On-site management costs can run between 15-40% of gross monthly rent. Property
management companies are in a highly competitive part of the real estate industry, so
interview several companies and you may be able to negotiate very favorable fees.
I recommend All-County Property Management for your investment condo needs. I do not get
a referral fee from them. I recommend them because happy clients with rented property, buy
more property through me as their buyer's agent.
When you purchase a condo or a home in a deed-restricted community, the
condo/homeowners association charges you an application fee and runs a background
check. When you rent the property, the association will charge your prospective tenant an
application fee and run a background check on them as well. The fee is then paid by your
prospective tenant. Your property management company should be able to coordinate this
with the condo association on your behalf.
When interviewing property management companies, here are some helpful questions to ask:
- If you are unhappy with their service, can you cancel your agreement without penalty?
- Can you advertise your own property yourself?
- If you as the owner finds a tenant who passes a background check, do you get a discount?
- If a tenant breaks a lease, are you as the owner responsible for the additional marketing fees of
finding a replacement tenant?
Single family homes are in higher demand among renters. They also appreciate faster than
condos. I strongly advise long distance investors to reconsider their preference for condos
because of perceived lower maintenance issues. Insurance regulations, building code
changes, and increased administration costs will contribute to higher monthly association
fees for condos/townhomes/villas in the near future.
At this time in our market, an older, renovated home in a non-deed restricted neighborhood
is, in my opinion, your best option for realizing maximum cash flow and future price
appreciation. Quality homes in our area are constructed of concrete block. An older concrete
block home with updated interior, is as good as a newer home with major systems of the
same age in the eyes of a potential tenant.
A home warranty can alleviate many concerns about property maintenance for a long
distance investor, whether single family home or condo.
Condos present a choice between short term vacation rental units (usually found on Siesta
Key, Lido, or Longboat Key), or condos with a more traditional lease policy for annual tenants.
Short term vacation rentals usually have on-site management, which markets the property
and operates it more like a hotel. They will handle payment of your condo association fees,
maintenance, and utilities, and send you a check each month minus expenses and their
The Sarasota real estate market hit bottom in the fall of 2011. You could go elsewhere in
Florida for a "better deal", but the entire state is entering the early stages of a seller's market,
with low inventory and higher demand. Read more about this here on my blog.
The Sarasota area has always been higher priced compared to other Florida cities because
of higher demand. The area was one of the first real estate markets in Florida to emerge from
the 2008 downturn. History shows Sarasota will not only attract high quality tenants for your
future investment property, it will appreciate faster over a 5 to 10 year period.
Like most Florida cities, our busiest real estate sales season is during the winter months.
We have a secondary sales period during the summer months, when winter visitors who
looked at properties come back to purchase.
For Canadian buyers, in case you missed it elsewhere on my site, you do not need to
register at a seminar to buy Florida real estate! Please read my blog on how these real
estate seminars are highly misleading to the Canadian buying public.
Vacation rental units on the Keys can vary significantly in price, rental rates, lease period and
management expense. For these reasons, here I have concentrated on newer 2/2 or 3/2
condos and townhome communities, listed below, that will be attractive to an annual tenant.
There are tremendous opportunities for investing in short term rental properties on Anna
Maria Island and Siesta Key at price points starting around $175,000. Please feel free contact
me to discuss the interesting alternatives to entry-level condos.
Townhomes Lighthouse Cove
Plaza de Flores
Palma Sola Trace
Cape Haze Resort
Village at Townpark
Single Family Neighborhoods
Key Features or Selling Point
Resort feel, 20-25 minutes to beaches
3/2 two-story townhomes near schools and I-75
Popular Lakewood Ranch, 2/2 two-story townhomes
Central Manatee County location
Nice pool and clubhouse, Palmer Ranch location
Resort feel, Palmer Ranch location, near Siesta Key
Two-story townhomes with attached garage
Central Sarasota location
Water views, pool, open floor plan
Built in 2007, minutes to Anna Maria beaches, garage
Resort style community, bike or walk to beaches
Townhomes built in 2005, good location
Lakewood Ranch, no CDD fee, water views
Close to Siesta Key and downtown Sarasota
Close to Siesta Key
Beach access via private ferry
Close to downtown Sarasota, Lido Key, airport
Close to Anna Maria beaches
|Preferred property management
with competitive fees and online
tools for owners and tenants
Technically defined, the cap rate is Net Operating Income (NOI) divided by the current market
value. It is most frequently used as a method to determine the current value of a real estate
commercial real estate, where a comparable value analysis is more difficult, especially with
multi-family dwellings or apartment buildings.
Cap rates are rarely used to determine values for residentail real estate investments.
Investors should be careful using cap rates in residential real estate as a comparison to bank
interest rates in an opportunity cost analysis, because cap rates do not take projected
property appreciation/depreciation into consideration at the time of purchase.
I could find no published data about residential real estate cap rates nationally, in FL, or for
our local market. All of the data deals with commercial real estate and multi-family. That said,
nationally, apartment cap rates are in the 6% range and are predicted to decrease in the near
term. Applying basic economic principals to our local residential real estate market, now is
the time to buy, as increased buyer demand among decreased property inventory will push
sales prices higher.
make an offer
price stats and trends
Given that the properties you are going to be considering are anywhere from one third to one
half the previous sales price at the height of the market, are you comfortable spending $5,000
to replace flooring? Are you willing to spend $1000 for paint and cleaning? Are you prepared
to possibly replace missing appliances? If the pool water is green, are you going to have a
hard time imagining it clean? Is a spouse, another family member, or friend who is also an
"investor" going to say it's too dirty, not pretty enough, or they wouldn't live there?
As your trusted local real estate expert, my professional team and I am prepared to turn any
potential "no" to a confident "yes".