Written by Mike Slatton, Marketing Director for BTGH
In 2000, my wife and I bought an old home in St. Cloud, Florida – a little town outside of Orlando. We were told it was about 100 years old and the price was $75k. We took a look around and liked it.
“We’ll take it.”
On the day of the closing, all we knew is that we were buying an approximately 100 year old house with 2 bedrooms, 1 bathroom, a tin roof and hardwood floors for $75,000. No one seemed to know anything more, but there seemed to be so much more to know about the house. After all, there had been 100 years of occupants in this house. Certainly, there was SOME historic value to it.
I investigated, and what I learned was truly exciting.
COUNTY RECORDS
The first place I started was the county records department. I learned that the house and garage straddled 3 long, narrow lots, with the house built on lots 1 & 2, and the garage straddling lots 2 & 3. I also learned that all 3 of those lots came together under the same ownership in 1916, purchased from The Seminole Land and Investment Company.
“In 1909, The Seminole Land and Investment Company took over title to 35,000 acres of land (St. Cloud Plantation), a portion of which became the City of St. Cloud and its suburbs.
“On April 16, 1909, the Kissimmee Valley Gazette announced the “New Town of St. Cloud,” a “Soldiers Colony” that was to be located near Kissimmee. The newspaper called the purchase by the Seminole Land and Investment Company “one of the most important real estate deals ever made in the State of Florida.” It was reported that the officers of the company had searched all over Florida for the perfect site for a veterans’ colony, particularly one especially suited for “health, climate, and productiveness of the soil.” William G. King, an estate manager in Alachua Co. before becoming the first permanent resident of St. Cloud, was chosen by the National Tribune to “plan, locate and develop a town site for a colony of Veterans of the Civil War. He consulted with the Hon. William Makinson of Kissimmee, then local manager for SLICO, who placed the entire management of the new colony of St. Cloud in the hands of Mr. King” in April 1909.”
So my home was once owned by an old soldier from the Civil War. Wow!
ARCHITECTURE
More investigating revealed that the house was a Natoma model Craftsman house that you could buy already cut and fitted in 1915 for just $266.
In the 1940’s, a local cement contractor, who was also a city councilman of St. Cloud, poured the driveway (probably just before the garage was built). I learned this from the etching of his name and date into the concrete itself. That little marking turned out to be a great conversation pieceover the years.
RECOGNITION
With all of this information, I was then able to apply for and receive a plaque from the St. Cloud Main Street Historical Preservation program, verifying the historical relevance of the house.
WHY
So why would ANYONE go through all of this trouble? Personally, I like finding the value where other’s see little. On the other hand, intrinsic value can turn into dollar value very quickly. It’s the same as adding a little polo player to a knit shirt.
Also, knowing the history of a house and it’s relevance to the community it’s in makes for great conversation while you’re selling it.
After all, a house is more than just a place to store your stuff and lay your head. It’s a monumentto the community; It’s a shrine to it’s inhabitants; It’s a piece of history that’s important to those who built it, were born in it, grew up in it, and died in it.
Mike Slatton is a Web Developer and Marketing Director for Bay To Gulf Holdings, as well as Chief Editor ofThe Soccer Mom Manual – A magazine style resource for parents of young soccer players.
Tampa is in the middle of the state, part of Central Florida, sitting on the Gulf Coast. It’s metropolitan amenities, beautiful weather and proximity to tourist attractions make it a great place to live. The cost of the houses in Tampa Bay also makes it the best place to buy rental houses and other investment properties.
CNN Money, MSN Money, Forbes , Bankrate.com and AOL Money all have their own lists of best places to buy rentals, but the one state they all have in common is FLORIDA.
Last year, Graham Wood wrote an article detailing how foreign investors are buying Florida real estate SITE UNSEEN. While that trend has eased a lot, the deals that drove such care free investing have not.
Part of Central Florida, Orlando is just 90 minutes East of Tampa
ORLANDO
With rents that have barely risen at all in the last 2 years, Orlando, Fla., is still the most magical place on Earth.
Tourism continues to bolster Orlando’s business and has helped drop the unemployment rate from 11% a 4 years ago to 6.3% today, which is well above the national average. With those kinds of numbers, rentals are easy to fill, even if rents aren’t increasing much.
Florida has plenty of great real estate investment deals left, and Tampa is the hotbed of most of those deals.
On the east coast of Florida, Jacksonville is a great North Florida investment
JACKSONVILLE
Jacksonville, Fla.’s, average rent is up only 1.3% over the last year, and it’s labor and housing market was hammered by the recession. Median housing prices dropped from $174,600 in 2008 to $120,800 today and fell 2.5% in the past year alone. Unemployment has made new buyers a bit scarce as well, with the unemployment rate climbing as high as 11.2% last March before coming back down to 9.7%.
Jacksonville has a fairly stable economic base as home to the third-largest military presence in the country. A submarine base, naval air station, naval station and Marine base provide stability, while rent prices have risen in the past year to help stabilize the rental market even more.
Located almost directly between Orlando and Tampa, Lakeland is more than a suburb.
LAKELAND
RealtyTrac Vice President Daren Blomquist says Florida’s seesawing housing market — which boomed in the early 2000s, then went bust around 2007 — hit Tampa so hard that the downturn spilled over to Lakeland, a 590,000-population metro area located almost directly between Orlando (56 miles) and Tampa (51 miles).
“A lot of times, ‘exurban’ communities around a really hot area are very affected by a boom and bust,” he says. “There’s a lot of home-building in such places during the boom, but then there’s an oversupply of houses when the bust hits.”
As a result, Lakeland — best known as the Detroit Tigers’ spring-training home — saw foreclosure filings rise 95.7% during 2012.
Melbourne Beach is host to some of Florida’s best surfing
PALM BAY/MELBOURNE/TITUSVILLE
2.5 hours due east from Tampa, this metro area along the Atlantic coast is home to the Kennedy Space Center — which is fitting, because its market soared toward the moon during the housing boom, then fell back to Earth in the bust.
“You have still some leftover wreckage from the housing bubble — bad loans, a slow foreclosure process and lots of people who are ‘underwater,’” Blomquist says.
The Kennedy Space center has also cut thousands of jobs in the past couple of years or so after the space-shuttle program’s termination, adding to the 540,000-population area’s problems. “A soft underlying job market only aggravates [the Palm Bay region’s] foreclosure problems,” Blomquist says.
In 2007, Gainesville, Florida was voted the best place to live and play in the United States
GAINESVILLE
With a student body of roughly 50,000 students, and located just 2 hours from Tampa, the University of Florida provides a steady clientele for landlords big and small.
Even though the area has recovered from the housing meltdown, there are still plenty of bargains to be found. Combine that with fairly high rents, and the math for investors is pretty favorable.
The Gainesville-area market, in particular, has been attracting a lot of doctors, attorneys, accountants and other professionals looking to diversify their investment portfolios, according to real estate broker Jay Parrish. There are also parents buying places for their kids who are attending the university.
THE MEANING OF ALL THIS…
Tampa is in the middle of the best real estate markets in the state. That makes the Tampa Bay real estate market the perfect place to buy investment properties to sell or rent.
It’s a thing: Elbow Grease Real Estate Investing is when you build equity in property more through effort, than money. It is also called DIY equity. It’s how most people who are new to real estate investing get started: Rather than hire contractors who will bill you a MINIMUM of $50 per hour to do repairs or build-outs, you just build out that new kitchen or replace that garage door yourself.
The only question to elbow grease investing is where to buy the materials.
BECOME A PRO
The easiest way to get tools and materials at wholesale prices or contractor discounts is to register for the Home Depot Pro Loyalty program. To become a Home Depot Pro, you don’t have to be a registered contractor or service provider. You just need to be a frequent customer. It also means that you can get into the store before “regular” customers and you get to park in the PRO parking spaces.
Lowe’s offers Contractor Packs and bulk quantities discounts as well with their business credit card that gives holders 5% off of certain purchase. Some restrictions apply, of course, but when you’re looking at quantity over quality, there’s a good bet that you’ll be able to get most of what you need at a discount.
Lumber will also certainly be a need, but getting it from a lumber yard may only save you a couple of dollars, so unless you’re doing an addition or building another structure on the property, you’re better off just getting everything from Home Depot or Lowe’s.
Buy from a Real Estate Wholesaler
While rehabbing a house or other investment property sounds fun, there are still some things you may not want to do yourself.
Top 10 list of Dogs Most Often Banned by Property Managers
Every property manager and land lord has their pet peeves (no pun… Ok, it WAS intended.). Some won’t allow smoking, others don’t allow adult film making, some ban all pets, while some just limit the type of pets they’ll allow.
To make you’re job as a landlord easier, we’ve published a list of the most dangerous dogs that are most often banned by property managers, landlords and insurance companies.
Pit Bulls and Staffordshire Terriers are the top breed Most Often Banned by Property Managers
1. Pit bulls and Staffordshire Terriers
Pit bull attacks frequently make the news. A report in early 2014 said a 10-year-old boy in Newark, N.J., was hospitalized in critical condition after his father’s two pit bulls repeatedly bit him.
The term “pit bull” encompasses both the American pit bull terrier and the American Staffordshire terrier. The breeds have a reputation for being unpredictable and dangerous; advocates from The Humane Society of the United States and other groups say the dogs are unfairly demonized.
Doberman Pinschers – 2nd breed Most Often Banned by Property Managers
2. Doberman Pinschers
Doberman attacks spiked in the 1970s, when the breed’s popularity grew. But in 2008, an 8-month-old baby was killed by his family’s pet Doberman in Brooklyn, N.Y. Neighbors said that while the child was lying on a blanket, the dog pounced and clamped his jaws around the boy’s tiny head. The baby’s grandmother couldn’t pry the dog off the child.
The American Kennel Club, or AKC, says Dobermans can be affectionate, obedient and loyal.
Rottweilers – 3rd breed Most Often Banned by Property Managers
3. Rottweilers
The AKC says rottweilers make good police dogs, herders or service or therapy dogs and are very protective of their territory. But North East Rottweiler Rescue & Referral in Portsmouth, R.I., notes that the dogs need obedience training, socialization and daily exercise and should always be kept under control.
Two roaming rottweilers ambushed an Atlanta high school student on school grounds in the fall 2013. The girl’s facial injuries required reconstructive surgery.
Chows – 4th breed Most Often Banned by Property Managers
4. Chow-Chows
In 2012, a chow chow was euthanized after attacking an 8-year-old boy on a bicycle in York, S.C. The boy, who reportedly played with the neighbor dog regularly, needed stitches and staples for the facial injuries he suffered.
This breed, known for its scowling expression, black tongue and thick coat, likes to hunt, herd, protect and pull. AnimalPlanet.com says the breed’s need to protect its human family and other pets can make the chow chow aggressive toward outside dogs.
Great Danes – 5th breed Most Often Banned by Property Manager
5. Great Danes
Many people associate Great Danes with the lovable Marmaduke from the comic pages and the 2010 movie. Yet an incident in Fletcher, N.C., shows that the breed can have a not-so-cuddly side. Police said two Great Danes critically mauled a woman when she entered the dogs’ kennel.
Because a Great Dane can weigh upward of 100 pounds, veterinary website Vetstreet.com recommends early training against jumping or acting aggressively.
Perro de Presa Canario – 6th breed Most Often Banned by Property Manager
6. Perro de Presa Canario
The Presa Canario has become somewhat notorious because of a 2001 case in San Francisco. A woman who kept two of the massive dogs is serving 15 years to life in prison because of their actions. The dogs fatally mauled a neighbor, who suffered more than 75 bite wounds when she was attacked in an apartment building hallway.
In places with breed bans, the Perro de Presa Canario often makes the list.
Akita – 7th breed Most Often Banned by Property Managers
7. Akitas
Popular show dogs, Akitas have strong guarding instincts and temperaments that range from calm to aggressive, so the AKC says they should always be supervised around small children and other animals.
In 2013, an Akita on a leash in a Murrieta, Calif., home improvement store reportedly lashed out at a 3-year-old boy who was petting him, biting the child on the jaw, neck and forehead, and below the right eye. His wounds required 50 stitches.
Alaskan Malamute – 8th breed Most Often Banned by Property Managers
8. Alaskan Malamutes
Originally bred as sled dogs for work in the Arctic, Alaskan malamutes have become popular as family pets. Known for strength, endurance, intelligence and ability to learn quickly, the breed also can be strong-willed. The Alaskan Malamute Club of Canada says the dogs want to fight and may require constant behavior training.
Police in Britain seized a pet malamute in early 2014 after the dog was suspected of killing a 6-day-old infant.
German Shepard – 9th breed Most Often Banned by Property Managers
9. German Shepherds
The AKC says the German shepherd is the world’s leading police, guard and military dog. The breed also is “highly represented in biting incidents,” according to a range of studies cited by the American Veterinary Medical Association.
An 8-year-old girl from New Athens, Ill., was mauled in 2013 by two German shepherds owned by the town’s former police chief. The girl was bitten on her left leg, chest and back.
Siberian Husky – 10th breed Most Often Banned by Property Managers
10. Siberian Huskies
Not all dog-bite incidents involve humans. In 2012, a Siberian Husky was accused of killing a Chihuahua at a dog park in South Euclid, Ohio. Other park patrons said the woman with the husky had no control over him. The dog was declared vicious under a city ordinance, requiring the owner to buy insurance, muzzle the dog in public, post a warning sign on her property and have the dog microchipped.
Wolf Breeds – breed Most Often Banned by Property Managers
Also: Wolf Hybrids (wolf dogs)
Perhaps the most controversial entry on most homeowner and rental insurance provider’s lists, wolf hybrids — or wolf dogs — are technically not a breed but are the animals that result from mating a wolf with a dog.
While staunch supporters say wolf dogs make good pets, critics argue that the animals are dangerous and unpredictable.
In 2002 in Ballard County, Ky., a wolf hybrid killed a 5-year-old boy. The owner pleaded guilty to reckless homicide.
When people think of “community service“, they think of coaching youth sports, serving food to the homeless or VOLUNTEERING in one capacity or another. No one EVER thinks of INVESTING IN REAL ESTATE as a community service endeavor, but you should. Wholesale Community Service is what we call it when we buy distressed properties and turn them into investments.
Throughout the United States, there are neighborhoods in various levels of deterioration and disrepair. Some neighborhoods are so run down that municipalities are GIVING houses away!
What’s even more fascinating is that this isn’t a new problem. In fact, community leaders in cities and states throughout the nation actually have task forces and initiatives to promote the buying and rehabbing of these dilapidated properties.
Vacant homes can evolve into havens for rodents or criminal activity, which will only get worse if no one does anything to change it. An entire neighborhood can suffer from just one neglected property – which will eventually lead to more abandoned homes and subsequent decline.
Wholesale Community Service HERO.
Neighborhoods throughout the nation need individuals like us to buy and repair the dilapidated homes that litter them. The people living in these neighborhoods will thank you profusely and may even throw you a parade (Though we’ve never seen that before, there’s a first for everything).
Buying vacant and neglected properties and rehabbing them is a rewarding endeavor in more ways than one. Bigger than the parades, thank yous and community picnics (we’ve never seen anyone throw a community picnic for a rehabber either), by becoming a neighborhood hero you stand to net about 30% PROFIT!
So, if you’ve been thinking of getting involved in real estate investing through rehab and flip, or you’re a seasoned REI, instead of telling people you’re a “real estate investor“, be honest with them, and tell them that you’re a “neighborhood rehabilitator”.
Thank you for your service.
BTGH specializes inwholesale property investments in the Tampa Bay area. While we’re not selling anything for a dollar, the upside is that the houses we sell are in good neighborhoods and are ready for rehabbing and sometimes even move-in ready. We do all of the hard work so that you can focus on what you like to do.
Are you a DIYer? Do you like sifting through garbage or cleaning brain matter off of the ceiling? Does the thought of removing old mattresses caked with feces get your heart racing? Then becoming a real estate wholesaler may be the perfect career choice for you.
Real Estate Wholesaler Job Summary
A real estate wholesaler basically does all of the real estate investment tasks that nobody else wants to do, knows how to do, or has time to do. Broadly speaking, real estate wholesalers look for investment opportunities, acquire them and then prepare them for the wholesale market.
Contrary to what most people may believe, RARELY does a wholesale market investor find a property that is move-in or rehab ready. When we pick up a property, it’s usually been sitting empty of a while, may be rat infested, may have been vandalized, and is usually in some state of decay.
Calculating Risk
Before we ever purchase a property, we perform an inspection to estimate the costs of:
Trashing out the property (removing all of the trash, broken appliances, broken fixtures)
Performing large scale repairs (drywall, roof, ceiling, foundation)
Replacing appliances and fixtures (toilets, sinks, lights, ceiling fans)
We also check the neighbors and the neighborhood. After all, anyone who invests in the property is going to do the same – or they should. A dangerous neighborhood or neighbors, or a house that’s too far from amenities or transportation services may result in high renter turnover. That of course affects rental income, property value and subjects the property to vandalism.
TEAM is Spelled… uh, T-E-A-M
Real estate wholesalers are TEAMS. There’s just no way that one or two people can do this and make a living. Money is made in bulk quantity. We’ve purchased hundreds of houses, multiplexes and condos, so we’ve gotten very good at estimating the costs of getting any property ready for the wholesale market. We’ve also got a pretty good network of contractors we work with. HVAC, plumbers, carpenters, drywallers, electricians, landscapers, and general laborers make up our team. No one person can manage every aspect or situation that may arise. We use professionals. You should too if, for no other reason, than to preserve you sanity.
We Buy LOTS of Houses
The only way to make money in the wholesale RE industry is buy many houses and turn them around quickly… in order to buy more houses. Our goal is that every house we purchase is ready for the wholesale market in 7 to 15 days. Many times we already have buyers BEFORE we purchase a property, so scheduling of contractors is tight. We do everything fast. Some days our office looks like a 1990’s stock market firm as we sit on the computers with a phone on each ear matching properties with investors.
So, in a nutshell, real estate wholesalers buy dilapidated properties and prepare them for the wholesale market.
Investment real estate is a term used to defiine any kind of real property that generates income or is intended to generate income – rather than being used as a primary residence. It’s very common for real estate investors to own multiple properties, generating rental income and profits through price appreciation.
Common examples of investment properties are houses, condos, and multiplexes like duplexes, quadplexes and apartment buildings. These dwellings are used by investors to generate ongoing rental income from tenants. Investment real estate is also expected to generate capital gains, as property values increase over time.
If you’re considering investing in real estate, you should be looking for properties that produce a monthly return while minimizing the amount of time and cash you need to spend tending to the property. To find the perfect opportunities, research is required. Purchasing investment real estate requires liquidating one set of assets (stocks, bonds, CDs, 401ks, etc.) and converting it into a “hard asset” – real estate.
“All real estate is extremely high risk. Development of real estate, land, Tenant-In-Common (TIC) investments, private real estate funds, fixer uppers, etc., all have much higher risk profiles than just simply buying a nice established cash flow investment property. In many of those investments, you will never see a dime of your money again because there are just so many things that can go wrong! So if you want to own real estate, consider simply taking fee simple title in your own name – or an entity you wholly own – to the properties you purchase. In addition, you must do the proper due diligence, analyze, test, review reports, etc., to make a lower risk real estate decision.”
Don’t believe everything you read.
Most of that is bunch of baloney
When the kaka hits the fan (as it seems to be happening more and more often lately), people invest in hard, tangible assets – like REAL ESTATE. Saying “real estate is risky” is like saying WALKING is risky… and walking IS risky, if you’re walking on the highway or in a national forest with a large black bear population. How about walking in the ocean? Literally walking straight into the ocean?!? That’s risky.
So, yeah, if you jump willy-nilly into a real estate purchase with no plan to how it will generate long-term revenue, you’ll just be wasting your money. Of course, that’s not “risky”. That’s just stupid. So, in the grand scheme of things, real estate is NOT risky, but you CAN make stupid mistakes.
How do investors make money in real estate?
While there are a number of factors that go into developing a successful and profitable real estate investment plan, the fundamentals of real estate investing can be summarized very easily:
1. Cash Flow
Investment Real Estate cash flow.
Real estate property produces income from the rent its tenants pay. Whether it’s a condo, an apartment building, or a shopping mall, investment property generates income by leasing its space. Property owners may also incur expenses to manage the property, such as electricity, insurance, janitorial, POA fees, or property taxes, which reduce the return on investment.
Yeah… so, cash flow. Makes sense, right?
2. Appreciation
People need 4 things to survive in today’s world: Food, shelter, health and education. Good health, a steady supply of food and the ability to focus on educating one’s self all depend on having adequate shelter.
(*** It’s easy to see where we’re going with this.)
Real estate has intrinsic value; People must live, work, and shop somewhere, and there is a limited supply of property. Of course, those limitations are based on population density, jobs, climate, and other factors. If a population is steadily increasing in an area, then – with all other variables remaining the same – the value of real estate is guaranteed to increase as well.
As property values increase, there is a justification in charging more rent.
Now, common sense must prevail here. If you own an old house in an area of new construction, it may be difficult to find renters for the same prices of comparably sized dwellings. If you own older investment real estate, you may need to keep your rents a little lower. In addition, you should always be a little nicer than the local property management company.
The real secret to successful real estate investing is RELATIONSHIPS.
Development
Sitting on Money
Development is the business of improving real estate through the process of building, renovating, or improving through adding square footage.
Development is probably the quickest way to get the biggest return your investment real estate, and it’s a great “elbow grease” investment, since you can see a return through sheer effort.
Overall, land with a finished building on it is worth more than just the land itself, and a rehabbed building is worth more than a dilapidated one. Get some rent paying tenants in those dwellings and you’re sitting on money.
Where do you find Investment Real Estate?
The biggest challenge in investment real estate is actually FINDING investment real estate. Obviously, purchasing real estate at retail value is not the smartest idea, and some properties are better investments than others. Some properties like vacation homes, houses in bad areas, and college rentals require way too much time and management to make them good investments.
Examples of good investments are nice boring properties that stay rented for long periods of time to clean, credit worthy tenants. They take the least time to manage and, if you them fairly and with respect, you’ll find that those tenants will take even better care of your property.
Good relations with tenants will reduce hassles when problems arise – and problems WILL arise.
Nice, boring, wholly owned, well maintained, cash flow-positive properties make the best investments. They’re out there, but you aren’t going to find them on Realtor.com for a decent price. You need to do some hard work, research, read up, and make smart, educated decisions to acquire the best real estate investments! Or find a real estate wholesaler.
The Real Estate Wholesaler
Investors were scooping Florida investment real estate like candy from a busted piñata
Over the last half-dozen years, investors have been scooping up cheap, distressed properties like candy from a busted piñata. Now, though, competition has increased a lot in the investment real estate market, and those same investors have started writing books, as things aren’t quite as easy as the once were. That’s good for the rest of us who are eager to get started.
Wholesalers are still investors, but they focus on quick returns on their investments. Quick returns are rarely LARGE returns. Wholesale real estate investors focus their efforts on foreclosure auctions, tax liens, estate sales & liquidations, inherited properties and distressed owners.
Once purchased, the wholesaler’s goal is to sell the property in 7 to 15 days. They have a contact list of fellow investors that they work with and who get first option on the properties, but this isn’t an exclusive group of investors.
Almost anyone can get access to the list of available properties a wholesaler has, but you need to know what you’re looking for so that you can find it. The key is to buy where the prices are still low, in cities with a lot of growth potential. In other words: Anywhere in Florida.
Best Places to Buy Investment Real Estate
20 Best Markets for Buying Single Family Homes
If you’re interested in purchasing investment real estate, there are a few things to consider. The first of course is LOCATION. Location plays a vital factor in who you’ll be renting to. This also determines how much your first investment property is likely to cost and how much revenue it’s likely to create.
If you’re a Florida real estate investor or are interested in Florida investment real estate, then you’re pretty smart. Of the top 20 best markets to buy investment real estate, 8 are on Florida and located in and around Central Florida, including Tampa, Lakeland and Orlando.
This list was developed by RealtyTrak and based on sales price, mortgage payments, cash flow, returns, and purchase prices. These are areas known to have a good population density, decent job market, and above average growth coupled with lower than average home prices.
“We are at a stage in the economic cycle where job growth–and demand for housing–is accelerating in some markets,” says Ingo Winzer, founder of Local Market Monitor. “The types of jobs created are often lower-paying, most suitable for renters, younger people who are willing to move from somewhere else and who don’t want to own a house right now but might have a young family and would like to rent one.”
Bay To Gulf Holdings is wholesaler of investment real estate. If you’re interested in purchasing houses, multi-plexes or condos to rent or flip, take a look out our ever changing List of available Florida Wholesale INVESTMENT PROPERTIES.
4 Things to Consider When Buying Investment Property
1. Location –
Everyone knows that LOCATION is the #1 factor to consider when buying a house. That goes for buying investment property as well. “Location” is a wide-range variable for so many questions.
How close to the highway is the house?
Who are the neighbors?
Where is the closest grocery store?
How far is downtown?
The location of a home affects a person’s quality of life. Proximity to activities, schools, shopping and public transportation determine free time and family time. Where the house is located is every bit as important as the house itself.
2. Condition –
Obviously, the great thing about investing in real estate is the fact that you can turn elbow grease in to equity. However, there are limits to your ROI (return on investment).
At BTGH we have a formula we use to determine whether or not a house, condo or multiplex is a good investment. We consider the outside factors first (like location), and then we look at the condition of the house.
The biggest increase to the value of a property is through cosmetic improvements. Improving the look of a property by either redesigning the landscaping, rehabbing the kitchen or putting new tile flooring in will do more for its value than stabilizing the foundation or adding insulation.
It’s kind of sad, but true. Make it look shiny and new, and people are more likely to buy it.
3. Neighbors –
People are social. For the most part, we like hanging out with other people. Of course, that doesn’t mean that we’re compatible with EVERYONE.
For example: We were considering purchasing a property for sale in the historic Tampa neighborhood of Seminole Heights one day last year. It was a beautiful little bungalow with hardwood floors and a fireplace at the end of a cul-de-sac. (Ok. So it wasn’t exactly a cul-de-sac. It was actually a dead-end that looked over I-275, but if you’re SELLING, then it’s a cul-de-sac.) As we toured the house, I noticed two little old bearded men next door, sitting in the driveway, drinking beer and looking over an old lawn-mower. More investigation saw MANY old lawnmowers in the backyard. Some were in a broken down old shed, and some were under tarps. This of course sent up a red flag that these little old men might be hoarders harboring rat nests in their old lawnmowers, and that they may even get a little rowdier as the day wore on.
After a little touring of the house, I again took a peak outside at the neighbors, and this time was surprised to see one of the little old men standing in our yard, peeing on the side of the house. At this point I decided that keeping a steady renter in the house with these guys next door was going to be areal challenge that I wasn’t willing to take on – at least, not for the asking price… or even $10k less.
When you’re considering a real estate investment or thinking about converting or purchasing a rental property, take a good look at the neighbors. The neighbors around that house will dictate who your tenants will be. If the house is surrounded by transient neighbors, you’ll very likely have regular turnover. If the neighbors are older, your tenant are likely to be older. Purchase houses and rental properties that represent the people you’d like to rent to.
4. Price –
More important than price is Return on Investment. The “price” of a house, is not exactly the “cost” of the house. When buying a house that you intend to convert into a rental, you have to consider the costs of getting it ready to rent, then consider ongoing maintenance costs. The best way to spend your money is on cosmetic improvements.
Americans are very impressionable and are always concerned with what others think about them. As a landlord, installing a state of the art A/C system is not as crucial as freshening up the front yard landscaping, painting the walls, or re-grouting the bathroom tiles.
Bay To Gulf Holdings assists investors interested in buying investment property. We are a wholesaler of investment real estate. If you’re interested in purchasing houses, multi-plexes or condos in the Tampa Bay area, take a look out our List of local Tampa Bay INVESTMENT PROPERTIES.
