Written by BiggerPockets Investing Question of the Day
Mike from Sacramento asked about some specific locations and strategies about absentee investing in the central Florida area.
While a lot of the answers covered specifics, I went more “general area knowledge” as cautionary advice.
1 – Know what you are comfortable with.
If you understand SFH (that’s “Single Family Homes”) but not HOA (Home Owners Associations), then avoid HOAs.
It seems simple, but it’s really easy to get Shanghaied in this area.
2 – Don’t chase money.
There are plenty of good deals. Focus on your strengths.
If you chase a Cap Rate, your focus will shotgun into 1000 strange scenarios.
3 – Learn what you don’t know that can burn you.
This ain’t a generally homogenous “city and suburbs” scenario.
Florida is the US version of Australia. Everything can kill you.
- Freshwater?
- Gators. Including Golf Course communities.
- Saltwater?
- Sharks.
- Land?
- Sinkholes. They will literally swallow you up while you’re sleeping. (See more here: https://www.abcactionnews.com/…)
- Coastal?
- Hurricanes.
4 – If you don’t know these things well, someone will sell you swampland.
Know what you prefer, know what you don’t want to get involved with.
Example: Pasco and Hernando Counties (north of Tampa Bay) have a lot of sinkholes.
Sinkhole properties sell for less money, but have insurance problems. Generally, you can manage a higher yield on them, though.
Are you going to be comfortable with renters sleeping on top of a time bomb?
Each area has it’s “thing”. It won’t apply to every property. Some are good things, some aren’t, most are a mix.
But definitely understand the risks in each location before digging deeper. Then you can focus on the solid options for you.
There really are some fantastic opportunities, but the market is extremely complex to an outsider. What works in Peoria (Illinois) ain’t going to cut it here.
Final Note: You never have to budget for snow removal services in my area.
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