Buying a rental in Naples, FL

8 Replies

Hello everyone,

I have about $200K that I can invest.  Looking in and around the Naples area.  The goal is to rent out the place and also be able to use it for myself and my family maybe 5-6 times per year.  And, if I can make money, that would be a bonus.


What type of property is best to focus on?  Townhome, condo, single, etc.?  Which area of Naples is best to focus on?  Closer to the beach?  Maybe on the other side of 75?  I know some communities don't allow short term rentals, so if you can recommend some subdivisions that allow at least a 7 day rental, I would appreciate that.


Just looking for the best possible way to spend that money and still be able to enjoy the vacation home myself.  And of course I want to break even or better.

TIA

Hi @Russell Volk ,

If you're purchasing anywhere in the City of Naples, or Collier County as a whole, personally owned vacation rentals have been completely banned. Therefore, there are no communities that allow short term rentals. Most will allow a maximum of 3 new leases per year, with a minimum 1 month lease. This application often requires a full approval from both a rental perspective, as well as that tenant having to be approved by the HOA as well.

You definitely do have a few other options if you're looking to purchase an STR specifically, though. Marco Island, Sanibel, Fort Myers Beach, and Cape Coral are all local cities that do allow STR's with no restrictions, if not in certain approved areas. Please let me know if you're interested in learning more about properties in these areas, and I would be happy to help!

Hi Russel. West of I-75 is definitely your best bet for short term however it will come down to what $200K gets you in our market... you're probably looking at a nice 2/2 condo. Single Family is not available at that price point (Maybe a fixer outside of a short term rental area.) Best you can hope for is a condo within an association that allows 30 day rentals - most seasonal renters rent from November-April in 30 day+ periods anyhow (During this period rental rates essentially double as the snow birds come down to vacation). I just helped a client buy a turnkey 2/2 condo only 3 miles from the beach in North Naples for $188K - something like that should make a great rental for you. For something within that budget that allows weekly rentals, you may have to search outside of Naples (Collier County).

If 200K is your budget that makes things a bit more difficult. If you can put down 200k and have a small mortgage your opportunities increase quite a bit. I am a broker in Naples and live here as well. It is a great city. I should also say that the majority of my personal investments are in cape coral. I love the cape but you need to be cautious of the UEP. I have two houses side by side and with assessments the tax bills for just these two properties totals about 11K a year. Marco Island is another great place but prices there are extremely high for SFR. Your best bet there is a condo. I do own a lot there and may build a STR however, a nicer upscale house will cost about 700K+. Including lot value, the total would be around 1.2M. You will never get enough return to make it worthwhile for a STR. In general, prices in SW FL are through the roof. If you want more info please DM me. I am available 7 days a week.
John L Thedford,
Licensed Real Estate Broker
Wealth Realty And Property Management, Inc

@Robert Alpizar

We're looking at buying a rental in SW Fl and not sure if it makes more sense to buy a new build or a condo like the one you just mentioned.  We love the beach so of course that would be our first choice but looking for cash flow of course.  About how much rent would you expect to get from the condo you mentioned? Does the building have a PM?
  

@Stetson Miller

Hi stetson, We were looking at a new build in Cape Coral for LTR but you mentioned STR. What part of Cape Coral would be good for STR? The house we are looking at is 3/2 2024 sq ft for $238,000. We would pay interest on the loan while being built and closing costs so all together about 250,000. We were told we could get $1900 a month in rent but that sounds a little high. We were also told that the vacancy rate in Cape Coral is 3% but when we checked it looks more like 10%. I know the market is crazy now so maybe that number is a little high but it makes us think twice.

Originally posted by @Lynn Berg :
@Robert Alpizar

We're looking at buying a rental in SW Fl and not sure if it makes more sense to buy a new build or a condo like the one you just mentioned.  We love the beach so of course that would be our first choice but looking for cash flow of course.  About how much rent would you expect to get from the condo you mentioned? Does the building have a PM?
  

Hi Lynn, if I were to buy a condo in Naples it would be West of I-75 which makes it appealing to seasonal renters... I would rent monthly during peak season and try to find a short term tenant off season (6 months or so). Condo makes a lot of sense if your budget is around $200K. Building West of 75 is costly... you would want to build East of I-75 and it would be more suitable for Annual Long-term tenants. The area I would build in is Golden Gate Estates (No HOAs, Cheap(ish) Land, Plenty of Contractors/Builders to choose from that can build affordably).

Feel free to DM me to discuss further. 

P.S. That Condo I had mentioned would rent for $3,000+ Seasonally (December-April) - about half of that rate during off season. That's ballpark as it greatly depends on area, condo itself (Finishes, etc.)

 

For STR in Cape Coral it depends on your budget. You can be most anywhere in the Cape, preferably outside the current utility extension project area, have a nice 3/2 SFR with a pool (a must) and it will rent. + den or 4 BR even better to accommodate a few more people. On the higher end you should be in the SE or SW, closer to Cape Coral Parkway and the amenities, restaurants, bars, shops, closer drive to beaches, etc, and ideally on water where renters can paddle board, kayak, or even keep a rented power boat there. I've sold both types and they both rent very well. Mind you, you won't make a killing but if managed well, you'll cover your nut, build equity, and have a place to enjoy yourself.

To @Russell Volk 's original question, with $200K you might lever-up and buy a couple properties. Money is cheap right now and with $100K equity in a mid-price property you should be able to ride out any bumps in the road. The vast majority of Sanibel Island has a 28-day minimum rental term restriction. The Cape and other towns aren't as restrictive. In my opinion, doing multiple rentals a year in a condo community seems like a major hassle to me unless they have on-site management that is set up and supportive of owners doing that, in Fort Myers Beach for example. Otherwise you're having to get approval of every tenant by the HOA, not to mention the HOA fees, depending on how much they are and what they cover, can kill cash flow.