Florida is an attractive real estate market, especially for international investors who are looking for opportunities to own real estate in America. The cost of entry is much lower in Florida than it is in major east coast and west coast cities. There are a number of different cities and regions in Florida that offer desirable neighborhoods and homes. And, the local economy is strong, attracting both tourists and vacationers as well as long-term residents and retirees.
However, tapping into the Sunshine State’s market potential requires more than just capital; it demands local knowledge and expertise. If you’re an international investor who wants to buy a Florida property from outside of the country, there are a few challenges you’ll have to prepare for and some local intricacies that might easily be missed.
Working with a strong property manager is essential for international investors.
Let’s talk about how you can make your global investments a success when you invest in Florida real estate from another country.
Decide on Your Investment Goals: Short Term or Long Term Rentals?
An investment property in southwest Florida is usually going to fall into one of two categories. Either it will be a long term rental, with your local tenant signing a lease agreement of a year or more, or it will be short term rental, which is often the same as a vacation home. Those stays can last from a single night to a few months.
Short term rentals have exploded in popularity, especially in markets like ours. People who want to visit Florida might choose a vacation rental instead of a hotel. As an international investor, you are likely wondering whether it’s better to rent out your home to long term tenants or short term, temporary tenants.
There are pros and cons to owning either type of rental property, and the ownership experience is different in each case.
- Long Term Tenants
Long term rental homes have one singular advantage that’s difficult to beat: stability. The consistency of your rental income with a long term lease will ensure that tenants are in place for a year or longer. You can budget more accurately because you know exactly how much money you’re earning over a set period of time.
Your return on investment will depend on raising your rents every year, which is easy to do in Florida, where there is no rent control. You also want to keep your maintenance and vacancy expenses low so that you don’t lose money over the span of your ownership.
- Short Term Vacation Homes
Short term leases have their own advantages. You can expect to earn higher rents on a weekly or nightly basis when you have a tenant who is renting a vacation home or looking for a month-to-month situation.
You also have the benefit of flexibility when you’re renting a home in the short term. Maybe you’d fly over to America and use the home yourself for a few weeks every year. You can do that when you don’t have a long-term tenant in place. Many people invest in property in Florida to use as a vacation home or a retirement home. If you want to spend six months out of the year in your investment home, you’ll have to rent out your property to short term tenants.
Understanding the Florida Market Dynamics and Competition
Florida’s appeal to real estate investors is multi-faceted; it’s not just about the warm weather and beautiful beaches. The state boasts a robust economy, with a focus on sectors such as tourism, agriculture, international trade, and aerospace. Additionally, Florida’s tax laws are favorable for investment, with no state income tax and a pro-business climate. You’ll find you spend less making an investment in Florida, and that’s attractive to many international investors who are looking for incentives before they buy.
Local statutes, property taxes, and zoning regulations can significantly impact your real estate investment’s profitability and viability. And, each Florida community is different. For example, rental policies governing vacation properties in Miami might differ vastly from those in Orlando. International investors need to be acutely aware of these local nuances to make informed decisions. This is where your property management partner will be especially valuable; you’ll need someone to keep you compliant and to offer advice and information even before you buy.
Florida is a melting pot of cultures, which can affect buying trends, property values, and rental demand. Understanding cultural influences in different regions can help investors target properties that cater to specific demographics and maximize their returns.
Helping International Investors Navigate the Florida Real Estate Market
To successfully invest in Florida real estate, establishing relationships with local experts is absolutely essential. Local real estate agents, attorneys, and financial advisors can provide invaluable insights and guidance on market trends, legal matters, and investment opportunities.
Property management relationships are especially important.
The most important thing an international investor needs is a strong local presence and reliable local experience. The rental market in southwest Florida and even throughout the state is a lot different than it is in other places, and an investor from elsewhere will depend on an expert who understands:
- The real estate trends
- The desires of local tenants and vacationing guests
- The maintenance landscape and local vendors
- The legal requirements and industry best practices of renting out a property here
When you have a property management partner leasing, managing, and maintaining your investment, you won’t have to worry about long and expensive vacancy periods. You won’t have to worry about maintenance problems or non paying tenants.
Our system is designed to collect rent on time. We also enforce the lease agreement and maintain compliance with all the state, local, and federal rental laws. With short term rentals, we take care of guest relations, cleaning and preparing the property during each turnover, and being available for anything that may need attention during their stay.
Your property managers are in Florida, and we’re here to help with everything from leasing to inspecting to maintaining your home.
International Investors Need Good Technology for Communication and Efficiency
Investors living in another country want to stay connected, not only with their investment properties, but with the people who are managing them. You’ll need your management partner to facilitate that with outstanding technology and proactive communication.
Our team at Realty Group of Southwest Florida is experienced working with international investors. We provide access to an online portal where you can check on how your property is performing physically and financially. There, you can view inspection reports with photos, check in on any maintenance requests that have been submitted, and look for things like rent payments and deposits. Our international owners appreciate the transparency and attention to detail this system provides.
Updated accounting statements and reports will be provided, as well as any information you might need about tenants moving in, tenants moving out, preventative services like pest control and landscaping, and anything else pertaining to your investment.
We aren’t going to bother you with every detail that we’re taking care of. However, our technology and our commitment to communication allows us to keep you connected to your investment.
Before You Invest: Conduct Thorough Market Research
Be willing to understand the Florida market and how it will impact your investment. We’ve talked about choosing long term or short term rentals. Maybe you’ll even want to invest in both.
Whichever direction your investment goals take you, it’s essential for international investors to conduct diligent research to understand market conditions, price trends, and future development plans within different regions of Florida.
Reliable data sources include:
- Local property listings
- Real estate reports
- Government publications
You likely have access to some good information – otherwise you wouldn’t know what a hot market Florida is. Make sure you continue to watch what’s happening. Before you buy a property, you want to have a solid understanding of what type of rental will work best, who your tenants will be, and how your management company will be able to leverage those trends to help you earn as much as possible in the short and long term.
Economic factors such as employment rates, infrastructure projects, and population growth can influence real estate values. Keeping abreast of these developments can help investors make strategic investment moves.
Florida remains a large real estate market with nuanced regions that carry their own set of opportunities. Real estate investors locally and across the world are interested in buying and renting out property here, and the key to realizing as much profit and potential as possible lies in partnering with local experts who understand the market’s rhythms.
If you’re an international investor who is even thinking about buying real estate here, let your first course of action be to partner with a great property management company. Choose someone with the technology and the experience to facilitate a successful investment experience.
We would be happy to talk more about working together. Please contact us at Realty Group of Southwest Florida, and we can discuss what you’re looking for and what you hope to accomplish.
