Florida Keys Investment opportunities

With all the abundant recreational opportunities mixed in with a great climate the Keys attract people...lots of people.
Tourists in turn need places to stay and people relocating need places to rent either part time or while they close on a home or find an apartment. The Keys are definitely a happening place.
Types of Investments

Aside from commercial investments the two situations most people are looking for in Florida are
• Vacation homes or Condos that can be rented out … Generally a purchase involves a 1031 tax exchange or just someone looking for a second home in an area that he/she or the family will use occasionally.
• A person looking for a home to eventually retire to and rent out in the meantime to help pay the mortgage.
• The best areas to rent are anywhere near the water and the best rents will start at open water locations, followed by homes/condos with a partial view to homes on canals. The neighborhood and the furnishings will also dictate the rent amounts you can get. In the Keys-the best situation was a home at least three bedrooms and up on the Ocean or Gulf with a pool and a boat dock. In some cases these bring as much as $5000.00 per week, depending on the home/area.
• It is very important that you find out early on which residential areas and which condo associations allow weekly rentals-as this will be generally be your best return.
• In some cases you may want to just rent out long term and skip the dealings with handy men and cleaning services.
• In all of this—the most important thing is that you find a qualified agent. He/she can guide you through the process completely—including setting up property management.

As to The Keys and it’s areas-where would the best rentals probably be located?
• *A condo or single family home anywhere on the water-either Ocean or Gulf or a canal  and anywhere in the Keys (unless they prohibit vacation rentals. (see below)
• *The rental rates will vary from island to island due to boating depth and neighborhoods, See information below,
• *Key West downtown is seeing strong growth. In short some people are going away from life in the suburbs and opting for closeness to theatre, restaurants and the vitality of a city environment. So, don’t overlook the downtown areas.

Renting your home out as a seasonal (vacation rental)or long term.
Long-term renters are generally easier to find as there is a shortage of homes for rent. So, if you want to buy something for retirement or a vacation home and rent it out to help your payments-this is typically the easiest way. (Long term rentals are considered to be anything over 6 months, as the tenants don't pay the 11.5% Florida tax)

Generally long-term rentals should be unfurnished.

Initially your agent’s company will do a credit check before submitting a lease to you, then with your approval of the lease, they typically collect the first and last months rent plus a security deposit which is typically a months rental amount.

As to utilities-
The tenants generally take the lease to the water, electric, phone and cable people and have the utilities put in their name and of course they pay their own deposits. In most areas of Florida, garbage is included in the tax bill-so there is no separate garbage bill.
• Seasonal rentals.
Most residential areas can only rent monthly or 28 days, meaning the owner can only rent the home out 12 times per year. This means about 5 months of income-Jan-Feb-Mar and July-August. There are some April and June monthlies.
• *Ask your REALTOR if there are any Condos or areas that do allow weekly rentals as this will definitely be your best return.
• As to what is the best rental situation, that is size, which areas, views, pools, how water and boating accessibility affects rental amounts and the typical rental amounts for both long and short term, plus the fees involved, ask your agent.
• As to extra costs and what is necessary to have a Home as a Rental.
• When you rent your home out you generally need to license it through the County. This costs is typically minimal and your agent’s company should be able to handle the paperwork for you.
• The County and the Tax people want the homes licensed so they know where there may be tax dollars coming in. When your home is used as a rental, in effect you are operating the same as a hotel or motel and so they come under their safety guidelines.
• This applies to the Keys but may be the cases statewide:
• Every bedroom and the main living area must have a hardwired smoke detector and there must also be an escape light. This light comes on in case of a power outage-this also must be hardwired. (About $450.00 installed smoke detectors and escape light for a 2/2)
• There also needs to be a professional quality refillable fire extinguisher that is approved by the fire department (about $55.00). This would be the same as you'd find in a restaurant or hotel room. There needs to be a dead bolt on the door that works from the inside and is a different key than the main door. All of these issues help protect your liability in cases of fire/break in.
• When the home complies with all of the above and your agent has a signed contract from you authorizing them as a rental agent, then it can go into the rental pool.

What about Hurricane preparation?

In the event of an impending Hurricane, a handyman or someone else can be hired to put up the storm shutters, bring in the lawn and patio furniture, etc for a fee-most agents have too many homes for them to do it individually.

*This agreement should be set up in advance by the homeowner and the handyman. Your agent can find someone to do this.

What makes a good Vacation Rental
• A clean, well-maintained home on a canal or open water.
• Typically one of the bedrooms should have a set of twin beds if the renters are bringing children.
• Good linens and towels and a backup set. This is especially important for monthly renters.
• The washer, dryer and refrigerator should be newer if possible.
• A good Television hooked up to cable (about $35.00 per month) and a CD or tape stereo system.
• The kitchen must be completely outfitted. A microwave is also very important for renters.
• Patio and/or Lawn-Deck furniture. If there is an upper deck, a table and chairs plus loungers.
• On the waterside, a set of loungers and chairs.

Repeat renters

If the renters have a good experience, they will come back. We see this especially with people that book two to three months a year.

Be sure to check on the Rental laws-what is going on in your area now and what is proposed? These can vary dramatically based on the area.

Always ask your agent!!!!

*For commercial investments, ROI stats and triple net opportunities go to 1031