Florida Real Estate - rental

[FiguringItOut]

A friend asked for help to brainstorm a potential Florida real estate purchase.

Friend wants an apartment that can be rented out with management company for few years and then potentially move into the apartment later.  The goal for the apartment while rented to pay for itself (mortgage, maintenance, fees, etc) with leftover profit as a huge plus.  Requirements are follows:

- On the coast near a beach (doesn't have to be on the beach, but close), not inland
- Apartment, not SFH
- Close to international airport
- South of Florida - nothing above Tampa
- 2 bedroom/2 bath at a minimum in a nice building (not luxury, but nice, well maintained, some amenities, etc)
- Budget of $120K max (plan is to put 20% down, so $24K cash)
- Robust diverse social life (multi ethnic culture, restaurants, social events, performances, etc)

Neither of us has experience with real estate.  Friend wants to have a permanent place in the US as home base while traveling across country and abroad.  Friend is planning to be working for about 5-6 more years (NYC) and then travel for a while before settling down.  So the idea was to buy and rent for now, while still working, and then either continue renting or switch to part time renting while traveling so there is a place to 'come home to'.  Friend is mid-40s now.  So not looking for spring break places, but not retirement communities either.

Do you have any suggestions on what areas to concentrate looking?  What things do you think should be considered?

[rothwem]

You can probably get some good deals on Mexico Beach now if you hurry. 

[FiguringItOut]

You can probably get some good deals on Mexico Beach now if you hurry.

Thank you, but that's too far north.
And no, nobody is in a harry.  Just working on research.  I think my friend's timeline is between now and the end of of next year, so a bit over a year, ideally.

[LiveLean]

This sounds like a colossal headache for little to no upside. You or your friend have no experience in real estate and want to be absentee landlords from 1,000 miles away in an area in which you know little. "Anywhere South of Tampa that's on the water." WTF? I can put you in Fort Pierce or Punta Gorda, lovely places but they're not going to meet your NYC expectations, I'm guessing.

Nothing wrong being NYC types -- but I've seen many NYC friends move to Florida hoping to replicate all of this culture and everything you have in terms of the NYC lifestyle only to be disappointed. Maybe to some degree in parts of South Florida, but that's it.

You'll also pay massive property taxes, which is the cost of not having state income taxes. But you'll pay it 100 percent since you're not a full time resident and thus can't at least take the homestead exemption. You'll also pay massive property insurance, cost of living in a hurricane area.

Other than that, Mrs. Lincoln, it's a helluva play.

[FiguringItOut]

This sounds like a colossal headache for little to no upside. You or your friend have no experience in real estate and want to be absentee landlords from 1,000 miles away in an area in which you know little. "Anywhere South of Tampa that's on the water." WTF? I can put you in Fort Pierce or Punta Gorda, lovely places but they're not going to meet your NYC expectations, I'm guessing.

Nothing wrong being NYC types -- but I've seen many NYC friends move to Florida hoping to replicate all of this culture and everything you have in terms of the NYC lifestyle only to be disappointed. Maybe to some degree in parts of South Florida, but that's it.

You'll also pay massive property taxes, which is the cost of not having state income taxes. But you'll pay it 100 percent since you're not a full time resident and thus can't at least take the homestead exemption. You'll also pay massive property insurance, cost of living in a hurricane area.

Other than that, Mrs. Lincoln, it's a helluva play.

This is very valid point.  I'll pass it on.
I personally have nothing to do with this, just helping a friend to brainstorm the idea. 

[partgypsy]

"Other than that, Mrs. Lincoln, it's a helluva play."

lol

All of this would make more sense if he actually had a place he visited and LOVED so much he wanted to spend a majority of time there. What this person has right now is not so much as a business plan but an afternoon daydream. My Dad had considered at one point moving to Florida. His brother has a condo there and he traveles there every year to stay.  He had a short list of places he actually visited and knew what they were like based on knowing people who lived there, but still there was enough reservations that he didn't end up pulling the trigger.
It may not be like this now, but I have a co-worker who lived in Florida, moved out before the 2006 meltdown. At least at that time, there was a lot of shady things going on with real estate. I would personally not be involved in Florida real estate from arms reach, too many things to go wrong or over pay. 

[rothwem]

At least at that time, there was a lot of shady things going on with real estate. I would personally not be involved in Florida real estate from arms reach, too many things to go wrong or over pay.

There's a lot of shady real estate stuff EVERYWHERE.  That's part of the reason I always roll my eyes when someone tells me they're looking at "turnkey investing" in Memphis or Cleveland while living in NYC or San Francisco.  There's a good chance you'll be robbed blind if you don't keep on top of your shit.  Yeah, if you spend the time to build a solid network, and do your homework you'll have better chances of success, but 99% of people don't do that.  Hell, the subject of the OP can't even post in a forum for themselves.  They gonna get got. 

[partgypsy]

At least at that time, there was a lot of shady things going on with real estate. I would personally not be involved in Florida real estate from arms reach, too many things to go wrong or over pay.

There's a lot of shady real estate stuff EVERYWHERE.  That's part of the reason I always roll my eyes when someone tells me they're looking at "turnkey investing" in Memphis or Cleveland while living in NYC or San Francisco.  There's a good chance you'll be robbed blind if you don't keep on top of your shit.  Yeah, if you spend the time to build a solid network, and do your homework you'll have better chances of success, but 99% of people don't do that.  Hell, the subject of the OP can't even post in a forum for themselves.  They gonna get got.

that's def true. Arms length real estate investment, where you don't know markets and the locations, is a recipe for disaster. I remember when we refinanced our house, the first appraiser who appraised it lived in Raleigh 30 minutes away, and their appraisal was off by 100%. Imagine investing in a property where your evaluation was off by 100%. Not trivial. 

[cchrissyy]

I don't think it's worth the effort to try to find a place that is a profitable rental AND a permanent home base.
 
First, restricting the rental search to "places I would personally like to live" severely limits the options and steer a person away from good choices.

Second, how can anybody really know where they will want their permanent home base to be this many years in advance? You're not talking about going back to a hometown or college town or a very familiar beloved travel destination. You're talking about picking a whole new place. Odds are it won't be a good fit. And no offense to your friend, I just think none of us could pick a place off the map right now and have it be the right choice 5-10 years from now when we show up and have it stay true for years or decades thereafter. And that is *especially* true since your friend plans to travel the world a bit starting in 5 years. They will discover so many new places, some will be good or bad fits for them, and along the way somewhere may be the best fit for a permanent home. And an apartment in Florida will be a rental forever, which is fine, except back at the start they selected it on attributes that were personally appealing instead of a pure focus on business reasons.