How To Choose A Naples Investment Property

What makes a good Naples investment property?

Close to the Beach = Higher Rent

Your tenant who rents your investment property from you will want to go to the beach. Your buyer when you eventually sell will probably want the beach too. Properties close to the beach command a higher price, are less available, and have more competition from buyers looking to get them. If being right on the sand pushes the price point higher than you’re comfortable with, I really like the opportunities in smaller mid-rise condos or homes that are within 1/2 mile of the sand. View is always important, but for a rental it is not as important as location since high floor views cost much more. Lower floors in beach front condos are much less expensive and are OK for renters. Walkable to the beach is key. One of the most productive ways to get a renter to call you is with an aerial photo from Google Earth showing the close proximity to the beach. Then they can picture themselves spending the day on the sand. The areas I specialize in such as Pelican Bay, Vanderbilt Beach, The Dunes, and Park Shore are all close to the beach.

 

Other Amenities Pay Off. What about Golf & Pool?

Besides the beach, the community amenities are very important. Seasonal renters are looking for the same quality of life that Naples residents here enjoy. If bundled golf is included and you can transfer that to your tenant while they’re renting it’s a huge plus. I sold a condo in Tiburon to a customer that bought specifically to attract golfer tenants that wanted to come play Tiburon Gold & Black courses. He asked $8k per month for rent and got it. That’s a $2k per month premium over the other Tiburon rental properties that didn’t include golf. As a bonus he’ll use the golf privileges for himself during the other months when he doesn’t have a tenant. Stonebridge is another fantastic golf community with great investment potential. They recently renovated their clubhouse. Big pools can boost your rents too. I’ve had other customers buy in The Dunes because of the fantastic pool and Tiki bar. (It get’s hopping for Friday happy hour!) My point is that the lifestyle the tenant gets is a big factor in determining how much you can charge for rent. The property should offer the Naples lifestyle that your snowbird renter is paying for when they escape the cold winter up north..

 

Friendly Homeowner Association = We Like Renters

Most homeowner associations in Naples have some type of restrictions regulating the minimum rental period and/or number of rentals an owner is permitted per year. At first this might seem like a hindrance to you as an investment property owner wanting to capitalize on the most rental income possible. Look at it this way however, your neighbor might not be screening their tenants as close as you do. You don’t want them to have transient renters come in for a week and trash the place with no real financial obligation to the upkeep or peace and quiet of the community. Then it happens the next week with different renters, and the next, and so on throughout season. I’ve heard horror stories. Most of the best HOA’s are pretty reasonable allowing 30 day minimum rentals up to 3 times per year. Some are a bit more stringent requiring 90 day minimums. Tenants signing on for at least a month tend to be more committed financially to the property and their time out of the cold up north. Owners should always ask for a damage deposit as well. In the long run, stricter communities tend to maintain value and often sell higher later when you sell to someone who isn’t buying as an investment property. That is when the stricter rental rules pay off for you.

 

More Criteria…Think Pets, Garages, Stairs, ect.

Pets can be very important to residents and tenants alike. Many homeowner associations have restrictions on size and number of dogs & cats and some don’t allow any pets at all. It is important to find out ahead of time what the pet restrictions are. Owning where you will allow renters to bring their dog sometimes ups the rent.
Attached garages can be a big plus in an investment property not only for allowing tenants to park out of the sun, but they also give you the owner more space to put things that you don’t want the tenant to use or see. Some of my customers put lockable cabinets in their garage or they move clothes or furniture in there.
Stairs can sometimes deter older renters who would prefer being on the 1st floor. Views tend to be better on higher floors, but for an investment property single floor properties with the master bedroom on the main level with no stairs tend to rent best.
Number of bedrooms. 3 bedrooms are usually better sellers in the long run than 2 bedrooms. The market for 2BR’s is smaller because most buyers tend to have kids and grandkids that they hope will come and stay with them in Naples. (although I’ve seen most of the time the parents leave the grandkids with grandparents and then they go stay at a hotel)

 

Why Own Investment Property in Naples?

The seasonal rental market in Naples has been hot year after year with thousands of renters from the north coming for the Naples warm weather in January, February, March, & April. Those four months are in such high demand that many owners rent for those months only and then come and use the home for the rest of the year while using the rental income to pay all of the HOA fees and tax expenses for the whole year. Some also benefit from the tax deferred 1031 exchange benefits resulting from sold properties in other states. Whether it’s for the positive rental income, price appreciation, or tax benefits, investment properties in Naples could make sense for you too.

 

Here are 3 properties I like this week that would be great investment properties in this current market….

 

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The Villas of Park Shore 3BR/3 bath $895,000
Expect to ask $9000 per mo during season

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Willow Brook at Pelican Bay 3BR/2bath $439,000
Expect to ask $4500 per mo during season

 

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The Dunes #405 3BR/2bath $699,000 furnished
Expect to ask $7000 per mo during season

 

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See you in Naples!
Regards, Frank
239-216-2445

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