Which Type Of Property Rents Best In Tampa Area?

Question

These forums have been a Godsend.

I am in the process of moving to the Tampa area from NY. After the move and some liquidation of assets, I'll likely have 50-75k to invest. My RE agent insists that I should only look at a 3+BR townhouse type property, less than 20yo and in the surrounding areas of Tampa.. (Wesley Chapel, Brandon, etc)

I get the fact that with a townhouse/condo, there is little property mgmt involved and it's an easy intro to start out as a landlord down there. But, why only push the 3+br? Do 1 and 2BR properties not rent as well or have higher vacancy?

Dan Maciejewski · Answer

Yes, short term rentals or vacation rentals are often called AirBnBs.  That's just one advertising platform, but it's kind of like Kleenex or Bandaid.

If bought right, they make way more than a long term rental in this market.  For the area most of my clients buy in, a once 3/2 pool home would rent for about 2500-3k a month.  That house as an STR, very conservatively, would be grossing an average of 7500 a month.  And if you self-manage, you save an extra 15-25% in management fees plus all the costs of the handyman repairs if you do the work yourself.

Dan Maciejewski · Answer

Definitely not stepping on your Realtor's toes, but I get cautious the farther from Tampa you get for rentals.  A lot of people got screwed the last few years buying in ______ for long term rentals and got smacked by trying to set their rent 50% above market and having a lot of vacant competition.  Most people want to live closer to work, or city life, or the beach.

I suspect they are telling you to look there because 50k is 20% of 250k, and you can't get a lot for that when you get closer to the more desirable areas.  Except for the condos that they are suggesting.  Just make sure you do your own due diligence as to rents and your own personal ROI goals.

Whether you're looking at long term or short term, the rules for vacancy are always location driven.  Bedrooms don't really affect vacancy (or occupancy) rates -- at least here, but they will affect the rent rates you can get.

When you look at condos (almost every townhouse you see will be a condo) make sure you check the HOA fees, the new taxes, and the rent restrictions -- some places require 1-3 years of ownership, and I've seen Realtors help investors get in trouble and not be able to rent their new purchase.

Also, at that price point, I would probably buy a duplex (if I could get one) in an area with a little less demand, than a SFR/Condo in an area with a little higher demand, but that's another story!

Luke Rorech · Answer

Hi @John Dersoe my personal preference is buying a single family home with the intention of using it as a short term rental. Best chance of being cash flow positive while holding an appreciating asset on a 30 year fixed. Just make sure you, or your agent, are clear on the rules and regulations in the area.

Michael Haynes · Answer

Hello John Dersoe from NY moving to Tampa. Do you own a home? If not, where do you plan to live in Tampa?? To cut to the chase...you buy a fixer upper and with your Down Payment amount you are going to have to look around and make sure you would live there for two out of five years in order to make it your Residence and then be able to Sell Tax-free up to $250,000 profit. That's it.

John Dersoe · Answer

A little bit of research and some sound advice goes a long way. Thanks a lot. I think there's a plan in the works for some investment properties with a realtor that's on the same page.

John Dersoe · Answer

When you "say short term rental".. AirBnB? My initial thought was that stable tenants would be the best scenario. How does short term rental make that much more money? My house in NY has had the same tenants for over 6 years. Until I sell or move to Tampa in a couple of months, I personally do all the outside maintenance.. seal the driveway, paint, shovel snow, cut grass, etc. As for the type of property.. I only thought of the condo/townhouse because it would be less headaches than a single family since the mgmt co would maintain the community and outside of the property.

Kristina Kuba · Answer

@John Dersoe

If your goal is both cash flow and appreciation, you should consider a short term rental in Tampa proper.

For appreciation, Wesley Chapel and Brandon are suburbs that have lackluster appreciation compared to Tampa.

For cash flow, short term rentals will likely perform 2 to 1 for gross cash flow.  Look in the City of Tampa limits and unincorporated Largo for the least short term rental restrictions.

Which Type Of Property Rents Best In Tampa Area?

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