HOT MARKETS: TAMPA
Going Up
Most rental houses on the market are being offered by hedge funds. Recently, one of my business associates decided he wanted to live in my community. He was beat out time and time again to rent a nice house in a nice area. He found one in my area for $3,500 per month with one-year rent to be paid in ad- vance. The Realtor handling the proper- ty management advised us at 5 p.m. that day that he had another party willing to pay an even higher amount and a full year in advance. It was a good thing we developed rapport with the property manager as he allowed my friend the opportunity to match that amount, and he did. Can you even imagine that? He
paid $43,000 upfront to rent a house for one year and that was the only way he could get it. The rental market is hot! The rents are up, and so are the house prices. The only way to acquire properties in this market is to be resourceful by gener- ating leads to find motivated sellers, where others aren’t looking. On average, houses are spending 5.3 percent fewer days on the market than this time last year and house prices are up an average of 11.8 percent. Generically speaking, Florida as a whole is fairly expensive state in which to do business. Just like Texas, Wash- ington, Nevada and Delaware, there are
no state income taxes in Florida. Thus, the state needs to generate revenue from other sources that impact real estate investments. Property taxes and recording fees are much higher here than in a lot of other states. For example, to record a deed on the purchase of a $100,000 house, it would cost approximately $2,000 just to pay the transfer tax. To compare, in Georgia, it’s less than $150! Addition- ally, Tampa is on the water, which has a much higher property insurance cost, which continues to increase every year. We like this market for flipping and retailing to prospective homeowners, but it’s not my favorite market to buy
and hold properties for long-term cash flow and appreciation. •
In the Tampa area, rising rents and home prices mean investors must be resourceful.
RJ Palano is the acquisition director of BuyCashFlowProperties.com, a Tampa, Fla.-based company that
by RJ PALANO
primarily provides turnkey houses for investors in the metropolitan Atlanta and Tampa Bay areas. His property management experience spans 35-plus years, and he has been involved in more than 3,000 real estate transactions in 12 states and more than 50 cities. Contact him at RJP@BuyCashFlowProperties.com or 813-495-3006.
T he single-family house business in the Tampa area has investors scrambling for scraps for house purchas- ing opportunities. The multiple listing service (MLS) and mortgage foreclosures are where most investors begin their search. Multiple bids on various oppor-
tunities put sellers in the position to sound the bell for highest and best offers. The hedge funds are the culprit that has driven most investors to the sidelines, and the hedge funds are still buying. The best demonstration I can give you for this is the house rental dilemma.
20 | INVESTOR REVIEW
SEPTEMBER/OCTOBER 2016 | 21
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