1. Researching the Market:

Before diving into the buying process, it is essential to conduct thorough research on the local real estate market. Familiarize yourself with the foreclosure inventory, pricing trends, and specific neighborhoods where foreclosed properties are available. This knowledge will enable you to make better-informed decisions when it comes to selecting the right property.

2. Financing Options:

Foreclosure purchases often require cash or pre-approved financing due to the unique nature of these properties. Contact lenders who specialize in foreclosure transactions to explore your financing options. Preparing your finances in advance will give you a competitive edge when making an offer.

3. Identifying Foreclosure Listings:

There are various sources for finding listings. These include public auction websites, real estate agents, banks, and government agencies. Compile a list of potential properties that match your requirements and budget.

4. Inspecting the Property:

Before submitting an offer, conduct a thorough inspection of the property. Due to the nature of foreclosures, they are typically sold as-is, meaning they may require significant repairs or renovations. Hiring a professional home inspector can help identify potential issues and estimate repair costs.

5. Hiring a Real Estate Agent:

Working with a knowledgeable real estate agent experienced in foreclosure transactions is highly recommended. They have access to a wider range of foreclosure listings and can guide you through the entire buying process, including negotiation and paperwork.

6. Making an Offer:

Once you have identified a suitable property, it’s time to make an offer. Conduct a comparative market analysis to determine the fair market value of the property and base your offer accordingly. Keep in mind that foreclosure sales are often competitive, so be prepared for potential bidding wars.

7. Due Diligence:

If your offer is accepted, it is crucial to conduct thorough due diligence. This includes reviewing the title history, checking for any outstanding liens or encumbrances, and ensuring the property’s legal status. It is advisable to consult with a real estate attorney to ensure a smooth and legally compliant transaction.

8. Closing the Deal:

Once all the necessary inspections and paperwork are complete, it’s time to close the deal. Ensure that all required documents are in order and that the necessary funds are available to complete the purchase.

Conclusion:

Purchasing a foreclosure property can be a profitable venture if approached with the right knowledge and strategy. By conducting thorough research, understanding the foreclosure market, and following the steps outlined in this guide, you can increase your chances of successfully purchasing a foreclosure property and taking advantage of the potential financial benefits it presents. Remember, patience and due diligence are key when navigating the foreclosure buying process.

If your looking to purchase a foreclosure remember to contact Kevin Bartlett, 239.977.5642 or email him at kevin@kevinwbartlett.com.

Visit http://cobiaholdings.com for off-market properties.

Know why you want to sell: Before you decide to sell your home for cash, think about why you want to do it. People usually choose this option because they need money quickly or something big has happened in their lives, like:

• Their house might be taken away because they can’t pay for it
• They’re getting divorced
• They got a house from someone who passed away
• They lost their job or need to move for a new job
• Their house needs big repairs they can’t afford

Find good cash buyers: Make sure to look for cash buyers who are honest and have a good reputation. Look for companies with good reviews from people who have sold their houses to them before. If you google “How to sell my house fast for cash in Naples” for example you’ll see a number of local whole sale real estate businesses that will buy your home for cash.

Know how much your home is worth: Before you say yes to a cash offer, figure out how much your home is worth and if there are any repairs needed. Cash buyers usually buy houses “as-is,” which means you don’t need to fix anything. But their offer might be lower than what your house is worth, so think about whether you’re okay with that.

Cash sales can be fast and easy: One of the best things about selling your home for cash is that it can be quick and simple. Cash sales can be finished in just a few days or weeks, compared to months for a normal sale. This can be helpful if you need money quickly or have to move fast.

Get ready for a fast closing: Cash sales are usually faster because there’s no need for a bank to approve a loan. Make sure you’re ready to do all the paperwork and other things needed to finish the sale.

Selling your home for cash can be a good choice if you need money quickly or have a big life change. Think about why you want to sell, find good cash buyers, know how much your home is worth, and be ready for a fast sale. Talk to a real estate expert to make sure you’re making the best choice for your situation.

Evaluate your home’s value and cash offer before accepting a– say after you’ve done a search .

Spring run is located within The Brooks master-planned development in Bonita Springs and Estero, FL. Spring Run is a 300-acre gated bundled golf community that features a total of 847 homes ranging from Condos, Coach Homes, attached villas, and Single Family Residences.  Spring Run was developed between the 1999 through 2002 by WCI communities and Pulte homes.

Spring Run is one of Estero-Bonita’s premier bundled golf communities. Featuring a Gordon Lewis designed course, which features 7,052 yards, par-72, 18-hole championship golf course you will be pleased with the playability of the course and will enjoy calling it your “home” course.

Spring Run residents have the option to join the Brooks Commons Club which offers a private beach club, health + fitness club, community center, and a private waterfront restaurant.

Spring Run features 10 distinct neighborhoods, which are situated with beautiful views of the golf course.

• Autumn Lakes – 121 Carriage homes
•  Sabal Cove – 48 attached villas
• Silver Creek – 52 Single-family homes
• Streamside – 52 Condos
• Sunset Stream – 119 Condos
• Whisper Creek – 64 Single Family Homes
• Willow Creek – 27 Single Family Homes
• Winding Stream – 146 Condos
• Coral Cove – 35 attached villas
• Hidden Lakes – 183 carriage homes

Amenities

Spring Run at The Brooks offers some of the finest amenities that a community can offer. Featuring just some of the ones as you pull through the gates you will see the pristine clubhouse as you enter. Amenities included are

• 18 Hole Golf Course
• Full Service Bar and Resturant
• Tennis Courts
• 24-Hr manned Security Gate
• And So Much More….

Photo by Tierra Mallorca on Unsplash

Managing a portfolio of rental properties is involved and it might be tempting to let less desirable tasks like reconciling expenses or filing receipts fall to the wayside. Failure to keep track of expenses can result in expensive mistakes. While you may hire an accountant or use software to get the job done, it helps to know which records you need to keep and their accuracy. Kevin Bartlett & Associates presents some advice to help you out.

Rental Property Bookkeeping

Record keeping is an important aspect of any business and real estate is no exception. These records are useful in analyzing the financial performance of the business. To optimize performance, you need to set up a solid bookkeeping system.

The two types of records that you need to keep are:

• An income and expenses record for each rental property in the form of a profit and loss statement
• Supporting or backing up documents in the form of receipts and bank statements to prove the accuracy and legitimacy of your rental income and expenses

Rental property expenses you need to keep

Property expenses are referred to as “line items.” They vary depending on real estate investor and property type and can fall into one of two categories:

• Maintenance, repairs, and utilities
• General operating expenses

Tips on how to track rental property expenses and the best resources you can use to make your job easier include the following:

• Tip #1: Understand your property expenses

Rental property expenses include mortgage, tax, and insurance. Knowledge of your rental property expenses makes it easier to calculate the real financial performance of your property. It also helps you avoid errors when filing tax returns and claiming deductions. If you are struggling to understand your property expenses, you can consult a financial advisor or accountant.

• Tip #2: Learn which expenses you can claim deductions 

You can reduce your tax bill by claiming deductions for certain expenses including legal fees, contents insurance, council tax, letting agent’s fees, service charges, and water, gas, and electricity. However, you cannot claim expenses for capital expenditure like buying the property or adding an extension.

• Tip #3:  Keep abreast with changes in legislation

Keep yourself up to date with any new legislation that may affect your tax payments and expenses. You can hire the services of an accountant or financial advisor to help you.

• Tip #4: Request invoices and receipts and file them

For accuracy and verifiability, keep a proper record of all invoices from contractors and expense receipts.

How to track expenses

A simple spreadsheet may suffice if you are managing one or two rental properties but more capable systems become necessary as your portfolio grows. Setting up a robust rental property management system can ease your expense tracking and help you make the most out of your investments. 

Helpful software you can use

Mobile apps and trackers have made it easier to manage rental properties. They allow you to track receipts, record daily bookkeeping items, create reports and prepare tax returns. Their benefits range from time-saving to providing a real-time report on the progress of your real estate portfolio with alerts on late payments.  

QuickBooks Online Advanced for example is software for invoicing and so much more. It makes it easy to track where your money is going. You can connect your bank and PayPal accounts, track and save receipts, and this system will even automatically sort expenses into specific tax categories so you can come fully prepared when tax time rolls around.

Record keeping can be overwhelming but when done correctly, it has significant financial benefits for any rental property manager. Benefits include saving time during tax season, forecasting future expenses, and avoiding debt and fraud. With the right system, you can track expenses and rental income for every property and determine the best strategy for fine-tuning operations to boost your bottom line.

Our real estate market has been moving at break-neck speeds as confluence of events over the past year (notably COVID) has literally disrupted and accelerated the way we live & work.  So what happened in quarter 1 as far as the Southwest Florida real estate market – including Fort Myers, Cape Coral, Estero, Bonita Springs, & Naples? Unfortunately because things have been so crazy, today’s market is beyond normal statistical data. We are truly in uncharted territory. And although Florida is special in many ways, our unique paradise is NOT unique in terms of home valuation increases and a lack of inventory, as we’re seeing similar trends – even in areas affected by COVID and by the riots – for example Minnesota & Minneapolis. However, while some feel that a market correction lies ahead, many others consider this to be a “recalibration of values” for what has arguably been an undervalued market for quite some time and perhaps a “new normal” for real estate here in Southwest Florida.  As always, the main purpose of today’s report is to provide accurate up-to-date big picture market data, but furthermore, its about understanding the root foundation of it all to best project where the market may be heading in the months to come.  

Quarter 1 2021 – Southwest Florida’s Real Estate Market

Closed Sales – Transactions:  Per the MLS for Q1 of 2021 we had 12,300 total closed sales or 4,100 per month: Up 26.4% when compared to our 2020 monthly average of 3,244 sales or 9,732 per quarter.  Let’s not forget 2020 was a record breaking year, by significant margins too!

Q1 2021 (12,300) vs Q1 2020 (8,709):  Up 41.2% in total closed transactions. 

***Jan 2021 (3,274 Closed Sales) vs Jan 2020 (2,331 Closed Sales): Up 40.5%
***Feb 2021 (3,701 Closed Sales) vs Feb 2020 (2,698 Closed Sales):  Up 37.2%
***Mar 2021 (5,325 Closed Sales!) vs Mar 2020 (3,674 Closed Sales): Up 44.9%

What’s important to note here, is that early 2020 was a solid, stable market (with no COVID in sight). Despite this, volumes are up TREMENDOUSLY!

***Q3 2020 (10,612 Closed Sales) & Q4 2020 (11,820 Closed Sales)

Closed Sales – Volume:  Per the MLS for Q1 of 2021 we had $14.99 Billion or just under $5 Billion per month:  Up 56.1% from our 2020 monthly average $3.2 Billion per month or $9.6 Billion per quarter.   

Q1 2021 ($14.99 Billion) vs Q1 2020 ($8.26 Billion):  Up 81.5% in total closed volume
***Jan 2021 ($3.91 Billion) vs Jan 2020 ($2.22 Billion): Up 76.1 %
***Feb 2021 ($4.41 Billion) vs Feb 2020 ($2.41 Billion):  Up 83%
***Mar 2021 ($6.67 Billion!) vs Mar 2020 ($3.62 Billion): Up 84.3%

***Q3 2020 ($10.2 Billion) & Q4 2020 ($12.9 Billion)

Phew – not only are volumes of transactions up – but so were values, leading to an 80%+ INCREASE IN SALES AMOUNTS. Based on our end of year report last year, we were calling for 20% gains in average transaction value, ie, if your home was worth $100,000, it will now be worth $120,000 – and we’re well on our way to confirming that (possibly shattering it).

Pending Sales:  For the month of March we saw 4,976 pending sales, Up 4.4% from Feb (4,751) and down 1% from January (5,027) but still up 53.4% from our 2020 monthly average closings (3,244).  Pending sales are still very high, yet, limited due to the inventory shortage. 

Luxury Market:  

$1+ Million for 2021 Q1:  (1,256 Closed Sales) vs 2020 Q1 (642 Closed Sales): Up 95.6%
***921 of 1,256 or about 73.3% cash

***2021 Q1 Monthly Avg. (314 Closed Sales) vs 2020 12-Monthly Avg. (248 Closed Sales): Up 26.6%

$2+ Million for 2021 Q1:  (489 Closed Sales) vs 2020 Q1 (254 Closed Sales): Up 92.5%
***402 of 489 or about 82.2% cash

***2021 Q1 Monthly Avg. (163 Closed Sales) vs 2020 12-Month Avg. (94 Closed Sales): Up 73.4%

We’re seeing luxury homes breaking out as the largest moving category. This makes sense as it seems wealthier individuals and families are flocking to Florida for it’s healthy tax environment, and fleeing oppressive local and state governments. Currently New York is seeing the largest activity as far as interest in moving, and eventual transactions down to Florida.

Cash Sales (48.3%) in Total by City: Up 21.4%

Naples (55.5%);  Bonita Springs (56%);  Estero (55.7%);  Fort Myers (46.1%);  Cape Coral (33.7%)
Lot & Land (95.4% Cash):

2020 Q1 Lots/Land: (5,070 Closed Sales) vs 2020 Qtr Avg. (2,737 Closed Sales): Up 85.2%

***With low inventory it’s no surprise to see a surge in lot sales. 

Cash transactions are up greatly, and we expect this to continue to rise as appraisals are greatly trailing real market value.

What’s Driving This Crazy Real Estate Market?

Low Inventory:  As of last month, we showed only 3500 total listings or LESS THAN ONE MONTH OF INVENTORY. This was for all of Southwest Florida and is down almost 70% of where we should be for a balanced market. There are simply not enough homes to meet demand. And with the previous average on market time of 90-120 days, we’re blowing through inventory quicker than ever. This is mostly a result of strong buyer demand, high competition from deep-pocketed institutional investors, builders inability to provide new inventory, and seller hesitancy as replacement properties are not as easy to find thus limiting new resale inventory.  

The COVID Effect:  Due to the global pandemic and massive shutdowns people have been unable to travel overseas or take cruises which left many not only valuing homeownership more in general, but also looking for that “getaway” here in the states with Florida capturing a lot of that traffic.  As a result, single family homes have been in extremely high demand for vacation rentals as buyers and institutional investors (who account for 20% of all sales right now across most markets) see the yield return potential given that other investment vehicles like US Treasuries have tanked and commercial real estate quickly became unappealing thanks to massive shutdowns. 

Tax Benefits:  Let’s forget the many tax benefits of living here in Florida such as having no state income tax (1 of 7 states) which means Social Security retirement benefits, pension income, and income from an IRA or a 401(k) are all untaxed.  There’s also no estate or inheritance tax saving families a considerable amount of money after loved ones pass.  Bottom line, your retirement accounts will go a lot further and it makes financial sense to live in Florida.  

Areas to Keep Our Eyes On:
Commercial Market:  With the rise of remote working and concern for health and well-being of employees, expect more of a “hybrid-type” model for many companies going forward.  Shared flex spaces are expected to be an area of growth while we might see some polarization between high-quality/adaptable buildings vs those outdated/less flexible.  It’s still too early to tell but it’s no secret that online shopping has forced downward pressure on brick and mortar retail space and hotels have suffered as well.  ***Per NAR for 2020 the SWFL was ranked as the #1 commercial market in the US, more specifically Cape Coral and Fort Myers:  This shows that investors are comfortable making moves here in FL and a big boost for the local economy thus helping provide more jobs.

New Construction: Since the bubble burst 12 years ago homebuilders have remained cautiously optimistic and as a result built only half as many homes over the past decade leaving us short on new inventory.  We have officially hit a bottleneck point where our market cannot keep up with the current rate of demand thus maintaining an upward pressure on pricing as a result.  New construction is our direct source to new supply of homes and their ongoing trends are always a good indication of what lies ahead.  

Supply/Distribution Chain & Pricing: Given the nature of this past year with mass economic shutdowns & rising material costs across the board, it’s not helping the upward pressure on pricing across the board.  Appliances, lumber, roofing & plumbing materials, have all taken longer to get and significantly more expensive than what it was pre-pandemic.  We are seeing the added cost to new construction homes (24k on average) and on remodels as a result. It’s estimated that the price of steel mill products have jumped 22% in the last 3 months alone.  

RSW Airport:  Currently ranks #1 out of 50 airports in the US and has recovered 60% of it’s pre-pandemic traffic, more than any other airport.  Construction continues on a new $80 million airport traffic control tower and the plans to build the $280 million 200,000 square foot terminal expansion will be bid this month per Ben Siegel the executive director for the Lee County Port Authority.  This would certainly indicate expected growth and future optimism here in SWFL.  

Homeowners Insurance:  This is one of the few true “pain-points” of our current market with premiums on the rise, scaled back coverage, and a substantial increase in claim payouts here post hurricane Irma which has now led to rate increases across the board.  Any new purchases going forward will certainly feel the impact of these effects and the rising insurance costs themselves could potentially act as a minor “pressure relief valve” on the current state of things, especially to those obtaining a mortgage.  

Is a Correction Coming?

We don’t believe so – at least not in the near future (1 year out). Although hard to say with certainty, there are just too many confounding factors that leads us to believe prices and transactions will continue to skyrocket. Perhaps from a statistical perspective it will look bad (low inventory means low overall volumes and transaction amounts) on a home-by-home basis, prices will continue to skyrocket due to low interest rates, low inventory, and our desirable location. Additionally we have the land and resources to continue to grow for many years to come.

We are in what’s regarded one of the strongest and most sought after real estate markets in the country.  There’s just too much demand and projected future growth ahead for us to expect an imminent downturn and furthermore, this market is not built on a house of cards like it was during the “Great Recession”. 

Foreclosure Moratorium:  One thing to keep in mind regarding a correction and our opinion that it will not happen is foreclosures. It’s expected that the foreclosure moratorium will be extended until December 31, 2021, but time will tell.  At the beginning of the pandemic the foreclosure pipeline was already at record lows and since then homeowners have gained significant equity over the past year making it less likely they would be in distress.  People generally default on a loan when they can’t afford to do so or are upside down in value which very few people are facing these days. Just like our parents or grandparents were shaped by the “Great Depression”, the same could be said about us today and the “Great Recession”.  Equity:  Americans are sitting on a record breaking $7.3 Trillion in tappable equity, up 18% since the end of 2019, yet, we’re not tapping into them like our own personal piggy banks like during the “Great Recession”.  In fact, in 2006 American’s cashed out $321 billion (89% of all refi’s) vs $153 billion in 2020 (33% of all refi’s), which represents only 47.7% of the total equity pulled back then.   

Where Does the Real Estate Market Go From Here?

Up… up… and away

Supply vs Demand:  Until we find more of a balance between supply and buyer demand, we can expect these same trends to continue and drag on.  Builders are pushing new homes out as fast as they can but not fast enough to accommodate today’s demand thus creating a “bottleneck” and seller reluctance isn’t helping either.  Demand has been consistently strong in spite of our international buyers mostly sidelined this past year which is certainly an opportunity sector going forward.  It’s not as easy as building more homes with material and labor costs continue to rise, not to mention the tariff’s in place on Canadian lumber.  At the current rate of production it would take a few years to meet excess demand. 

Appreciation/Affordability:  Most expect the market to experience more moderate growth in value in 2021 as most project anywhere from 3% to 5%, with others a bit more aggressive showing up to 7% or 8%.  The nature of our current supply and demand will most certainly keep an upward pressure on pricing and buyers seem to have no problem paying what they currently are for homes, hence the “recalibration of values” which is also making appraisals tough.  Affordability is becoming an issue as more and more people are willing to still pay for homes at today’s price but just know, prices can’t rise forever but some experts don’t foresee a leveling off until late 2022 into 2023.  

Many experts anticipate that we’ll see a softening of pending and closed sales for the remainder of 2021 given the nature of low inventory, but yet, we’ll remain in a strong market perhaps just coming back down to earth a bit.  NAR recently projected that for all of 2021 that we will see 6.5 million sales which would be a 15.2% increase from 2020.  For now, it seems as if the simple economic laws of supply and demand will continue to lead the way.  We’re seeing large pooled investing companies make large investments in housing in areas like Miami and Tampa. If those same inflows come into Southwest Florida (which is actually much more primed to benefit from that kind of investing) we may see prices soar even higher than the above estimates. Not to mention the current hyper inflation we’re seeing with commodities like wood, steel, etc.

When should you attempt to repair your home by yourself? When should you call a trained professional? Here’s a comparison of some common home projects and expert recommendations for each.

When to Hire a Professional

If it feels daunting to complete a home repair on your own, remember that you can always turn to local professionals for assistance. No matter how big your project might be, a trained expert can help you turn your house into your dream home.

Here are some projects you should leave to the professionals, and what you’ll pay for each:

• Hauling away junk. If you have any big items that need disposing of, including old appliances, furniture, carpeting, or anything that’s too large to feasibly remove it yourself, then hire someone to do the job for you. Not only can they professionally dispose of these items for you, but you won’t have to risk life and limb doing the job yourself.
• Roof maintenance. Although you might DIY basic roof maintenance, leave roofing repairs to the professionals. Costs vary, but local roofing contractors provide free estimates and are happy to answer your questions or make recommendations.
• Solar panel installations. Eco-friendly upgrades like solar panels are not only great for the environment, they’re good for your wallet, too. DIY installation is tempting, but hiring an expert ensures safe, proper installation. You’ll pay more up front, but you’ll get a tax credit. You might even qualify for a $0 down payment. The average cost of solar panel installation is $12,558 after tax credits.
• Repairs that require purchasing expensive tools. As Forbes says, “DIY doesn’t mean doing everything yourself.” A cracked foundation or structural changes require an engineer. If a “simple” project means you’ll purchase a $200 drill that you’ll only use once, consider the amount of time and money it will cost you.
• Interior redesign or decorating upgrade. Decorating might seem like something you can handle on your own, but an interior design professional can help you see your space in a completely different light. They’ll be able to make suggestions based on your budget, whether that includes remodeling your kitchen or creating a 3D model of your living room so that you can plan where to set new furniture.

When to Do It Yourself

These days, homeowners have a wide variety of resources readily available at their fingertips. That makes it easier than ever to complete simple home improvement projects and repairs without having to spend money on contractors. The following projects are perfect examples:

• Painting and wallpapering. Adding a new coat of paint or wallpaper freshens up your home. Choose your colors, mask your floors and furniture to protect them from paint splashes, and clean the walls before you get started.
• Faceplate upgrades. With starting prices at pennies per plate, updating your home’s faceplates is another affordable DIY task. If you’re painting the walls or adding a backsplash, grab a screwdriver and remove the old plates first. Once you’re done, installing the new plates only takes a few minutes.
• Wainscoting. According to This Old House magazine, “Shoulder-height wainscoting brings formality and elegance” to your home. With the right tools, you can easily install wooden boards and panels by yourself, saving thousands. Even if you don’t own a saw, you can order pre-assembled wainscoting that arrives ready to be installed.

If you have the time, money, and skill, completing a DIY home improvement project can be a rewarding experience. However, tackling a home repair project by yourself isn’t always the wisest idea. Sometimes, it’s best to leave repairs to the professionals. As a general rule, renters should contact the landlord or property owner about any repairs. If you own your home, check with your homeowners association first to see what they’ll cover and what, if any, renovations are prohibited. Regardless of your current situation, if there’s any chance you could damage your home, lose a rental deposit, or decrease your property value, you should hire a contractor. Your money and time are valuable, and you’ll sleep better at night knowing that your home repairs are in good hands.

Preparing to sell your home? Kevin Bartlett & Associates is at your service. Call 239-214-3476 to get started today!

What to Know About Moving to Florida

• New Florida residents have 30 days to obtain a Florida driver’s license. However, you’ll need to register and insure vehicles within 10 days of establishing residency.
• Car insurance rates may give new residents sticker shock: Florida has some of the highest car insurance rates in the country. Luckily, there are tactics to lower your cost.
• Speaking of insurance: New homeowners shouldn’t forget flood and hurricane coverage when purchasing homeowners insurance in Florida.
• Don’t let these extra costs scare you away from buying a home in Southwest Florida. With no tax on personal income or intangible assets, Florida enjoys one of the lowest overall tax burdens in the country.

Finding a Job in the Sunshine State

• Healthcare, education, and retail dominate Southwest Florida’s job market, but job seekers can find opportunities across a wide range of industries.
• Many newcomers to Lee and Collier counties are bringing jobs with them. Here’s what to consider if buying a home for remote work.
• The Ft. Myers, Naples, and Cape Coral area is also a great place to start a business. Local business owners can access a variety of resources including the Lee Entrepreneurs’ Assistance Resource Network and Goodwill’s MicroEnterprise program.
• Struggling to find the right job opportunity? Visit CareerSource Southwest Florida for job listings, career services, and more.

Education in Southwest Florida

• Choosing a school in Southwest Florida varies by county. Collier County students attend their neighborhood school or apply for an out-of-zone school. In Lee County, families rank school choice by preference.
• Private schools are also a popular pick with Southwest Florida parents.
• Do you have a college-bound high school student at home? Florida has a wealth of scholarship and grant opportunities for residents.
• Unfortunately, Florida discontinued its Complete Florida Degree Initiative for adult learners in 2020. If returning to a traditional college or university is too intimidating, consider a real-world degree from an online school.

Southwest Florida Healthcare Providers

• Quality healthcare is a top priority for many newcomers to the state. Luckily, several local hospitals rank among the best in the nation.
• Florida uses the federal healthcare exchange. That means consumers searching for an ACA-qualified plan apply at Healthcare.gov.
• Florida’s Children’s Health Insurance Program (CHIP) is known as KidCare. Adults can check their Medicaid eligibility here.
• SHINE is Florida’s State Health Insurance Program serving older adults with Medicare information and assistance.

More Resources for Getting to Know Southwest Florida

• Discover the best beaches in Florida.
• Exploring the wilds of SW Florida’s state parks.
• Top 10 public and private SW Florida golf courses.
• Your guide to farmers’ markets in SW Florida.
• 100 things to do in SW Florida with kids.
• Beat the SWFL heat: 15 fun things to do indoors.

There’s a lot to love about living in Southwest Florida. Whether you’re a remote worker, a retiree, a young professional, or a growing family, let these resources take you from buying a house in SW Florida to making this community your home.

Ready to find that perfect home? Get in touch with Kevin Bartlett of Realty World J. Pavich Real Estate, SWFL’s most innovative real estate team. Get in touch with Kevin today by stopping by this website or calling 239-826-1891. 

In a report we published just 1 month ago, comparing the search trends for real estate in Florida across the United States, we saw over a 100% increase from March of last year (the beginning of the wuflu) compared to the previous year (and Florida real estate was already BOOMING)! But, the question is, is this sustainable? Well thanks to our partnership and connections with DR Horton, they’ve shared an amazing piece they developed on the differences between this boom and the previous boom, including where we may be heading. Overall it’ll be great news for homeowners, and anyone looking to sell between now and the next couple years. And yes, for now, this time it IS different.

On a local level we’re seeing virtually NO speculation (very few flips, almost no investment property investment) with almost all of the inventory I’m helping clients to buy or sell being exclusively their primary residence. And, unlike previous decades, buyers are selling their main homes in the Northeast – forgoing the luxury of a second retirement home in Southwest Florida – and instead opting for permanent residence in our tropical (and political) paradise.

2003 vs. 2021 – Start of Housing Bubble 2.0? or Beginning of New Normal?

Summary:  We find some similarities between 2002-2003 and 2020-2021.  We think they are worth discussing and exploring to see whether we find ourselves at the beginning of a potential housing bubble 2.0? or whether this is the beginning of a massive rally that acknowledges the new normal for housing?

Figure 1. Homebuilding Index. Source: Yahoo Finance and HRC.

1998-2001.  We begin our analysis looking at the period between 1998-2001.  These years were the height of the “dot-com” boom era where anything that had a “.com” attached to its name went public and was instantly worth billions.  People chased after them thinking it was the quick way to riches.  During this time the builders were seeing fairly steady demand of about 900k new home sales or 1.2 million single family starts and permits.  Mortgage rates were fairly stable in a range of 7-8% for a 30-year fixed mortgage.  After the dot-coms began to crash, the Fed acted decisively to try to prevent a recession by cutting the Fed funds rate aggressively from 6.5% at the peak in 2000 to 1.0% by Jun-03.  This was exacerbated by the 9/11 crisis which put the country at war with terrorism.

2002-2003.  With the crash in the stock market, investors moved to the relative safety of owning something tangible like real estate. What could be safer than a home?  As interest rates began to go down, we began to see home sales go up. Many homebuyers opted to use variable rate loans rather than fixed rate loans.  As the sales pace began to rise, builders began to raise prices hoping to slow down the demand. The more they raised prices, the more that demand went up. Supply began to go down. We saw inventory reach a low of 3-4 months supply in both the new and existing home markets.  Orders began to grow rapidly in 2002. The chart below shows that by 3Q02 most builders were seeing very strong order growth activity with several builders posting order growth rates in excess of 50% YOY.

Figure 2. Builder order growth in 2002.  Source: Builder press releases and HRC.

The builder stocks reacted by initially going up from their lows of $7.0 billion market cap in Feb-00 (when no one cared about builders and the stock market peaked) to their high of $31.7 billion in Jun-02 after investors started to see the strong order growth.  The builders sold off eventually bottoming out at $24.8 billion in Dec-02, down 22% from the high.  After reporting the 4Q02 earnings season the stocks were not much higher at $25.6 billion in Feb-03.  Although revenue and EPS estimates were going up and the stocks were attractively valued at a P/E of 5.5x and Price/book of 1.36x, many investors felt the stocks had already gone up “too much” and were afraid to get involved in the sector.  Some analysts even began to worry of a housing bubble in 2003 and recommended to stay away. Yet the market was just getting started.  Anyone who listened to that advice missed out on some nice gains over the next two years.

At the end of 2002, the average price of a new home sold by the public builders was $252,000.  Assuming a 5.5% 30-year mortgage rate the payment would be $1,431/mo. Based on a median household income of $45,000 this would represent 38.2% of the gross income. When we compare this vs. today even though the average price of a new home is $402,000, up 60%, we find that the 30-year mortgage rate is now 2.75%, down 50% YOY. This means that the average monthly payment is only up 15% vs. two decades ago. Then we find that median household incomes are up 42% YOY. Therefore, the home payment represents only 30.8% of a buyer’s gross income vs. 38.2% back in 2002 before the bubble started.

Figure 3. Homes are much more affordable today than in 2002.

Then something changed in investor’s view of the sector.  And the stocks began to move up sharply. It seems as if the fear was replaced by greed or simply an acknowledgement that the stocks were too cheap and that the stocks deserved a higher valuation given that earnings were rising rapidly. From Mar-03 when the stocks were valued at $26.1 billion to the end of 2003 the builder stocks doubled in price. By Nov-03 they had a market cap of $53.2 billion.  This was the beginning the housing bubble.

2004-2005.  The builders kept raising prices, and the more they raised, the more they sold, and the higher their margins expanded and earnings went up.  What few failed to realize or they simply turned a blind eye was that a large number of the buyers were not end users. Many were simply investors and speculators who realized that buying a new home was the easiest way to make money fast.  A buyer only needed to put down a small deposit to get the home started and by the time they closed on the home 6 months later the home had appreciated significantly.  They could just close and flip the home for a huge profit.  The biggest appreciation happened from Jan-04 to Jul-04 when homes in Las Vegas went up from $300,000 to $600,000 or 100% in just 6 months!  Builders were generating gross margins of 50%!  The other people who started to buy were subprime buyers who had low FICO scores and no money for a down payment.  So builders started to ramp up land buying.  They spec built entire communities.  We toured some of these “ghost towns” in 2006 where we found 250+ completed specs.  Many thought at that time that the sustainable demand was 2+ million new home starts per year. The more homes they sold the more land the builders bought at ever higher prices.  Everything was too good to be true.  Eventually the music stopped.

Stocks Peak 2.5 years after Bull Run Starts. The market eventually peaked in 2005.  The stocks peaked at a market cap of $101 billion in Jul-05.  Total housing permits peaked at 2.24 million in Sep-05.  Single family starts peaked at 1.84 million in Nov-05.  New home sales peaked at 1.40 million in Oct-05.  The stocks went up 4x from the beginning of the rally in Mar-03 to the peak in Jul-05.

Figure 4. Single Family permits vs. New Home Sales. Source: US Census and HRC.

What Went Wrong?  As we look back in hindsight we find a few things that went wrong.

1. Builders were selling homes to non end users.  We believe if builders had not been selling homes to investors perhaps things might have not gone up as high as they did and we might not haveD. o you have any video of that? I’d l had the kind of crash we had from 2006-2011.
2. Builders were selling homes to unqualified buyers.  We now know that many of the buyers should not have been allowed to qualify to buy a home, but the main goal of the Bush administration was to increase the homeownership rate. This is why allowed down payment assistance programs that enabled people to buy with 0% down.
3. Lending standards were loose.  Many lenders were careless about who they lent to. There were a lot of shenanigans back then that did not become apparent until after the crash. It frankly didn’t matter to those in the mortgage industry at the time because all those mortgages were resold and packed as mortgage backed securities. And these in turn were resold as CDO’s which then became CDO-squared.  The goal was simply to originate as many mortgages as possible.  At the peak of the cycle there were even Negative Amortization loans, where the principal balance grows.  Mortgage lenders allowed investors to buy multiple properties. Everyone turned a blind eye to the speculation and greed that was going on. People simply collected their commission for originating and passed the hot potato along to someone else.
4. Buyers raised prices without thinking of the long-term consequences.  Instead of focusing on managing the demand by increasing the production capacity and thus mainly the volume but not the price, builders who were up against their production capacity focused on raising the price first.  They saw that the more they did that the more their margins went up. However, the long-term consequence was that the land prices went up significantly too.  Eventually all the high cost land that was purchased at the peak of the cycle was impaired costing the builders and their investors $27 billion in losses and decimated book values.  The end result was home prices crashed leading to over 10 million foreclosures and short sales. In some markets prices went down about 50%-75% from the peak to the trough.  There was no land development for over a decade which is why we now have a massive shortage in affordable homes.

The excesses of the housing bubble resulted in the housing crash and the distorted housing market we have experienced over the last 2 decades.  This is why so many builders had until the last 2-3 years avoided building affordable homes for entry level buyers and had instead opted to build homes primarily for move-up buyers.  This is why we were only building 400k-600k homes over the recovery that lasted from 2011-2018.  The Dodd-Frank regulations that came out as a result of this fiasco have helped to some degree avoid some of the excesses this time around, but also made it more difficult for many people to buy a home.

Now we turn to comparing this cycle vs. what happened back then.

Our modern bubble.  We would argue that our modern bubble today is crypto currencies. Many retail investors are currently chasing after any new “coin” that shows up thinking that they will be in early on the next bitcoin. This is why we now have 7,000 cryptos vs. 2,000 a year ago. It seems to us few might survive and many will cost investors dearly. That said, watching the Fed print Trillions and watching the government run Trillion dollar deficits does not give us much comfort either in the value of the $US dollar. It is said that 40% of all the money the US has ever printed was printed in 2020 alone.

2020-2021.  The stock market and the housing market were doing well at the beginning of 2020 until mid Feb-20.  Almost no one seemed to take notice of a virus known as SARS-COV-2 which started spreading from Wuhan China in late 2019 to other parts of the world like South Korea, Italy and Iran in early 2020.  After it reached the US in Jan-20 no one paid attention.  By mid Feb-20 a few began to ask questions and stocks started to sell-off. By mid Mar-20 the entire world went into panic mode as the crisis was officially named a pandemic.  The stock market crashed.  The S&P500 fell 34%. Builder stocks fell on average 58%. The Fed acted decisively to try to prevent a recession by cutting the Fed funds rate aggressively from 2.5% where they peaked in Dec-18 to 0.0% by Mar-20.

Figure 5. Change in builder stock prices at onset of COVID crisis. Source: Yahoo finance and HRC.

At first the builder stocks crashed as people were told to stay home and few people bought homes.  But fortunately this didn’t last long. By May-20 builders began to see signs of life again which turned into booming demand for housing from Jun-20 to Dec-20. This has now continued into the first few weeks of 2021.  Builders have been posting very strong orders in 3Q20 and 4Q20.  Yet the stocks have not gone up much on their reports.  In fact when we look at the builder stocks they initially peaked at a market cap of $118 billion on October 15, 2020.  Then the stocks started to sell off due to analyst concerns that what we were seeing was unsustainable. Nearly 3 months later the stocks were trading at $100 billion on January 8, 2021, down 15%.  The stocks barely got back to a value of $117 billion last Thursday February 4, 2021. Despite good 4Q20 results, it seems many investors are afraid to get involved, concerned that the order results won’t last and that we are in the last innings of the last cycle.  Many never seemed to realize the housing cycle ended in 2018.  Others perhaps fear that we could be seeing the beginning of another bubble. Whatever the case may be the current valuations indicate there is massive fear and disbelief.

Figure 6. Builder order growth in 2020. Source:  Builder press releases and HRC.

This morning we received a report that showed home prices in Austin TX have gone up significantly over the last year.  When we see this type of data it makes us wonder if we are starting to see the beginning of “Housing Bubble 2.0”.

Figure 7. Resale home sold and prices in Austin TX. Source: Austin realtor.

Yet we don’t see this type of appreciation in the builder homes – at least not yet. If we look at the table below, it shows the average home prices for orders in 4Q20 vs. 1 year ago and 2 years ago. We also see the average 30-year mortgage rate over these periods and the corresponding average home payments below that. Here we can see that in general builders have done a good job of keeping their homes affordable and have not raised prices anywhere near as much as existing home prices have gone up or as much as they could have given the circumstances. We think this reflects the change in product transformation towards affordable homes as well as a conscious effort to focus on maximizing pace, not price, this time around to maintain affordability high and to leverage their fixed costs – interest and SG&A which maximizes earnings and returns.

Figure 8. Average order prices and average mortgage payments over the last 3 years. Source: Builder press releases and HRC.

Valuations are attractive. The builder stocks are trading at some of the lowest P/E’s that we have ever seen in the 20 years we have covered this sector.  On a P/E basis using our 2021 EPS estimates we believe the builders are trading at 7.2x.  Small caps are trading at 3-4x. Similarly back in Feb-03, the builders were trading at a very low P/E of 5.6x.  Having lived through the housing bubble and crash it seems understandable why many investors may be apprehensive to get involved here.  Especially if they believe that we are in the 11^th inning of the cycle that began in 2011.  That cycle was focused on move-up homes and high quality buyers as builders were hoping to avoid getting involved in the entry level sector which led to the chaos last time around.

Yet we think there are many differences worth noting.  We are not saying that this could not eventually turn into a bubble.  But even if it does, it would seem to us perhaps that is still 2-3 years out into the future and we think the stocks could potentially go up significantly from here before they ultimately peak.

What is different this time?  The most dangerous phrase in investing is “It’s different this time”.  Yet we believe that there are several the key differences this time around that could allow this boom to be more sustainable and not necessarily turn into a housing bubble.

1. The buyers appear to be end users.  It seems to us that the majority of the buyers this time around are end users.  The bulk seem to be either millennials buying their first home or baby boomers downsizing to a smaller home. Investors who want to buy a new home have to put down a substantial down payment and many builders discourage sales to investors.
2. Mortgage lending is still sane.  As far as we can tell most mortgage lending is still pretty sane. Buyers have to have a job to qualify for a mortgage and need to come up with a down payment – 3.5% for an FHA loan and 5% for a conventional loan.  The only 0% down programs are VA and USDA, but these are not the bulk of sales. Investors need to put down at least 20-30% to buy an investment property.  Most buyers need to have a FICO score of 680+.  Most builders still say their average FICO is in the low 700’s.  While none of this guarantees that buyers won’t eventually default or that home prices can’t go down, at least it seems to remove the main reason why we had the housing bubble in the first place. As long as the mortgage market remains disciplined and does not go back to its old ways this should help to keep the housing market in check to some degree.
3. Builders have strong balance sheets.  Most builders today have a much better balance sheet than at any time in their history.  They have lower leverage and lower cost of debt.  The debt maturities are staggered and for most are far out into the future avoiding near-term liquidity issues. This should help them weather any slowdown we eventually face much better.
4. Builders have more experience and better business models.  Twenty years ago builders were still growing to grow. They were expanding into new markets. They had never seen a housing bubble before. Many were caught up buying land and paying high prices for that land at the peak of the cycle.  We believe this time around having the benefit of having lived through the housing bubble they are now better prepared to know what to look out for. They are being more cautious in the way they structure land deals and the assumptions that they make. They realize they have to buy land to replace the communities that are selling out, but they also understand that they have to watch what they pay for it and that they should not build in price increase assumptions. Builders are increasingly using land options to control land. This enables them to walk away in case the market changes or renegotiate their takedowns and what they are paying for finished lots.  This should help minimize the level of impairments down the road should the market slow down sharply.  Many are now focused on building more affordable homes and have more scale than at any point in time before. They realize that while it is nice to increase prices, they can achieve a better ROIC on their investment by maximizing the sales pace, not the price.
5. Price increases for new less than used.  While we recognize that low supply and strong demand leads to high home prices, so far it does not appear to us that builders are raising prices to the same degree that we are seeing existing home prices go up. Most builders realize that keeping their prices affordable is the key to maintaining a high sales pace. Most builders are still replacing higher priced communities with lower priced communities. We are still seeing them introduce lower priced affordable communities.  Thus we feel that they are not (yet) falling into the trap of raising prices every week.  Perhaps that will change soon, but we are closely monitoring this.  We believe that raising prices as a way to try to slow down the sales pace and boost margins is a dangerous exercise.  We have seen this many times in the past and it never ends well.  We believe most builders are being more careful this time around not to repeat the mistakes of the past.  But we also recognize that competitive pressures exist and that when there is limited supply the answer often times seems to be to simply raise the price.

2003 vs. 2021.  Until CCS reported last week, most builder stocks were not reacting positively to strong 4Q20 results. Then CCS went up 20% last Friday on their good news.  This took the builders to a new high of $121 billion. Yesterday we saw most builders follow suit after rising last week closing at another new high of $125 billion.  Perhaps investors are finally starting to realize that the results the builders are reporting are not some type of “peak” but perhaps are indeed sustainable.  Perhaps they are starting to see that the stocks are very cheap on either Price/book or P/E compared to the returns they are generating and compared to our EPS estimates for 2021 and 2022.  It feels to us as if we are at the beginning of what could be a very powerful rally that could take the builder stocks to new highs similar to what happened in 2003 after the 4Q02 earnings season ended.  We think it is very possible that we could see builders go up 50%-100% between now and year end.  And then possibly go higher from there next year.  We believe the housing market will remain strong at the very least through 2023 and possibly until 2028 based on rising demographics of millennials and baby boomers.  We say 2023 because that is when the Fed has signaled they plan to keep interest rates low.  The only unknown is what will happen to home prices between now and then.  It seems they will only keep going up which will prompt buyers to buy now and not wait because the longer they wait the more they will have to pay later.

Conclusion:  We are optimistic about the future of the housing market.  We believe we are in the 3^rd inning of a new cycle that began in 2019 focused on affordability.  We believe builders can sustainably build between 900k-1 million new homes per year for the remainder of this decade.  We just hope that builders will stay focused on affordability and not go back to simply repeating the mistakes of the past.  We are optimistic that perhaps this time it could be somewhat different and hopefully this is not the beginning of a Housing Bubble 2.0, but the beginning of an awakening on the part of investors where they give more credit to the fact that the housing market is strong and that the builders have learned from their mistakes from the past and are eager to not repeat them. We believe the volumes we are seeing are sustainable based on demographics. We believe the margins are likely to go up this year a bit, but we are not necessarily assuming that will continue indefinitely. Eventually, they will go back down a little based on what happens to land costs. But even if that is the case, the operating margins should continue to improve as the builders become bigger and more efficient. Thus we think the earnings are sustainable for a few years. And we think investors should value the builders based on that. Thus we continue to recommend investors buy the builders.

Figure 9. Homebuilding Index still seems to have much upside left over the next few years. Source: Yahoo Finance and HRC.

Selling your home is a big decision It’s likely the most significant investment you’ve ever made. You’ve probably been living in your home for years, creating many memories in the process – making this both a logical and emotional decision. A skilled Realtor will be able to assist you in navigating all of the obstacles and issues with your decision as you go through the process of listing your home. The only question is, how do you know what to look for when selecting an agent to sell your home? The answer? 10 Questions to Ask your Real Estate Agent When Selling

Top Question To Vet Potential Realtors

Any potential Realtor that you meet should be asked the following questions. The answers will give you a good idea of their experience level, their business personality, and allow you to form some important first impressions.

1) What Does Your Sales History Look Like?

You may think this is a little too direct, but remember this is someone you are considering hiring to handle your largest asset – and they will be paid handsomely for doing an excellent job. You have every right to know their track record and success level over the years.

Additionally, pay special attention to performance over the last 12 months. While there isn’t a reason to be alarmed if you find they have had some dry patches in their career, their performance over the last 12 months will be quite telling. In most instances, you can expect to have your property perform the same as other, similar properties, have under your Realtors’ portfolio in the last 12 months.

2) What Methods Do You Use To Determine Property Listing Prices?

You want to make sure that you are offered the highest price for your home a buyer is willing to pay. Any Realtor worth their salt will be ready to walk you through a CMA, or Comparative Market Analysis, to break down the valuation of your property in detail for you. You also want someone that will go to bat, and understand the vast negotiating games that are played on all sides during a real estate transaction. Pricing your home too high, will mean fewer (or no) offers – a waste of everyone’s time. On the flip side – pricing it too low – will mean you’re leaving thousands of dollars on the table.

3) Can You Give Me A Detailed Expense Estimate?

Since you are hiring them, you will be paying them, and you should know how much it will cost you before you decide. Some unscrupulous Realtors may try to get one over on unwitting clients by excluding closing costs on their initial price estimates.Ensure that any quotes you are given include the closing costs.

4) How Do You Earn Income?

Again, you may feel this is a little too direct and upfront. However, the way agent commissions are calculated will determine how they treat you. Now, that does not mean that they will treat you poorly necessarily because they make commissions off of you. Ideally, commissions incentivize your agent to perform their best  for their clients, but this is not always the case. Getting a break down of their fees and their commissions will give you an idea of where they will be putting their priorities.

5) How Would You Best Market My Property?

Asking about the techniques they use when marking properties allows you to gain insight into the thought processes behind the approach they will use to help sell your home. A seasoned real estate agent will have a multi-pronged approach to getting your home sold. With new techniques and marketing mediums being used every day it’s also an exciting way to learn about the process and exactly WHAT you’ll be paying for.

6) What Is The Best Way To Keep In Touch?

You do not want to be stuck in a situation where you’ve got a property in the process of being closed on, and you are suddenly unable to reach your agent. Most agents will have a personal cell phone and a business cell phone.If they are unwilling to give you a business cell phone number, you may want to look else-where. Business cell phones allow you to reach them whenever it’s essential, easily. Also make sure they’re willing to communicate the way you prefer.

7) How Quickly Do The Properties In Your Portfolio Move Off The Market?

As a homeowner, listing your home for sale for the first time can be a nerve-racking experience. Waiting for months with it on the market and not even getting an offer is even more likely to cause you to have distraught feelings. Having the Realtor give you realistic expectations before you list your property will alleviate some unnecessary anxiety. In many areas – 90-120 days or more is typical, in others, 3 days – it all depends on location, your specific home, and your collective expectations and pre-negotiation on listing prices. Selling a home can often take some time. There isn’t anything wrong with that.

8) Are There Any Previous Clients I Can Speak With Of Yours?

You asked earlier about their track record, but anything they told you requires you to take them at their word. Speaking with previous clients will give you the best glimpse of the public’s perception of the Realtor, and your possible experiences if you chose them to help sell your home.

9) Do You Have Any Advice For My Local Real Estate Market?

Each area will be a little bit different. The best Realtor to choose when marketing your property will have experience marketing in your local area. They will know the local market and demographics. Then use that to best draw the attention of qualified buyers to your house once it’s listed.

10) Do You Specialize in My Particular Community or Home Type?

Different properties have different needs. What works for a rural residential lot, is not going to work for a larger home in a nice gated community. Often times the best real estate agents have diversified experience, but also have existing experience in exactly the kind of property or community you’re in – make sure to ask them if that is the case and what they do specific to your situation.

Picking The Right Realtor: Closing The Deal Has Never Been Easier Some people have been terrified by horror stories told by their friends who had terrible experiences working with inexperienced or unethical Realtors when they tried to sell their home.Do not be dissuaded from a vocal minority’s history of bad experiences. As long as you know how to vet your Realtor, properly, before you commit, they can help make selling your home easier than ever.

Looking for a way to make use of a vacant property, or considering dipping your toes in real estate investment? If so, turning your property into a vacation rental is a great move. Vacation rental properties allow you to take advantage of your property’s best features without some of the more complicated elements of the long-term rental relationship.

If you’re interested in getting started on this journey, Kevin Bartlett is here to help. Start with this guide for how to prep (or find) a home, market it effectively, and get into the swing of rental management:

What Makes a Good Vacation Rental?

Whether you’re evaluating a property you already own for its vacation rental potential, or scouting out potential options on the market, you need to start with a sense for what makes a property a good candidate for a vacation rental. The first thing you need is a great location. A house out in the middle of nowhere, far from any tourist attractions, isn’t likely to grab anyone’s eye.

However, a home in an attractive tourist town such as Cape Coral is a lot more likely to get vacationers’ attention. You’re in good luck if you have or find a place like this where tourists can easily hit the beach, kayak with manatees, or visit water parks and other attractions. These kinds of locations are, far and away, the more likely pick for most vacationers.

In addition to a great location, you need a home with plenty of charm and, ideally, great amenities. Boost charm by giving your property a fresh coat of paint or improving your landscaping. You want it to have curb appeal because, like selling a home, that first look of your property can make or break your listing. Follow up that initial good impression with plenty of amenities such as a hot tub or game room, and you’re sure to grab peoples’ eye.

Practical Preparations

You should also take some steps to make the work of owning a vacation rental a little easier on yourself. Install a coded key lockbox so you don’t have to interact with guests directly unless necessary. Having a home security system installed can make your guests feel more secure, as well as keep your property safe between visitors.

You should also take measures to make cleaning up as easy on your guests as possible. Keep provided items to a minimum. Most guests will expect a kitchen with some basic cooking supplies, but don’t go above and beyond.

Use a simple organizational scheme to encourage guests to put things away properly. You should also provide dish soap and instructions to use the dishwasher, if applicable. After all, most guests want to leave a property in good condition, but many will need some help to achieve it. Make it as easy as possible on your guests, and you’ll have less to deal with, too.

Common Pitfalls

Before you dive full-tilt into becoming a landlord, it’s important to recognize the cons, as well as the pros. If your area is saturated with vacation rentals, you may not have the location edge you could have otherwise. Moreover, many vacation rental owners have to deal with their properties getting damaged, and often have little recourse — winding up having to pay for the damage themselves. This is a great investment for someone with the time and energy to make it work, but it’s important to consider the challenges before you commit.

We hope this article has helped you figure out how to get started in running a vacation rental property. It’s a great way to make good use of your existing property, or to dip your toe into buying an investment rental. For the right owner, this is the perfect way to make some extra income — not to mention, have a vacation home you can use whenever you’d like!

Looking for a guide to buy the perfect investment rental property? Contact Kevin Bartlett today! 239-826-1891

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