4 Things To Consider When Investing in A Rental Property

So you are looking to invest in a piece of rental property and the thought of that supplemental income sounds like it could really help out.  You buy a house, rent it out and someone else pays your mortgage and make a little extra.  Then after 15buying a rental property in florida or 20 years you have a paid for rental property that your renters paid off for you over the years.  The house has appreciated nicely so now your investment is worth 20-30% more then what you originally paid!  That’s what most people think of when they consider buying a rental property, however, it is not always that simple. Here are three things you should consider when looking to invest in a rental property:

1. Location – This must be considered as you are deciding the caliber of houses and tenants you are considering to rent to.  Keep in mind anyone can be late or delinquent on rent but it will be important not to purchase a highly expensive home in a very middle class neighborhood, nine times out of ten you won’t be able to get the amount of rent you are looking for to cover the expenses.  Also consider how far is it from your residence?  If you are planning on managing the property yourself it may not be the best idea to be the landlord if you live in another city state because if you can’t drive by on any given afternoon you to check up on everything or get there quickly to fix minor problems you are going to have to pay someone to do these things which could eat away at your profits.

2. Investment potential – Of course you want to charge as much money as you can for rent each month to to cover the mortgage and make a decent profit.  This equation seems easy enough but you need to investigate on a few things before you go off buying something cheap and trying to rent it for a ton of money.  Is there any rental history?  What are the properties expenses for insurance and taxes?  What are the home’s previous values?  Has anything major been replaced or repaired?  Is there an HOA? If so what are the HOA fees and how involved do they get in the yard upkeep and house conditions?  These questions will help you get a better idea of what you are in for and if there will be enough money at the end of the month to make it worth your while.

3. Upkeep – Okay you understand that if you buy a house with an old roof you will have to replace it at some point but what if you look at it a little deeper.  Try to consider the ongoing maintenance the property will need.  Think about how the landscaping is set up, are there hundreds of feet of fancy shrubs, landscape lighting, gardens? Is there a pool? All of these things cost money on an ongoing basis to keep functioning properly and looking nice. And these expenses aren’t just limited to the exterior of the house, the inside of the house is a whole other story. Wood floors can be damaged easily, walls can be scuffed up, carpets can get stained. Of course you have deposits that will cover some of these things but have to be prepared for the extra work and the headaches these issues cause.

4. Unexpected expenses – Lastly, it is extremely important that you factor in the costs of unexpected expenses. You never know when the A/C will break or when a pipe will burst and when something like this does happen it can be very expensive. Many people just hope for the best and pray nothing like this will happen to their rental property but this is a poor strategy. You need to plan ahead and make sure you have money budgeted and stored away for any unexpected expenses. This means planning a little more carefully and maybe taking a little bit of the rent you collect each month and putting it into and emergency fund. Also, you can reduce the risk of something like this happening by doing routine maintenance on all important and expensive items. Doing this may cost a little money upfront but could end up saving you in the long run.

These are just a few things to keep in mind when considering making an investment in a rental property. However, don’t let these things scare you away from buying a rental property because real estate is one of the greatest investments you can make but you just need to do it wisely.  Hopefully, you can take this information we provided you and use it to better prepare yourself for a successful rental investment.

If you are looking to by property in Florida make sure to take a look at the MoveMap on www.MoversAtlas.com to get detailed information on the neighborhoods, communities, and cities you are looking to buy real estate in!

5 Awesome Tips for Buying a Home at Auction

When looking to buy a home many people want to buy a home that is 100% finished and needs little or no additional work or upgrades. These homes can be found but it goes back to the old saying “you get what you pay for” – you are going to florida real estate auctionspay a lot more for a house that is completely upgraded.  Other opportunities for a better deal come in the form short sales, foreclosures, and auctions.  Some of the best deals may be hidden behind some ugly paint, poor landscaping and a little disrepair.  Purchasing a house at an auction is not for everyone, but a little research could turn out to be very profitable.  The following items are top things to consider when looking to purchase a home at an auction.

1. Dry runbeing a novice at anything would require you to take things slow and do a little more research the first couple of times.  My first suggestion would be to visit an auction as just a spectator the first time or two.  The best thing you can do is look and listen, understand the pace in which the auction operates and what everyone else is looking for and saying.  Things like presentation and attire can be the difference of someone attempting to out bid you or taking a knee.

2. House research- normally you would do research on any place you purchase but with a foreclosure there may not be too much information available.  Items like the surrounding neighborhood and homes structural integrity could be a make or break if you are looking to sell the home as an investment.  Some foreclosures will have an open house and many others may not, your best chance of finding out the homes issues is to walk around as much as you can even looking inside the windows and bringing a contractor with good knowledge. Keep in mind the neighbors may not know anything about the homes history but many times what the home looks like on the outside is what it will look like on the inside.

3. Timing- too many times people get excited about one home and believe its all or nothing.  Timing is everything, especially during an auction.  Best advice is to sit back and wait till the offers slow down and be willing to walk away.  The idea of letting the pace slow down is to not add fuel to the fire.  The thought behind being willing to walk away is self explanatory, after being to a few auctions you will see yourself that not every auction home is a good deal.

4. Actual costs- there are other costs involved in an auction purchase, some larger auctioneer companies charge up to 5% for their services right off the top of the final purchase price.  Other cost (besides the unknowns of the house) could include back taxes, liens or other mortgages.  Your due diligence could save you thousands and chances are if the deal seems to good to be true, there maybe an underlining reason for it.

5. Early bird- during the day of the auction there maybe a handful of homes being sold, this has an impact of the crowd that may show and how aggressive the bidders are during the first part of the day.  Chances are some may not show until later and only for one particular home they had their sights on. One suggestion I have is to get there early and be prepared to bid, there could be an opportunity to jump on one of the early homes and get a steal all while the others are still trying to gauge the aggressiveness nature of the bidding crowd.

No matter what investment you are looking for it will always be important to do your research and learn how to play hardball.  Be aware of what you are getting yourself into and keep an open mind.  Real estate always has potential to make money in any market but the key is to make informed decisions and using home buying tools like the MoveMap on www.moversatlas.com is a great way to gather information on a potential home.

The 5 Fastest Growing Cities in Florida

Whether you like living in a highly populated city or not, it is no secret that larger cities often times have a lot more to offer. In regards to economic growth of a particular area there is a direct correlation between the growth rate of a city and floridas fastest growing citiessuch things as higher employment rates and better housing markets among many other positive benefits. The nice thing about population growth in a particular area is the hidden driving factors like a new industry or large business moving in or it may be just a desirable cost effective area to live.  Whatever the reason is, just remember that if you want to benefit from a booming city than the earlier you jump on board the better.  Florida has many great cities but here is a list of 5 of Florida’s fastest growing cities.

1. Orlando

First and foremost and probably the largest city in the state, Orlando, known by the locals as “The city beautiful” with a population growth rate of 1.82% and a fantastic unemployment rate of 5.76% which is several points below the national average.

2. Cape Coral

Second is a smaller town of Cape Coral which is direct neighbors to the more well-known town Fort Myers.  The population growth rate of Cape Coral is currently around 2.41% and yet still a low unemployment rate of 6.22%.  Surprisingly this city was one of the hardest hit during the economic housing fall, good to see its coming back.

3. Palm Bay

Next we are brought to Palm Bay, Florida, while on the east coast this is a great beach city having a population increase of around 1.53% and an unemployment rate at 6.6%.  The average income in this town is right above $60,000 which could be greatly supported by such companies like NASA, Boeing, Lockheed Martin and soon to be Northrop Grumman.

4. North Port

Coming in at number four would be North Port, Florida a location that piggy backs the more well-known metropolitan area Sarasota.  North Port is in a wonderful area on the west coast with white sand beaches, turquoise colored water and beautiful sunsets.  This town has boasted a 1.42% population growth rate along with a 6% unemployment rate.

5. Windermere

Back to the intercostal geographic area, this small town in Orange County Florida known for its rather large houses and the Arnold Palmer golf tournament Windermere makes the ranking at number five.  With about a 29% population growth since the year 2000 this has been a substantial increase even according the national level.  More known for its original basketball super star Shaquille O’Neal and golf legend Tiger Woods there is no question this is a very desirable city to live in.

Sure, getting on board with a city that is up and coming has its benefits but it wouldn’t be your first priority unless you were looking for purely investment purposes.  On the other hand you may be in a community that is growing with excellent supporting industry and opportunity.  If you are looking for more information on these communities I suggest using the tools offered on www.MoversAtlas.com.