Thinking of investing in Tampa real estate? If so, you’ll be glad to know it can be one of the most lucrative decisions you’ll ever make. That is, of course, if you do it right!
Over the past couple of years, real estate investment opportunities in Tampa have skyrocketed. This has led the competition between buyers to rise exponentially.
In order to land a great investment deal, due diligence is key. The following are some tips to help you in this regard.
Tip #1: Have a Goal in Mind
Having the finances available for a real estate investment is a start, but it’s not enough. It’s beneficial to also have a financial trajectory in mind to help guide your investment decisions. How you chose to spend your money on making the property a successful investment is key.
To help you come up with your goals, try asking yourself the following questions: are you buying or holding? Are you looking to build a property from scratch? Do you want to flip a property? Each of these options offers vastly different routes to your investment goals.
Tip #2: Look for Affordable Properties
The Florida real estate market boasts about having many affordable properties. However, you’ll have to do proper research before choosing a property.
Of course, the city center and downtown areas tend to have costly properties because of the high demand. If you’re working on a budget, it’s recommended to look at other areas where demand may not be as high. These include the suburbs and the semi-rural areas.
Tampa, in particular, is a real estate haven thanks to its affordability and good rate of return. The average rent, according to Apartments.com, is $1,085, $1,174, and $2,050 for a studio, one-bedroom, and two-bedroom homes respectively.
Tip #3: Search Online Listing Sites
This should be the first step towards buying a real estate property. It’ll help you get an idea of what to expect even before approaching a realtor or a property manager for help.
Some of the most popular sites include Realtor.com, Trulia, Zillow, LoopNet, RealtyTrac, Apartments.com, Rent.com and HotPads.
In fact, did you know that one in every two buyers found their home on the internet? According to the National Association of Realtors (NAR), that’s the case! The same statistics also found that only 28 percent of buyers in 2019 used a real estate agent to find their new home.
Tip #4: Work With a Local Realtor
Do you have a good understanding of the local real estate market? If not, it’s in your best interests to hire a local realtor who understands the local market dynamics.
A good real estate agent will know the best areas for property investments and can help make the purchase easier. Typically, all a real estate agent does is buy and sell real estate properties on behalf of their clients. As such, they will usually have a good understanding of the current market trends.
So, how exactly do you find the right realtor? Well, you can do this in multiple ways. You can get referrals from your network. You could also carry out your own research and interview the potential candidates.
Tip #5: Choose the Best Location
Location, location, location – this is every real estate agent’s mantra for a good reason. When it comes to real estate investing, location can make or break your investment.
Basically, the best location is one that has a solid population. Lucky for you, the demand for single-family homes in Tampa has been consistent.
Tip #6: Visit the Neighborhood You Want to Invest In
Using billboards and placards remains one of the most popular ways buyers advertise their properties for sale. So, if you have the time, take a ride in your car and look around the neighborhood.
Not only will this help you find the right property, but it can also give you an opportunity to be familiarized with the neighborhood as well.
Tip #7: Avoid Buying a Fixer-Upper
Buying a fixer-upper can be a great way to get a good deal and personalize a home. That said, if this is the first property you’re buying, the idea can be anything but good.
The two exceptions to this are if you already have a contractor who you’ve worked with before or if you’re skilled at large-scale home improvements.
Otherwise, go for a rent-ready property. It’ll usually be clean with no pending repairs and is available for occupation by tenants.
Tip #8: Determine Your Return
So, what return should you realistically expect from your Tampa real estate investment? Bonds may pay 4.5% while stocks pay 7.5% cash-on-cash return.
As a landlord, anything above 6 percent in your first year should suffice – especially because the figure will keep rising over time.
Tip #9: Hire a Property Management Company
Working closely with a local property management company like Cavalier Estates, LLC can be extremely beneficial, especially if you’re planning to invest in rental units. We work closely with landlords and tenants and know where the demand for rentals is highest in the city.
Of course, besides helping you buy in the right neighborhood, a property manager like Cavalier can also help you manage your property. Remember, owning and managing a rental investment are two different things. While anyone can certainly buy one, not anyone can manage it – at least not successfully.
Successful rental management requires, among other things, time, skills and experience. So, if you lack these, hiring an experienced property management company would be in your best interest.
Remember to have realistic expectations. Just like other investments, real estate isn’t going to buy you a Lamborghini right away. If this is your first investment property, consider hiring experienced partners like Cavalier to help reach your investment goals.