Updated 3 months ago on . Most recent reply
owner occupancy rate
I am looking to invest in a condo for rentals that has a fully funded reserve, no upcoming special assessment and 1300 quarterly HOA fees. They accept 12 leases with 14 days minimum. However the condo has a 41% owner occupancy rate which is low. The condo is non gated, has a pool build in 2007, elevator present and not in a flood zone and has 3 stories. I am getting good leads for tenants to rent it seasonal with good cash flow. I am worried about the 41% owner occupancy rate. However, I believe for investment it's a good cash flow and I should hold it for 10-30 years for good resale. Is resale will be an issue if I hold? Any feedback? Thank you!
Most Popular Reply
Cape Coral is a great small city! Your proposal sounds reasonable, but the timing might not be the best.
I've been visiting Cape Coral this week (mid-November) on a scouting mission. As I inspect listings, I see the 'for rent' and 'vacation rental' signs way too common--on almost every block in many parts of town. I'd be more concerned about the vacancy rate than the owner occupancy issue.
Before you move forward with this project, scrutinize your numbers and add a good buffer. This local market still has room to decline IMHO. The increasing number of listings, longer average DOM, and declining net sales prices reinforce an old idea: buy way below the current market price to have more 'wiggle room'.
No one can call the exact top or bottom of any market. So each of us must read and interpret the signals the market is giving.