Hi, I am planning to make my first investment in a single-family home. The location is Palm Bay, Florida, and the cost of the property is $340K.brand new construction, Some of the properties don't have an HOA, while those with an HOA are around $600 per year. My concern is that I've noticed rental properties in this area aren't very steady, and homes tend to stay on the market for a long time. This also doesn't seem to align with the 1% rule. The property I'm considering rents for about $2K per month.
I'd like to know what you think about these properties. Do you have any suggestions regarding HOA? Is it worth it, or not? Also, what do you think about the area?, im from NYC.
@Veronica Osorio have you considered looking a bit south in Indian River county? I personally invest in Sebastian and we get solid returns. We like the small multi family in this market. Happy to dive in deeper if you like.
Hi Veronica, welcome to Florida investing! I’m a mortgage broker and investor based here, and I’ve worked with clients buying in Palm Bay and across the state.
You’re right — a $340K new build renting for $2K/month doesn’t hit the 1% rule, so it really depends on your long term strategy. If you’re focused on appreciation and lower maintenance, new construction could make sense, but if cash flow is your priority, you might want to explore other areas or price points.
If you work with an agent/lender that knows investing and can structure a great deal. You can work in seller credits to use toward rate buy down so that the property does cash flow.
As for HOAs — I personally am not a huge fan of HOA's for two reasons: it's an uncontrollable cost and some are not investor friendly (some limit rentals or add fees). Always good to review the docs.
Reach out if you'd like to chat more. Happy to help however I can!
Hey, Veronica! Exciting about your first investment property!
I am originally from Central NY and have been living and investing in Florida for over the last 5+ years.
As far as the 1% rule goes, especially as we get into these growing Florida areas, does not seem to be too easy to come by these days. I believe the original intent of the 1% rule was just a quick way to see if the deal was worth investing your time and doing a little more due diligence. In todays market, most deals seem to be unlocked in the due diligence phase and using a little creativity.
What is your investment strategy for these properties. Do you already have a good amount of cash saved up and now you want to invest in strong cash flowing rental properties?
A lot can be done in the purchase contract negotiating these days to make a good deal. We have been making a lot of offers with seller concessions to pay for closing costs and buying down the rate. For the same end number to the buyer and same cash out of pocket for you, there are multiple ways you can structure the deal, we just need to know what your investment strategy is, so we can craft the offer and financing based on your strategy.
Hi Veronica, thanks for reaching out! It’s great to hear you’re planning your first investment, exciting times ahead.
We’re also originally from NYC and now invest across six states, with nearly ten properties here, so we understand the importance of careful market analysis when stepping into new areas like Palm Bay.
Regarding Palm Bay, brand new construction at $340K with $2K monthly rent sounds promising on the surface, but as you noted, rental demand and turnover can vary a lot. The fact that some properties don't have an HOA could be a benefit, no extra fees, but sometimes a well-managed HOA can help maintain property values and curb appeal, which matters for long-term growth.
With HOA fees around $600 per year, that's relatively low and could be worth it if the HOA is active in maintaining common areas and enforcing standards. However, if the HOA is lax or fees are high without clear benefits, it might be better to consider properties without one.
As for the rental market and homes staying on the market longer, that’s definitely a red flag to dig deeper. It’s important to evaluate vacancy rates, local job growth, and demand drivers in Palm Bay. The 1% rule is a useful guideline but not absolute, some markets have different cash flow dynamics, so look at the bigger picture including appreciation potential.
Since you’re coming from NYC, also consider how you’ll manage the property, local property management can make or break your experience, especially when investing out-of-state; or do you plan to self manage? (We personally self manage most o four properties).
If you want, I’d be happy to share more insights, etc.
Congrats again on taking this step! With the right research and strategy, you can make it work.
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