Investing in Sarasota

If you’ve heard the word that’s going around about real estate in Sarasota being cheap and just right for flipping and renting, I want to set the story straight:

No…but yes, sometimes, and maybe…but it’s getting harder every day to find a property that delivers.

I-75 runs north and south and has 4 exits to Sarasota, which are 6 – 10 miles from the beach. In between, there is very little land left to develop, and certain established areas have become the favorites of residents AND investors.

One such area is Gulfgate, located south of Clark Road and Stickney Point Road, west of Beneva Road and east of US 41, just across the bridge from Siesta Key! Along Gulf Gate Drive, and the surrounding area, small, ranch style houses from the 50’s, 60’s and 70’s are quickly changing hands and prices are steadily rising.

There were 37 homes for sale as of August 15, 2016, ranging in price from $172,000 to $460,000. So far in 2016, 122 have either changed hands or are in the process of changing hands, and 30 of those went for under $200,000, while 99 went for under $300,000 and a completely renovated home is currently under contract for $369,000.

So, as an investor, how can you make money? You could buy a junker and rent it to a junker tenant for junker rent, or you could renovate a house so that it looks good and is mechanically sound. Your tenants will appreciate the same qualities in a rental that homebuyers love when they buy: great kitchen, stylish bath, tile throughout, cold AC, a roof that doesn’t leak. Your tenant will pay more and you’ll make more, and the value of your property will stay on the high end of appreciation.

Rough formula: total amount of 12 month rental minus taxes, insurance and maintenance divided by your total investment = total return. In real numbers, $1800/month rent = $21,600/yr. minus $2000/yr. taxes - $1500/yr. insurance = $18,100, divided by, let’s say an investment of $250,000 = 7.24% return on your money. And if the property appreciates by 3%/yr., add another $7500 for the first year and you’re at 10.24% Optimistic, but possible.

Compare that to what you’re making in the market, at the bank and under the mattress and if it makes sense to you, call me, and let me help you find a property that delivers that kind of optimism.