of the "blue collar" housing market in this price range, damage, etc. But also elaborated on his screen process etc. He quoted me $150/mo with a $1000 initial fee to screen and secure a tenant. I have no idea where that fits in the general range of these types of services.

The figures in my head are rents in the $550-$900/mo range, and ownership costs (mgmt, insurance, taxes) in the $300-$500/mo range. Startup costs are the wild card.

Anyway, I'll stop there, lest I lose you. I guess my first question is if you had $50k-$70k to invest in RE for rental income where would you look? SF house or condo? (aware that some HOA/Condo fees are insane and may go out of control). $300- $400/mo clear with at least a property value that holds if not increases a bit is appealing and seems possible.

I am not dead set on FL, or even central FL, but there seems to be an abundance of homes there and a good rental market.

Comments? Suggestions of other sites/threads to go read? I realize that is a WIDE OPEN question, but was hoping to gain some insight from some other landlords here.

Thanks in advance for any help....

I think for the most part, a rental anywhere in the central Florida market would be wise. I would suggest that in the Kissimmee/ Poinciana area to have your agent pull a report of what has rented out recently and for what prices. Overall, I know the rental market in my area is very good, especially if the homes are priced right. Here on average people will rent for 2-3 years+ while they are trying to get used to the area or to improve their credit.

Just an idea, why not try the Davenport, Clermont area, still close enough to Disney, but you might be able to pick up a rental that is zoned short term rental, which opens more options for you.

Good luck on your home search! I think that any way you look at it, you are making a good decision to invest in a home here, especially since you can't build them for the price that they are selling them for in the Central Florida area.

A few things to consider:
1. For 6 months of the year you will be watching for hurricanes to see if will make landfall in your area.
2. Due to all the damages - insurance rates have gone sky high.
3. The bugs grow bigger in FL.
However, each person has to decide where they want to invest - just go in with your eyes wide open.

Thanks for the insights, much of this I have learned already. Condos/townhouses are enticing, but I know the HOA/fees situation is never good and can inflate on you also. I will expand my range a bit, look at St Cloud, Devenport, Clermont.

Can any one recommend a good full service property manager in the area? Prep, market, screen, rent, maintain??\

Thanks

I would stay away from Condo's - SFH have dropped so far in price that the differential does not compensate for the mgmt fees.
TTFN,
Greg

I'm looking at a property in Canoe Creek Estates in St. Cloud. It has a $322/yr HOA and a community pool. Google street view shows a pretty well maintained neighborhood. Didn't find much Googling for this HOA.

Does anyone know how to get in touch with the HOA and see just what the deeded restrictions are? I am wary of HOAs. I do see homes listed for rent in this neighborhood, so I assume long term rentals are allowed.

?????

JH

Yeah stay away from condos. The HOA's down here suck.

Property management is usually 1/2 first months rent and 8-10%. Make sure you check references though.

Central Florida has lower insurance than coastal areas.

Thanks, I found that after I posted, have all the HOA docs and am reviewing them now....

What are you closing on - a SFH or a condo?
For insurance policy - look for an insurance broker in the are and call them. Google it. Or yellowbook it.

If you have hurricane mitigation you can reduce your insurance costs, but they are really high. Mine is about $6500/year for an ordinary 3/2 house without hurricane mitigation, so check if the property has approved shutters and the appropriate roofing design (newer homes are more likely to have this).

Also HOA's in Florida are particularly powerful, and can lien you for allsorts of minor things.

If you own the home outright with no mortgage then you will have a chance at a positive cashflow, but overheads are quite big.

Lesley