Thoughts on investing in Tampa?

Question

We spoke to our broker and also been caught up on the news. But it seems that property taxes will increase extraordinarily high next year and coupling that with expensive home owners insurance. All while, the interest rates are still high.

How do you work with this or workaround this matter?

Also, besides Tampa or Florida as a whole, where else seems to be good cities in invest in?

Stephen Dispensa · Answer

Yes, once you purchase the property, the property taxes will go up on January 1st of the following year based on the purchase price. You should definitely always keep this in mind when underwriting these investments.

Diana Tran · Answer

@Stephen Dispensa It was quite overwhelming when my broker first told me how much the property tax will jump once I purchase vs what it is now. But what you're saying all makes sense to me. This part is where strategy kicks in.

Stephen Dispensa · Answer

Diana,

I think the most important thing as an investor is to be flexible with your strategy. I understand that we all would like to be able to buy cash flowing rental properties at a low interest rate with zero deferred maintenance and sit back and collect checks. But if it were that easy, everyone would do it.

The question regardless of what market you're in is: "How do I add value?"

If long term holds aren't working right now because of high interest rates, maybe look into mid-term or short-term rentals.

If mid-term or short-term rentals don't work for a property or market, consider simple fix and flips.

If entry prices for simple fix and flips are too high, maybe look for major renovations.

Etc. etc. etc.

Katie Smith · Answer

Hi Diana, these are pretty common problems that investors run into. I wouldn't necessarily let it steer you away from investing in FL as a whole. You can look into smaller FL towns - such as Lakeland and Winter Haven. The good thing about investing in Tampa - you will most likely never have an issue finding a qualified tenant. Higher rates & insurance = higher rent.