Posted on Monday, January 02, 2012
It seems like the rental market is doing well in Florida these days and with historically low property values a few investors are eyeballing the market for acquisitions. Late last summer we helped a customer look for annual – not seasonal – rentals and to our surprise annual rentals were very difficult to find. Over the same period we helped a customer look for targeted property to purchase and rent which worked out well for our customer as one property had a renter interested before closing. We stated thinking this rental market has annual scarcity – a good thing for prices.
We are seeing several reasons for interest in Naples rental property. First, some folks would like to be here seasonally but they have not sold their place up north or they simply cannot afford to buy a second home here. Others are new to Naples and would like to rent in an area or two before committing to a purchase. Some are reluctant to buy due to the tough real estate market of recent years – even in the face of improved numbers.
The Naples rental market seems consistent with a favorable state wide rental real estate trend. According to the Orlando Business Journal 12/29/11 “… five Florida cities named as best markets in which to invest in rental property, according to a quarterly ranking of 100 U.S. markets. Daytona Beach came in at No. 2 on the list, Orlando No. 4, Fort Myers No. 5, Fort Lauderdale No. 8 and Tampa No. 9. ‘We think Florida is one of the most interesting states in terms of rental property opportunities,’ said Ingo Winzer, president and founder of Local Market Monitor Inc. That’s because home prices haven’t bottomed out, and rents will eventually be supported by renewed population growth.’
We always advise caution in real estate rentals if you are new to this market. With rental income comes rental expense – not only taxes and mortgage interest and home upkeep, but customer service. When the hot water heater breaks you will get the phone call from your renter. Sure you can sign up for home warranty programs which may arrange to take problem calls off your hands but still plan to spend time with your renters. Finding new renters, collecting rents, and a variety of interventions are sometimes required. Rental real estate is not a passive investment and not always for the faint of heart.
The good news for all types of Naples real estate owners is the renter-investor is helping to reduce inventory and the principle of supply and demand will likely allow further price support in a strengthening market. The rental fad could continue to place a nice foundation under this real estate market of ours.
Enjoy the observed holiday today and those bowl games or find other ways to enjoy the beginning of the new year.
No legal or investment advice or suggestions are being given in this Blog. Actual real estate price and sales results are subject to market forces and are not completely predictable. Please consult a lawyer or investment advisor for such legal and investment advice. The writings of this Blog are intended for the sole use of our clients.
Mark Goebel, PA is a REALTOR with Coldwell Banker on 5th avenue in Naples, Florida with 35+ years of visiting and living in Naples. After 25 years at Accenture, Mark retired as a managing director and spends his time helping non profits and building a Naples real estate team with his wife Nan. Talk to Mark and Nan about life in Naples and why they chose this place to live full-time over all others and enjoy Naples real estate.
Mark Goebel, PA
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