Real Estate Agents here? (Cape Coral, Fort Myers: rental homes, crime, appliances)

[nhkev]

investors for the most part have paid cash and at todays rental rates they are getting between 5-10% net cash flow. Many are foreclosed properties that are selling at distressed prices so almost immediately when they buy them there is a pretty signifigant appreciation. The trick is finding renters that pay and stay, just like everthing else people are undercutting each other to get the good renter. I would recommend using a property management company if you are thinking of going that way.

[faithfulFrank]

Interesting discussion.......very sad to read how it is there.

A good friend of mine owns 3 houses in Fort Myers......lives in one and rents out the other two. I remember visiting there about 2-3 years ago and he was telling me that if he sold them then he would "lose" too much......basing that not on what he paid for them years before, but of what he "could have" gotten for them during the "peak".

I tried to tell him that it was wrong to compare everything to that "peak". From what you all say, he now would probably get less now then he could have gotten for them 2-3 years ago.

I really have not spoken to him about it lately, so I do not know his desire or intentions concerning them. I'd guess he kept them this long he might as well keep them as long as they are at least breaking even......I suppose he will now wait for another "peak".........

We enjoyed our stay there...went to the Edison house and to the beach. I had a scary experience in a Walmart there on a Sunday night. My friend told me later that I was nuts going there on a Sunday night...(whatever that means). That is my only experience with the area......it is sad to read how distressed it now is.

Carry on.......Frank

[Compression]

Originally Posted by nhkev

The trick is finding renters that pay and stay, just like everthing else people are undercutting each other to get the good renter. I would recommend using a property management company if you are thinking of going that way.

Yep, finding them that pay and stay...getting tougher to do when unemployment numbers keep heading upward. I'm hoping as we approach October the numbers will head downward, at least slighty as some businesses put on some seasonal help. But the stress is really on getting a tenant to make it through an entire one year lease without some late, or totally missing rent payments.

As one friend of mine here, heavily involved, and very intimate with SW Florida rental property, both annual and seasonal, vacation rentals has told me. Most tenants are the folks that just got foreclosed on three blocks over. They game the landlord/tennat laws. Pay First and security deposit, then never make another payment. Let the landlord go thru the motions of getting them out, Then they just go do the same routine another couple of blocks up the road.

Your best tennants are the families with some kids in a school. But school choice allows the families to game that system as well. Where they reside isnt the most pressing issue.

Alot of folks I know, that are renting, have moved in with little to nothing in the way of credit checks, etc. The property management companies tell the landlord they are checking, but they have to be realistic. Just about anyone coming in to rent a property here today, will likely have a foreclosure, and maybe an eviction or two on a credit report. So why bother? If the prospective tennant has first and last for security, they can move in. When they cant pay two months later, the property manager just says..sorry about your luck, pay us for the service, and we'll start the eviction process. This IS repeated over and over here. Is it 100%, nope, but very common none the less.

Or course the flip side of the story is occurring quite often as well. Landlord gets a good paying tennant, then just pockets the money, and lets the house go into foreclosure. Just a few weeks ago, another friend of mine had a process server at the door, looking for his landlord. The landlord that was running for elected office in Lee county at this time last year, hasnt made a payment on the house since September of '08.

These are things I have seen, first hand, and occurring today in SW Florida. Persons that seem above reproach, running for public office. Bussiness men that have been here for years suddenly just rip everyone off, and head for the hills. I can tell you other stories of auto dealers, boat brokers, travel agents, mechanics, auto body shop operators. Sorry, I know you all think I'm just off on another "negative" rant, but I live here, and I see it first hand.

My point in all of this, while I'm certain not every property manager is gonna rip you off. Just use some common sense, they arent miracle workers, they have to bend a few things to get a tennant into your property, just like you would have to, doing it yourself.

[Swigchow]

Originally Posted by nhkev

Many are foreclosed properties that are selling at distressed prices so almost immediately when they buy them there is a pretty signifigant appreciation.

I am not sure if this is true. Quite often foreclosures have multiple offers driving up the price (at least in Las Vegas). There still may be many foreclosures in the pipeline, and even after clearing these up there seems to be significant inventory. Banks (again in Las Vegas) seems to be controlling the release of the foreclosures to maintain prices. Whats it like in this area?

[hiknapster]

Originally Posted by faithfulFrank

A good friend of mine owns 3 houses in Fort Myers......lives in one and rents out the other two. I remember visiting there about 2-3 years ago and he was telling me that if he sold them then he would "lose" too much......basing that not on what he paid for them years before, but of what he "could have" gotten for them during the "peak".

He was far from the only one. People couldn't get past "Harold" down the street who sold his house for x-amount of dollars. In the end, it made the crash that much worse.

[mrcoolmrcool28]

Get used to it sadly, I said "Psychotic" but your description works as well, Skip the post if you don't like it.


As for Franks post He is completely right! The housing market is like playing the stock market! You buy low and sell high, and the secrect is to hit those peaks. I have two brothers that are builders and play this game all the time, They will build a house as cheaply as possable (no CDW) and hold on to them till the price is right to sell, or just dump them for what they can get... It's huge gamble, but they been at it for 15 to 20 years so they must be making a living out of it.

If investers buy up cheap property in SWFL and the next boom comes (and it will) they will make money, if they can't wait it out or they get in too late as the market rises, then they may not. Rolling the dice, it's a gamble.

Frank's friend missed the peak, too bad, but as Frank said, he's really not out anything, just didn't make big money selling those houses during the peak of the boom.

[121804]

Originally Posted by nhkev

The trick is finding renters that pay and stay, just like everthing else people are undercutting each other to get the good renter.

I would think this is the major challenge of any owner, especially those who live out of state. When we rented, we specifically would NOT use an owner who lived out of state. Our landlord in PG lived down the street. It was just nice to know that the owner, who was overall responsible, was THERE and that the owner could view the property; talk to the renters, etc on a regular basis. The first week the refrig broke, fire ants made there way into the condo & the a/c broke in August...we had more problems in that unit, which was brand spanking new, then all the falling apart military bases we lived on...and our landlord was right there to assist. That, in turn, made us want to take care of the unit (though that's just our mentality anyway..leave it nicer than we found it).

Unfortunately, she has lost a tremendous amount of money & when I spoke to her about the CDW issue, she said that relying on snowbirds/tourists was too stressful. It's a guarantee for the moment (2 weeks or 2 months), but its not a long term guarantee.

[121804]

Originally Posted by faithfulFrank

We enjoyed our stay there...went to the Edison house and to the beach. I had a scary experience in a Walmart there on a Sunday night. My friend told me later that I was nuts going there on a Sunday night...(whatever that means). That is my only experience with the area......it is sad to read how distressed it now is.

Carry on.......Frank

That's the draw. FM is a nice weekend visit. You can see most of it in a day.

As for the WalMart, I had to laugh b/c there was a WalMart in the area (I believe off of McGregor) that we turned around even before going in. There was some sort of "gathering" near the entrance and way too many people literally just hanging out in the parking lot drinking beer, smoking and sitting on their car trunks.

You do have to be careful in certain areas of FM both day & night. Just like any beach town, it has the regulars who can spot a nonregular and spot that nonregular for the wrong reason.

[SoFLGal]

It is pretty tough to keep renters right now. I have a few rentals in the Port Charlotte area. Unfortunately, I bought when the prices were still much higher so I have my mortgage payment that's quite a bit higher than many of the owners up and down the street. That let's them under cut my prices. I know that's happening right now with a lot of people. Many just give up and let the property go into foreclosure or try to short sale it.

Many of the little old General Development homes are going for in the low $20K. Those you can usually turn a profit on. But just when I think they can't go any lower the prices drop again.

Also in Port Charlotte specifically, you can't really rent them out on the vacation market because you're farther than 25 minutes from the beach. So, you pretty much have to go for the year 'round tenant, if you can find one.

Everyone on this thread has been making some excellent points. Yachtcare, the school district is a huge draw for renters and they often pick one place over another due to the school district. And 121804, I totally agree with your point about having the landlord close by is usually a big advantage. I think it does however depend on the individual person/landlord. If they are going to be irresponsible with their property they probably would be that way if they were in or out of town. Many of the investors we are seeing are coming from Canada. Most appear to be responsible people but again they are out of the area.

The other issue is jobs. Unless your renter is retired then it's very difficult to secure employment right now. There's also a lot of competition out the for the same jobs.

Pretty informative thread with a lot of good information all around.

[Compression]

Originally Posted by SoFLGal

Yachtcare, the school district is a huge draw for renters and they often pick one place over another due to the school district.

I have no doubt that is the case in most places.( I was a Realtor, once upon a time, for 8 years, in MI) And I am completly unfamiliar with how the school system in Charlotte County operates.

Here in Cape Coral, they have that "school choice" deal going on. Once the kids are in the school for the year, they stay there, regardless of a move in residence being made. I believe a notice of address change is the only requirement by the school system. But most that move during the school year dont even bother with that(near as I can tell)

So it just tends to make it easier for a family with children to "unit hop" around the city.