South Tampa advice

9 Replies

BP,


I'm looking for some advice on South Tampa. General guidance for people with families is to stay between Gandy & Kennedy. However, I see a lot of rental properties for sale south of Gandy, both on the MLS and on bandit signs. An example property listing:
-Duplex posted on MLS for $95,000
-Advertises 10% cap rate (not reading too seriously about this)
-Gross annual rents $14,400 (assuming rents are $1200 per month)
-Taxes: $1356
-Insurance: $525
-Water/Trash: $1200

Each unit is 2/1, approx. 1450 sq. ft. States that units were renovated in 2010.

Question is not whether or not this is a good deal (numbers above were simply a part of the listing--I'd rather decide on if this area is worth investing in before I decide what price I'd pay). My question is: what am I missing about living below Gandy (other than bad schools)? Is $600 a month a reasonable rent for similar properties in the area? I'd love to discuss in more depth with someone who is knowledgeable about this area of Tampa.

Forrest

What exactly do you want to know? I grew up south if gandy and know the area well...

That area is perfectly fine for rentals.  Your insurance number is way off even if you don't need flood insurance there you're probably looking at $1200+ just for homeowner's insurance.   There's no way it's close to a 10 cap.   It's going to be hard to find big cap rates in the most desirable South Tampa neighborhoods and the area between Kennedy and Gandy would  be best for flips rather than rentals.   South of Gandy is a good area to attract people that work at MacDill.  

To get a rough idea of your return you can take your gross rents and subtract the landlord  paid utilities and then use the 50% rule.  That would leave you with $6,600 net per year or just under a 7 cap at that price.  

Hi Forrest,

Did you get your questions answered?  I'm also working on a deal on duplexes in S Tampa and my main concern is if rents are $600 for the area, then I may be better off purchasing duplexes in a different part of town. I can get the same rents or more and get the property cheaper. Then on the other hand, S Tampa is a desirable area and the appreciation will be better

Two reasons Gandy is a great divide....flood areas and history of MacDill base/port housing.

The historic Port of Tampa attracted a lot of the riff raff significant port areas typically attract (not really the case anymore as few ships come in and out of there now and definitely not sailors like there used to be 100 years ago...but homes were built and the culture initiated).  AND, there was significant affordable housing built to be close to the base.  The area has definitely improved.  You are seeing a lot of McMansions being built on the East side and tear downs on the West.  I would not worry about the residents as much any more as much of the area is definitively gentrifying.    I think it is becoming a really nice area, but personally, b/c it is the lowest lying area in Hillsborough county, I would be extra cautious. Like 75% of the land south of Gandy is in a Flood Zone..that coupled with  the density of affordable housing that still exists will continue to keep prices below typical South Tampa prices.  

@Eric Odum is everywhere along bayside typically in a flood zone as well in that area?

North of Gandy, Incline is pretty steep on the east side of the South Tampa peninsula....flood zone is usually only a block or two.  On the West Side, however, the gradient is pretty shallow.  A mile off of the bay and you can still be in a flood zone.  As a general rule, look for Manhattan to be the boundary on the West side.  Everything west of that north-south road is flood.  South of Gandy, throw those rules out.  There are pockets of flood zone throughout and you can be 10-12 blocks in-land from the east side and still be in the contiguous flood zone.  

You also have to take into consideration the school zones. There is a large demand for Plant high school over Robinson high school. The further south you go, the more you are catering to the military population and isolating your clients. 

I have a hard time investing where the flood ins is subsidized and at any time could sky rocket. if that is the case, there is very limited exit strategies. 

It should be noted that just because a house is in a flood zone, doesn't mean that flood insurance is required.  Zone X is technically a flood zone but doesn't require flood insurance.  I'd advise anyone to check the Hillsborough County flood zone map to gather accurate flood zone information.  A lot of misinformation on flood zone areas are being presented here.

I have been here since the great depression of 08' South of Gandy is not what is used to be. I think investing SOG is a great investment opportunity, the ghetto is being squeezed out. 

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