This issue begins a series of questions about real estate on the Emerald Coast answered by successful professional realtors. Each issue this summer and through the fall will have one frequently asked question that our group of professional realtors will answer from their own perspective and experiences. This issue’s realtors are Brad Shouts, Co-owner of RE/MAX Southern Real Estate, and Jerry Sullivan, Jordan Pehowic and Kim Moore of Century 21 Blue Marlin Real Estate. Brad has been a licensed Real Estate Broker in Florida and Alabama for over 22 years and is a member of the RE/MAX Hall of Fame. Jerry Sullivan has been involved in Commercial and Residential Real Estate for over 14 years including management, construction and ownership of a successful real estate company here on the Emerald Coast. This issue’s question is:
Location, Square Footage and Amenities… What Should I Be Looking for in an Investment Property?
By Brad Shoults
RE/MAX Southern Realty
Several factors should be considered when looking for an investment property in our area. Also, the current and future goals that the buyer has for the property need to be included in the equation. Is it going to be used strictly as an income generator initially and then morph into a family retreat? In most scenarios, the primary factors are location and price. If your goal is for the property to generate short term income, then you have to choose one that is within budget and can be easily marketed to travelers.
The old adage “location, location, location” is still king. While beachfront is preferable, it’s not always within budget, or necessary to generate income. So, compare a property that offers beach access and amenities in order to counterbalance not being directly on the water. Size also plays a role in the process, and understanding the rental business can help guide owners to the area’s current rental inventory and demand by travelers. Then, take a long-term view of the property you want to buy. What’s nearby and how might that develop over a period of years? You want your investment property to be close to amenities, attractions, and gathering areas.
Next, you’ll need to ask these questions on a given property: what are the monthly fees, is the Homeowners Association solvent and are its reserves fully funded, and what is the projected annual income based on past rental history? This income based approach allows you greater control and peace of mind when it comes to the valuation and financing.
As an agent, I take into account as much as possible before deciding which properties to recommend and show. After answering these questions, we can narrow your search to only properties that leave you with the greatest potential to generate income. There is not a perfect science to the selection process, but this list should help in the search.
By Jerry Sullivan, Jordan Pehowic& Kim Moore
Century 21 Blue Marlin
Parallel to other types of investments, real estate investing involves a comparatively favorable risk/reward profile. When it comes to investment properties, Century 21 Blue Marlin’s agents have several recommendations on what to look for when shopping investment properties.
“Investment properties come in so many different packages,” says co-owner, Jerry Sullivan. “When it comes to residential investments, location and amenities are important. We work closely with a number of owners who have invested in short term rental properties for their potential rental income in our highly-trafficked area along Florida’s Emerald Coast. When we help clients find an investment property, we suggest finding properties adjacent to the beach, highlighting beautiful views or surroundings, accessibility to property amenities and management. Management is one of the major factors many people overlook, but while you are away from the property it is important to have a management team that is making sure the property is being maintained to its ideal pristine condition. Additionally, this is key for potential resale values.”
“Choosing a great property management company should be a priority for buyers when considering purchasing an investment property here on the Emerald Coast,” says realtor Jordan Pehowic. “Many buyers live hours away and should consider a property manager who will ensure the property will be taken care of and rented to its maximum potential while they are away. Owning an investment property comes with many stresses and employing a property management company places some of those stresses on the property manager rather than the owner, which allows the owner to enjoy the property more and worry less.
“When looking for a client, Team Moore looks for return on investment (ROI) as it’s key for someone looking for a great investment property but location, amenities, views and accessibility to the beach are also key factors,” says realtor Kim Moore. “While investors want to make a profit they also want a property that they themselves and their families will enjoy for a great vacation. To make sure your rental property will bring in top dollar, it’s important that you keep your appearance updated and keep up yearly maintenance on your property.”