Tips for Buying an Investment Property In Naples

Shopping for an income producing property takes research and a little footwork. The good news is that Naples has consistently ranked as one of the best areas in the United States to buy an investment property. Keeping the following variables in mind when making your decision will help you better determine the overall income producing opportunity.

Neighborhoods: Maximizing the rental income and the appreciation of a home are the two most important factors when considering an investment in Naples.  Properties near the beach will always generate the most amount of income—particularly seasonal short-term rentals. Another important factor in maximizing your income potential is investing in a property with little to no homeowner association restrictions.  Unfortunately, there are few single-family homes near the beaches that do not carry some association restrictions on renting. However, homes in neighborhoods west of Route 41 do not have homeowner association restrictions and can be rented out by the month, week or for a few days.

Property Taxes:  Property taxes vary so as an investor you need to be aware of how much to budget for taxes. High property taxes may not always be a bad thing if the property is excellent for long-term tenants. The assessed value of real estate in Naples is determined by the Collier County Property Appraiser who weighs such factors as market value, geographic location and how the property will be used. The tax itself expresses the millage rate as the result of dividing the approved taxing district’s budget for the tax year by the related, taxable value. The town’s assessment office will have all the tax information on file or you can talk to the homeowners association within the community.

Schools: Naples isn’t just for old people, especially in the past few years. Your tenants may have children or may plan to have children one day so investing in a home in a good school district is important. Finding the right property with a good school nearby can only enhance the value of your investment.

Crime: Naples is so safe that people are known to leave their front doors unlocked when they walk to the beach — still, googling the crime rate or researching statistics in various neighborhoods can’t hurt (and it beats asking the homeowner who is hoping to sell you his house). Items to look for are vandalism rates, petty crimes and recent activity (growth or slow down). You may also want to ask about the police presence in your neighborhood.

Jobs:  Locations with growing employment attract people – meaning more tenants. Although Naples remains a retirement community, the population in Collier County is rising and good companies have recently moved to the area. The unemployment rate is below the national average with recent job growth on the rise.

Amenities:  Naples is strong in this category with a plethora of things to do –fishing, golf, and dining just to name a few. Naples also has great beaches- often making the top ten lists of the best beaches around the world.

Rents:  Rent is the bread and butter of your investment, so you need to know what the average rent is. The median rent price in Naples is $5000.00, which is higher than the Naples Metro median of $3200.00. While making sure that the average rent will be enough to cover your mortgage payment, taxes and other expenses, gauging where the area will be headed in the next five years is also important to consider.

Natural Disasters: The last major hurricane in Naples was Hurricane Donna in 1960 although Naples is frequently impacted during the tropical season.  In 2005, Hurricane Wilma caused significant damage to Naples Airport and damaged some high-rises and homes throughout the area. Insurance is an expense that you will need to subtract from your returns, so it is good to know just how much you will need to carry.

When it comes to buying an investment property in Naples, you want as much information as possible before making a decision. The more you know beforehand, the fewer surprises you’ll run into and the better chance you have on making a smart investment. Contact me to learn about buying an investment property in Naples and to find out how I can help.