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[00:00] are you looking to buy a property soon if you're looking to invest in Tampa Bay St Pete Lakeland or Sarasota there are five things that you want to check out and know before you make that first purchase before you even start offering on a property really let's get into it hey guys I'm Dylan investor agent in
[00:18] Tampa Bay I work with a lot of homeowners and investors looking to buy their first property looking to get into their first home maybe to use that home as a uh rental property in a couple years so making that first purchase is very important because you don't want to buy in the wrong spot you don't want to
[00:35] buy in an HOA that won't allow renting entirely um so that's a little bit more about me five things you want to look for when you're when you're getting into investing this is not going to blow anybody's Minds if you're if you've already invested in one property really but if you're just getting into it maybe
[00:52] even you've invested in other states but you haven't invested in Florida or Tampa specifically so I don't know maybe this is helpful to you taxes Florida does not have state income tax however it do have pretty high property tax and it seems to go up right with inflation almost taxes are pretty high I have found that for
[01:10] every $300,000 on a residential property you're looking at about 5,000 annual and in taxes um that's not a hard number somebody's probably going to comment in the section here uh down below that uh oh you're so off you're so wrong you don't know what you're talking about
[01:26] I've run run through a lot of properties and one way you can to figure out the estimated taxes for your Target property is to go on the county at Appraiser's tax um website you can click the button somewhere on their website I know Hillsboro has one Pasco has one pelis has one pulk has one manity has one but
[01:44] it's very annoying and frustrating to use Sarasota I believe does have one as well anyway you can go to these websites type in the address type in what the new purchase price is going to be and they'll give you an estimated annual tax range or dollar amount little tip for you insurance insurance insurance has
[02:00] risen substantially over the last 2 years right really ever since hurricane Ian $112 billion in Damages the costul hurricane in Florida history that is recorded of course so um actually probably is the CEST hurricane in history because we have the most developed Florida in history but
[02:21] anyway um insurance is pretty expensive um it's hard to predict right now the closer you are to the goal for the bay the closer you are to potential storm surge the CL higher insurance rates are going to be um we were using a rough gauge of half per um of the purchase price a year um it's probably closer to
[02:42] 1% of the purchase price now so if you have a $300,000 home um if it's older or you know if it if it's newer and it's uh not in a flood zone and it meets a lot of new code it's probably going to be a lot less than 3,000 a year but it could be up to $3,000 per year depending on where you are in the Tampa bank anyway
[03:00] um talk with an insurance agent who can give you an exact quote rinse um not every agent can do this I don't even recommend you go on to Zillow Zillow fun fact has a 20% swing up or down from what the number they give you is they say that it's fine print it's it's public knowledge really so you can't
[03:18] fight them on it but if they say your rents are 2,000 it could be 1,800 actually that's 10% it could be 1,600 or it could be 2400 uh realistically so they give you algorithm tries to do better and better but they do have a plus or minus 20% swing in the zestate that they give you so find an agent who
[03:40] can pull comps for you off Zillow find a property manager who has experience in the area um you know I've worked in property management for 10 years so I can tell you what I do um I don't I think some agents go to Zillow I think some agents use third party platforms or algorithms like rentometer or um there's
[04:00] like two more there's one on Bigger Pockets I have found that occasionally they're correct but they actually have some pretty wild swings as well and they don't factor in certain things like if you have a duplex it may be pulling from single families if you have a single family maybe it's pulling some duplex
[04:14] comps maybe it's pulling a condo comp like they're not they say that they have these different categories for single family duplex condo I have just found that they just seem to be very inaccurate and unreliable so you can use them if you want but um if you want to be sure when you're buying a property
[04:33] the rents are one of the most important things on a rental property just get a second opinion from a real person who can listen it takes me work it's work to go through and do this for like 10 properties that you're going through so like don't get me wrong I don't like love doing it but I want the people that
[04:48] I work with the clients that I work with to know a conservative number of what to expect and uh you know ask for a range ask for a worst case number and then ask for the number that they're going to list it at and hopefully there's a a decent range and hopefully the worst case number is a um number that you're
[05:07] comfortable with uh ultimately the fourth thing that you're you're going to want to know going into this is reserves now the property that you get this can vary quite a bit on um a lot of people will average 15% 5% for vacancy rate 5% for capex and 5% for maintenance repair and I just realized some people probably
[05:29] don't know what capex is and capital expenditures are going to be your roof your HVAC your water heater softener um larger things Plumbing that just degrade over time that don't really necessarily add value to the property they're not cosmetic updates they're upkeep to the property so know what your reserves are
[05:50] um if it's an older property for an older property you probably going to want to keep a it's a little bit Case by case right vacancy is not necessarily it's it's uh more market and and specific so I would keep vacancy around 5% personally um maintenance really depends
[06:10] on how new the property is if it's very if it's brand new you put like one or 2% for the first few years um if it's older it would it could exceed 5% of the rent and then capex how old is the is the roof you know is is it brand new is the AC brand new um when are the next foreing
[06:29] Capital expenditures that uh you know so you want to adjust that a little bit and it'll adjust over you know every couple of years you want to adjust it and make sure you're pulling out from the rents appropriately the fifth thing is Property Management fees so there are a lot of different property managers in
[06:46] Tampa Bay a lot of them charge different rates um I've seen rates as low as I think the lowest I've seen is 8% and the highest is 10% so it's they're fairly competitive you get what you pay for for and that's just you get what you pay for um you know there are 8% that looks 8% looks very appealing
[07:09] right but are are they maintaining your property the move out inspections when they do that maybe they're getting the repairs in order that need to be done that you know hey the the tenant left the carpit dir we got to get them professionally cleaned but are they looking at everything are they cleaning
[07:28] the the Dusty air vents in the ceiling are they cleaning the fans are they um repairing and noticing all the chips and cracks in the tile and in the kitchen like you know all these all of these little things add up and so after 5 to 10 years you want to make sure that your property is still in as good or better
[07:46] shape than it was um before you um you started rening it out um then I've seen I you know I've also seen expensive property managers at 10% not worth what they're not worth what you're paying them so not guaranteed a great property manager at 10% but you know find somebody who is good and then don't
[08:05] necessarily worry about the price because it does seem like you're losing a lot of money each month and every year but ultimately think of it as a small um a small fee that um I kind of lost track of where I was there but uh I've seen property managers get paid 10% who aren't worth that either so you know not
[08:24] you're not guaranteed a great property manager at 10% but find one you like make sure that you're not threading as much over the you know extra one or two% because you know that person is watching over your property for years and uh if you have a good relationship they communicate well they're doing a
[08:45] good job um they are worth that there's a few other things those are the five that I recommend knowing right away doesn't matter what type of property it is doesn't matter if it needs renovation um doesn't matter if you are renting it out for pad split for Airbnb for long-term
[09:06] those are the important ones a few though when you go to buy that an agent will help you look at um utilities so this is unique one with duplexes and triplexes and quadplex most people don't realize this right away unless they've already been in the investment World utilities are typically
[09:24] paid for by the tenant unless there are multiple units under one meter um we don't love that but you know many properties were built years ago decades ago and you can't change how they're already uh not easily at least change how they're they're wired and plumbed so with utilities there are often um when
[09:44] there's one meter and usually this is water power is almost always separately metered there's very rare situations where it's you know one electric meter for every unit but let's say there's three units all under one water meter we're going to have to Market those properties as uh water included and the
[10:02] owner pays for the rent so you need to know what are the utilities when you go into this deal cuz you're going to be paying those and uh it's just going to add to your bottom line now ideally we can upcharge the rents a little bit to compensate for free water and so there's a marketing you know trick that we can
[10:19] um not really a trick it's just marketing that hey you get free water so this is what the rents are and typically properties with utilities included are a little bit more expensive if you really want to get down into it you can check about submetering um it can get really expensive and tricky so that's something
[10:36] that we will get a GC involved with so the second thing that I recommend you looking here this is another five things right so utilities renovation cost renovation costs can fluctuate quite a bit if you don't know what you're looking for if this is the first time you've done it maybe you're out of state
[10:51] you don't know what it costs to do certain things in Florida look for there are a lot of general contractors around here and it seems like they're always busy to so find somebody who knows some that are not uh not too busy for you many agents who work with investors and investment properties are able to kind
[11:07] of give you a a rough quote of what a new bathroom is going to look like or what a new kitchen's going to look like and you know size varies and condition varies but you know like bathrooms right now you want to get a full bathy done it's probably going to be $8 to $110,000 if you wanted to create a new bath
[11:24] entirely depends on where the plumbing is uh the sewer lines are but it could be 12 to $4,000 for brand new like like you're building one out of scratch you're selecting a corner in a garage and you're putting a third bathroom there um arv so we're kind of talking
[11:40] about renovation costs this is in line with that because why would you be renovating it you're probably buying a fix upper maybe you want to refinance later on cash out maybe this is a burr buy rehab rent refinance repeat always have to think about it arv is after repair value
[11:59] and uh after renovation value these require comps and you can pull them from Zillow um it's better to pull them from MLS I think because I think it's a little bit more accurate um and there's usually a little bit more information uh available to accurately pull the right comps um so arv is basically finding
[12:20] other properties similar to yours and we're being realistic about which properties are similar to to the one you're buying and you know if we look at properties that are already renovated then we can kind of get a gauge of what yours once it's renovated is going to C it's going to be worth and then you can
[12:36] get a Cash out refinance um ordered with your lender get the appraisal done and hopefully we don't run into an appraisal issue where uh we have to fight the appraiser and everybody hates the appraiser right so fourth thing is down payment down payment know what that is ahead of time um you if you're an
[12:55] investor you know your finances um you know what you have as a down payment um you are different than a first-time home buyer or somebody who um hasn't bought in a long time and and uh you generally know how much you can how much you want to put down whether that's 20% I recommend now going closer to 25 or 30%
[13:16] um with long-term rentals it can just be tough to cash flow right now in Tampa Bay um so consider doing um you know at least 25% down and uh fifth one is the interest rate so depending on if you're paying with cash maybe it doesn't matter to you at all maybe you're buying with hard money the interest rate you know
[13:36] you can't control it as much um it's it's going to be high but it's a short-term loan to rate Finance later maybe 6 months or so but if you're buying a mostly TurnKey property or one that doesn't require you know you know any fancy um financing talk to your L ahead of time get pre-approved um if
[13:55] you're looking to buy within two to 3 to four months try to get pre-approved approved to know exactly what your interest rate is going to be with that lender with that particular loan so dscr loans may have different interest rates than um just your regular conventional um investment loan so no kind of
[14:15] generally not just the interest rate but kind of what loan product you want to go for and if you're not sure um if you're not even sure of you're buying a single family or a quadplex or a condo um talk with a an investment focused agent who can uh help guide you through different strategies and different just kind of
[14:34] what's working in the Tampa Bay area and that is it guys thank you for watching like comment subscribe let me know if there's anything I didn't touch on that you thought might be helpful that you've been looking for I want to know and uh as always feel free to reach out and contact me thanks bye
