Investor's Guide
In the past few years, Florida has emerged as one of the hottest real estate markets in the United States. Several cities in Florida including Orlando, Tampa, and Jacksonville have been listed as some of the best cities in Florida to buy a rental property for investment. But, Florida isn’t just a renter’s market. Many look to Florida to settle down because of its economy which includes no state tax, a growing job market and reasonably low cost of living.
Of all the coastal regions in Florida, you will certainly get the most “bang for your buck” along the Florida Panhandle and particularly along the Forgotten Coast which runs along the eastern portion of the Panhandle. It may not have the sugar-white sands that stretch from Panama City Beach west towards Pensacola Beach, but it delivers a coastal experience from Cape San Blas to Apalachicola to Alligator Point that includes secluded beaches, backwater vistas and breathtaking bay views that beckons tourists with a more laidback lifestyle with their vacation experience.
As a real estate investor, following the trends within the Florida market would be in your best interest. If you’re strategic enough to have a realtor “on the ground”, you can grab up an investment property at the right time, before there’s even a chance for competition. At the moment, its a seller’s market across the country, but as the old saying goes “All real estate is local.” Which is why its so important to work with a local agent in the area you are interested in. We hope this guide will help you in making sound decisions regarding investing in Florida, but if you have any questions, please feel free to reach out to us.
What Is Your Goal As An Investor?
This is the first step. Answering this question will determine your strategy as a real estate investor.
- Are you looking to buy undeveloped land to build a home one day?
- Are you wanting to buy an older home to “fix and flip”?
- Maybe buy and older home to fix up and put into the lucrative rental market?
- Maybe buy a condominium to put on the rental market?
- Or looking to buy property of like kind in a 1031 Exchange?
- Or maybe buy an existing home that needs very little updating and is already generating rental income?
All of these strategies are contingent on your goal and the type of financing required to achieve that goal. Cash is King. Bringing all cash in an offer provides incredible leverage in not only negotiating the final price of the property, but substantially improves the chances of quickly getting your offer accepted over other buyers’ biding for the same property. Remember, its a seller’s market at the moment. All cash offers also provides the ability to negotiate other aspects of the sale including whether some or all furniture should be included in the sale. With undeveloped land, you could negotiate with the seller on clearing the land for development.
“Sweat equity” is quite common for those investors who have the time and resources to buy an older home to fix it up to either flip or put it into the rental market. That reduces the amount of financial overhead in your investment which will improve the return on your investment (ROI) from the rental market. If that isn’t available, buying a cheaper condominium unit is an option but that comes with the additional condominium association dues that needs to considered in your GRI (gross rental income) calculations.
Where Do You Want to Invest?
As you see in the map above, there are a series of barrier islands that begins with the unnamed St. Vincent Island located across from Indian Pass and runs eastward to St. George Island and up to Dog Island. St. Vincent Island is a designated nature preserve. Dog Island is inhabited, but has no bridge access. Only St. George Island has a bridge and as a result is more developed. If you look closely at St. George Island on the map, you will notice a small opening between the westerly one-third of the island and the remaining two thirds to the east. That is known as Bob Sikes Cut (created by the Army Corps of Engineers in 1954) separating the smaller uninhabited Little St. George Island to the west from the remaining St. George Island. The eastern end of St. George Island is home to the St. George Island State Park. Altogether, St. George Island is a little more than 28 miles long.
The primary area we focus on is from Apalachicola east to Alligator Point which is essentially Franklin County, but our specialty is St. George Island. We bought a lot several years ago on the island and spent the last four years getting our home built on that lot. We know the upside and the pitfalls of home construction on the island as a result. As realtors, that brings an extra level of experience to the table that is invaluable to an investor unfamiliar with the process.
Drilling down onto St. George Island, the real estate market can be divided into three segments beginning with where the Bryant Patton Memorial Bridge essentially bisects the island. Homes to the east run to the St. George Island State Park which runs for another nine miles of undeveloped beach towards Dog Island. Homes to the west run to the entrance of the St. George Plantation which is a gated community offering an abundance of amenities and monthly dues. From that gated entrance, the St. George Plantation encompasses 1200 acres and runs five miles all the way to the Bob Sikes Cut.
Lastly, the island is anywhere from a quarter-mile to a mile wide. So taking into consideration the three segments mentioned previously, you then have to decide whether you are interested in property with a beach view or a bay view or somewhere in between. No matter where the property exists, its only a few minutes walk to either side. In terms of value, location is everything. Obviously, beachfront property is the most expensive and can go well over $1 million for an undeveloped lot in the St. George Plantation. Second to that would be waterfront property on the bay which can offer the ability to build a boat dock allowing easy access to the water. Between those properties is a myriad of options depending on which segment of the island you choose, but all allow easy and quick access to the beach. There is much more to consider in your choice of location and type of property, but know that we are only a phone call, a text message or an email away if you desire to learn more in your search for an investment property along the Forgotten Coast.