All Forum Posts by: Caroline C.

@John Tran TK is just a shortcut way to buy a house - sometimes it works out well and sometimes it doesn't. Since there are many providers in many markets, it is impossible to make a blanket statement. Fact is, no matter how you buy a house, you need to do the due diligence (on the property, on your partner, on your PM, etc). The question about 'credible' is more a question about the provider you think you might go with, and that is part of the due diligence before you close the deal. 

@Jonathon Nila of course it depends on your personal needs and goals - we looked into it and decided not to, invested in Costa Rica instead. Political climate not the best, currency not necessarily reliable (fluctuates quite a bit over time), concerned about over-development, and for us we'd be doing short term rental when not using the condo ourselves, and the nightly rates are on the low side so might not be worth it once you factor in the expense. Also, one of the things we learned when we were over there looking at places is that you must also open a local bank account to transact business.

@Krysta Bonner I have a property in that area and have been using Centerbeam for several years and been very happy. You should check them out. I know they manage several in the area.

Regarding questions to ask PM's, there are many, but here are the categories you should hit and some questions from each:

- about their business (how long in business, how many staff, what roles)

- about their properties (how many properties under management, typical rent range for them, their vacancy rate)

- about their fees (property management, tenant placement, tenant renewals, inspections, etc)

- about tenant screening (in house?, screening factors, how many past landlords do they contact, does owner have input to process?)

- about collecting rent (when is it late, late fees, eviction process, how many do they do per year)

- about maintenance (in house or outside contractors, how do you communicate with owner)

- about trasacting with owner (what online system do they use, when in the month do they pay owner, direct deposit?)  

Also, sometimes PM's will have 1-year contracts, but you want to have the ability to cancel sooner if you are unhappy. Ideally, 30 day notice at any time with no early termination fee - particularly in first year.

Good luck!

@Reese Peterson Jax is a growing metro, significantly. That will only continue with people looking to move out of the more crowded cities. I'm sure there are several of them around the US, but it is one of the ideal places for someone looking to move who wants to work 100% remote - relatively low home/rent prices, no state income tax, nice weather, good traffic/road infrastructure, access to the beach, plenty of arts and activities, etc.

The risk is in the property you choose to invest in, not the market you choose. You can get burned in any market, and be successful in any market.

@Lesley Resnick it's not exactly something with a finish line. Nor is there one path (ie: you can do it without driving a '98 Oldsmobile). We continue to focus on building up our income streams, and dreaming of the travel we will do when borders start to open up again. No plans to go back to 'traditional employment'

@Daniel Z Fang Honestly, the pricetag is pretty typical for these kinds of turnovers, but to me the scope seems like a copy/paste. How many missing/broken blinds are there. How many missing doorknobs are there. Paint should have a general quote amount and a scope to it and then those items can come out of the list. Same for cleaning - should be an amount for deep clean house and all the little 'clean' items can be removed. How many windows don't open/shut property - they should know that already and cost should be based on how many and the nature of the repair. The estimate seems very detailed, but to me it also seems very lazy.

@Amol Kulkarni  You should visit and look at potential deals in both, and assess for yourself which you are more comfortable with, and in which place you feel you have better on the ground partners. You can make or lose money in both markets, so the choice isn't so much the market, but your partners and the particular deals.

The soil in Florida is very sandy, so you need to make sure septic systems (if applicable) are in good shape and look for issues with the structure or foundation that might indicate shifting/sinkholes. One of the properties I bought in Jax ending up having a septic drainfield issue probably due to something heavy (like a car) compressing it over time - we found that during inspection and the seller was able to address it before closing.

Once your TK house is purchased, the fact that you bought it TK does not matter, since TK is simply a shortcut way of buying a property - yes you pay a premium for that and so it would be factored in. You need to approach exit strategy the same way you'd do it for any other property: purchase price vs appraised value, location/market, renters vs homeowners in neighborhood, appreciation potential, schools, etc.

For myself, after a change in investment direction/priority, last year I was able to sell 5 properties originally purchased via TK. Our PM manages for a large number of other SFH investors and was able to find a buyer for the portfolio in their network. Since our sale was within 2-4 years of the properties purchased, the closing costs on both ends really ate up our profits. Your exit strategy can suffer regardless of how you buy if you don't hold long term.

I own a house on a double lot and also 2 condos. The good news is that it is relatively easy for foreigners to own land or property, and there are plenty of expats there locally who can help you out. Also, a large amount of the land in the country is protected, and so there generally should be less development than other countries, making land more valuable. However, there is still lots of available land to purchase, and plenty of high end developments selling lots to people so that they might one day build on it. Hard to say if that is a good investment or not, especially now given COVID-19. Depends on whether you'd eventually flip the land, or build something to sell, or as a rental. Very hard to make the numbers work for long term rentals given the price to buy/build vs monthly rental. Also, it can be very hard to manage construction projects there long distance, and it can take a long time to build. So a better investment might be to buy something already built out.

Things to be cautious about - there are many micro-climates in the country, and many remote areas where the roads are not good. So, you really need to understand the location, how rainy it can be (the southern zone has a longer rainy season than other parts), how remote it is, and what the roads and other infrastructure is like. My husband and I opted to buy in the beach areas of Guanacaste, after visiting both regions, because we thought the remoteness and longer wet season in the southern zone would make a house harder to rent, and also shorten the ideal times of year for us to visit. But at the same time, some people love the remoteness in the southern zone, and some of the areas are quite nice and thriving.