Purchasing a house now, to live in the future, in FL

Short-Term & Vacation Rental Discussions
5yFollow

Purchasing a house now, to live in the future, in FL

Wesley MullenPro Member
Investor · Norman, OK · Member since 2021 · 56 posts · 21 votes

I recently came across a Twitter post in which the individual was looking to purchase a home in Florida in the present market in anticipation of moving there several years down the road and thinking the local FL market being even higher at that time. His plan was to rent it out until they were ready to move.

This got me thinking as it aligns with my future goal to eventually move to FL (looking at you Tampa area) and was curious if this seems like a bold strategy or not? I do feel that the FL market will likely continue to increase over the years, so purchasing now would ideally cash flow as well as gain equity and appreciation over time. Dependent on location, this could even be a short term rental with higher cash flow than regular rent.

Good strategy or too much risk with unknowns?

0Reply
27 views

Most Popular Reply

Obed Calixte
Real Estate Agent · St Petersburg, FL · Member since 2019 · 321 posts · 182 votes
5y

Florida, and Tampa Bay area specifically, has a lot going for it in terms of continued population growth, strong rental market, solid job market, great weather and the like. With that said, it has attracted quite of bit eyes and is a highly competitive market. 

Is your strategy a bold one, I'd say no -- out of state investing is very common here. What it will ultimately come down to is understanding your risk tolerance, determining your goals ( ROI, minimum cashflow etc) and building a strong reliable team.

1Reply
See this reply in the discussion

5 Replies

Jump to latestLatest
  • Obed Calixte
    Real Estate Agent · St Petersburg, FL · Member since 2019 · 321 posts · 182 votes
    5y

    Florida, and Tampa Bay area specifically, has a lot going for it in terms of continued population growth, strong rental market, solid job market, great weather and the like. With that said, it has attracted quite of bit eyes and is a highly competitive market. 

    Is your strategy a bold one, I'd say no -- out of state investing is very common here. What it will ultimately come down to is understanding your risk tolerance, determining your goals ( ROI, minimum cashflow etc) and building a strong reliable team.

    1Reply
  • Luke Rorech
    Real Estate Agent · Greater Tampa Bay · Member since 2017 · 392 posts · 290 votes
    5y

    @Wesley Mullen, Obed hit the nail right on the head. It'll come down to your goals and what makes sense for you. I personally know @Obed Calixte and would recommend you reach out to him as he's done a great job with past out of state investors and can help walk you through the necessary steps. Best of luck. @Obed Calixte

    1Reply
  • Michael Haynes
    Investor · Tampa, FL · Member since 2016 · 681 posts · 288 votes
    5y

    Hello Wesley Mullen from Oaklahoma. Here in Florida we used to warn each other when looking to buy a Rental property, to not get stuck with a Gator! That also goes along with the saying that, "a boat is a hole in the water that you pour money into." Here in Tampa the Mortgage Rates are at historic lows and the price of properties are at historic highs. I am selling my last Rental House in Tampa and we have reached what we who trade the Futures Markets call, "a Topping Channel," because of the dicotomy. At this point in the Market Cycle, there are unusually high spikes in Prices, which we have seen with properties selling for more than the Asking. I listed my house with an Broker who built a 3/2 house without a garage near me and sold it in one week for $383,000. She has three other new homes for sale and says because of the high cost of building materials she will not build another one. My listing got a couple of offers the first day and then flat for the first month. I lowered the price $5000 which has been where most of the properties I have watched, begin to be sold and the second offer came back and we signed a full price contract to close in July. You think that the properties in Florida will continue to appreciate and I am seeing that we have reached a plateau in price with the ability of First Time Home Buyers to afford a house in Tampa. My two Brokers say that houses continue to sell for Cash to the New Yorkers. From here I would say that you should play it safe and Invest in something close to home and a few years from now if you move to Florida bring your Cash to get the best Deal. Remember, we just started Hurricane Season and the new Administration is crazy on raising Taxes etc. 

    0Reply
  • Chris MuryBusiness Member
    Realtor · St. Augustine, FL · Member since 2017 · 182 posts · 100 votes
    5y

    Hey Wesley,

    I'll echo others that your strategy is not uncommon here in Florida. I'm helping many people do this exact same thing right now as a Realtor.

    In my mind, it all comes down to your holding period. Are you planning to hold 7+ years? If so, I would feel extremely comfortable with the purchase, especially if it can cash flow for you in the meantime.

    Good luck and keep us posted!

    Chris

    Chris Mury- Realtor543 Reviews
    WebsiteView Page
    0Reply
  • Dan Maciejewski
    Realtor · PInellas County Largo, FL · Member since 2016 · 902 posts · 810 votes
    5y

    We all see a ton of out of state investors that want to retire or move down here later in life.  It's a great plan.

    I will point out that there's a few strategies / outcomes that I see here in the Tampa Bay area and especially in Pinellas County by the beaches.

    1. Snowbird.  These people have come here for years and love a house or an area or a condo complex.  Then they buy what they know and love and come for 3-6 months a year.  Most treat it as a second home an do not rent it out.  They end up moving into their place and are super happy.

    2. Vacation and Second Home buyer.  Generally these people have visited, know and love the area, know the restaurants and know where they want to be.  They also want a home that they and their family can live in when they decide to -- or just vacation in it whenever they want.  

    These buyers usually rent it out for short term rentals when not using it.  We happen to be in one of the few places in the country where you can buy and actually break even or cash flow in this scenario.  Most vacation homes in the rest of the country just mitigate the mortgage when rented out.  These people usually eep the house as an asset and if they move, they usually have the house they want.

    3. Investment home buyers.  These people want the investment to come first.  The numbers are the main deciding factor, not necessarily the loving the home or area.  These people will sometimes buy multiple properties in an area they see profit potential in, or buy in several regions.  Usually they will use the home for their vacations, but not always.  If they happen to retire in the area, I see them either keep the investment as an asset, or sell it and buy a "keeper" home that fits their lifestyle better.  Sometimes it works out that they can also move in but it's not the driving factor for the purchase.

    The first thing to do is decide where you fit in this spectrum.  Then you know how to search and what criteria to use when searching.  You can't get the best investment AND the perfect retirement home AND the best appreciation all at once.  Or not unless you're named Derek Jeter or Ryan Howard, etc. . .

    While I am super-bullish on the next decade+ of the Tampa Bay Real Estate market, I always advise to not count on that.  If you're category 1, you can swing another mortgage and you just want a second home and shouldn't care about the absolute market value..  Category 2, you can afford some loss but the cash flow and utility is what matters, not the ultimate value of the home.  And category 3 is all about the cash flow, not the retirement use or the resale value.

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free