Pensacola Realty Masters Blog
Realty Masters is happy to present the following Pensacola area community and Pensacola real estate information!
Pam Keen, broker/owner of Realty Masters and author of The Real Estate Rulebook discusses What Makes a Good Pensacola Rental Property.
Start by picking an investment strategy. We have a market for both short-term rentals and long-term. What your ultimate plan for the property is im important when choosing a property. Listen as Pam discusses some of the criteria she uses when evaluating properties to purchase as investment properties.
- She prefers properties near employers, the colleges, and the military bases.
- She prefers properties that would appeal to families and are in good school districts.
- She prefers brick homes built after 1978 so you don't have to worry about things like lead based paint and aluminum wiring.
Of course, there are a lot of factors that go into considering a property, but these are some of the basics that make a solid investment in Pensacola. Of course, the rate of return and market rent are among top factors when choosing an investment property.
Pam is a long time Florida Real Estate Investor who has bought, sold, and rented hundreds of her personal properties over the last 30 years. She uses her experience as a Pensacola Real Estate broker and investor to help investors buy and sell real estate in Escambia and Santa Rosa Counties. Whether you are looking for a single family or multi-family property, Pensacola Beach condo or luxury home, Pam can assist you by discussing tools for investors.
Are you looking to invest in Pensacola Real Estate and take advantage of the active rental market? Would you be interested in increasing your monthly revenue? If your goal is to buy properties and rent them for cash flow, here is some information you should consider when purchasing an income-producing property in the Pensacola area.
There are different ways you can invest in property in the Pensacola area. Because of our beautiful, white sand beaches and rich history, Pensacola has a large population of seasonal tourists looking to lease daily or weekly. These type of short-term rentals are leased fully furnished with all utilities included and deemed vacation rentals. They require a different strategy and more expenses than the typical long-term buy and hold single-family real estate investment.
In order to decide on a good strategy for you, you should consider your long term investment goals for the property. Is your goal to build equity, create a positive monthly cash flow? Or is it to rent it out for a time then sell later at a profit? Do you want to own a property you can come vacation and visit? You should also keep in mind things like how much time you have to take care of and manage your property.
Single-family homes come with monthly expenses like trash removal, power and water bills, and yard maintenance which can be passed along to a long term tenant. If you own a condo, you pay a monthly maintenance fee, regardless of whether someone is living in the unit. Most include exterior maintenance, trash and the insurance for the building, some do and some do not include water inside the units.
Something else to take into consideration is what types of properties appeal to different types of renters. Condos, townhomes and apartments are great for college students and other singles. Single-family homes can accommodate singles but also appeal to married couples with or without children.
I personally like to rent single-family homes unfurnished and with long-term leases. I get a signed 12-month lease and make the tenants responsible for all the utilities, yard maintenance, pest control and some minor maintenance. Consistency and continuity are two benefits of investing in this type of rentals, and it takes the least amount of time and effort. Tenants often stay and renew their lease beyond the first year. The average length of time tenants stay in the same place is about 2-3 years in Pensacola, Florida.
We have a large number of military renters from both Pensacola Naval Air Station in Southwest Pensacola and NAS Whiting Field in Milton. We have two main types of military renters in the Pensacola area. Students attending the flight training program or another school tend to stay one year or less. Military families typically get their orders for three to four years in one location and if they like the home they are living in they will stay the entire time.
We also have several colleges including Pensacola State College, Pensacola Christian College, and the University of West Florida. Student housing is another rental niche that is very viable in areas located near a college or university. If you are considering investing in student housing, take the time to visit the housing offices on local college or university campuses and ask what's currently available and what students are looking for in terms of housing. Undergraduates typically share housing so be prepared for the unexpected, but you can charge more and therefore it can produce a higher return. Again these students typically will find a place and renew their lease if they are happy with the landlord and the accommodations, so there is the potential for a four-year rental.
For more info on investing and my personal strategies, you can purchase my book, "The Real Estate Rulebook: Everything you need to know to build wealth and create passive income." Reach out to me if you are looking to purchase Pensacola Investment Property!
New to the Pensacola area or not sure where to go for Pensacola area information? We've compiled a list of Pensacola area resources for homeowners to assist with finding solutions to common questions and situations in our community. From a lost dog to a gas leak, the links below will help you. Reach out to the resources below for more information.
Escambia County Resources
Santa Rosa County Resources
Wildlife And Other Resources
10 Mistakes New Investors Make When Purchasing Pensacola, FL Investment Properties
Investing in property has the potential to be a great source of income. However, you want to be smart about your real estate investment. There are many factors to consider when making this important purchase. Below are the top 10 mistakes that investors make when purchasing a Pensacola investment property.
1. Paying Too Much. Use a trusted Pensacola Realtor© that is experienced with investment properties including single family and small multi-family properties. A Realtor© will be able to provide you with information regarding comparable properties in the area, potential rent, and can help guide you with finding a suitable investment property without exceeding your budget.
2. Skipping the Home Inspection. Surprises are not always fun! Be sure to have a thorough home inspection completed even if the property appears to be in good shape. You want to know what you are taking on and ruling out any costly repairs in the beginning can help save you time and money.
3. Being Unrealistic About Rent Amounts in the Pensacola Area. When house hunting for your investment property with your Realtor©, be realistic about the potential rent. Asking too much for rent will end up costing you more money in the long run. If you price your rental too high, it is likely to sit on the market for a longer amount of time than it would if it were initially listed at a reasonable rent amount. As vacancy costs can be your largest expense, it is best to price the property to rent as quickly as possible.
We are seeing investors seeking short-term rental and calculating huge ROI’s based off “potential” rents. We caution investors to purchase properties using this formula. Not all properties make a good AirBnB and many factors can derail these plans, such as government regulation, homeowners’ associations, and unknown factors like COVID. Thus, we recommend that your purchase make financial sense as a long term rental also, in case it does not work out as a short-term rental.
4. Not Hiring a Pensacola Property Manager. Once they’ve purchased a property, some investors underestimate the advantage of securing a property manager to deal with the day to day details of managing a rental. This includes processes such as screening applicants, receiving maintenance requests, performing regular property evaluations, posting notices, and coordinating leases renewals, for example. Having someone to communicate directly with your tenants on your behalf will alleviate a lot of the work that can come along with owning investment properties.
5. Not Being Familiar with Florida Landlord Tenant Law. Another one of the perks of having a property manager is that we are familiar with Florida Landlord Tenant law. You don’t want to rely on Google or Reddit to find answers about situations that may arise throughout your tenant’s lease term. Having a trusted Pensacola property management company by your side to help you navigate those waters will help reduce stress. However, it is a great idea to review these laws so you know what to expect if certain situations arise, such as unauthorized occupants or evictions, and what your legal obligations are under the law.
6. Not Considering Local Environmental Factors. Here in Pensacola, FL, we are susceptible to hurricanes and other severe weather conditions including extreme temperatures. As many properties are located near the water, be aware of flood zones and be prepared should the worst case scenario happen. Flood insurance is always a worthy investment, and you should factor flood insurance in as a yearly expense. Pensacola also has termites in the area and if these go unnoticed and/or untreated, they can cause extensive damage to your property as well as potentially hazardous conditions such as a damaged subfloor. A termite bond can be a wise investment or necessity, especially if you have a wood sided or off grade property. During summer, the temperature and the heat index get extremely high. If you notice the HVAC system is older, plan to replace that in the near future instead of making Band-Aid repairs every few months.
7. Not Taking Into Consideration the Area That You Are Purchasing In. Be sure to pay attention to the area surrounding the property you are purchasing because prospective tenants certainly will! Are there schools or parks nearby? Is there a road with heavy traffic and many businesses? Does the property meet the real estate value principle of conformity? This is important for future resale.
Evaluate the condition of the houses or apartments that are nearby and if they’re in good or bad condition. Search crime maps for crime statistics to get a good feel of the safety and security offered in the area.. Ask yourself if you would be comfortable living in the area you are considering purchasing in because that will be among the top concerns of your renters.
8. Not Considering Expenses for Repairs and Reserves. Be prepared to incur some expenses not only getting the property ready to rent, but also once it’s occupied. Plan for routine maintenance expenses and costly capital improvements over time. Tenants are only responsible for damage caused by accident, carelessness, recklessness or abuse and are not responsible for ordinary wear and tear on a property or extensive upkeep. Take into consideration the cost of future expenses for big ticket items such as the roof, plumbing, or major appliances like water heaters and HVAC units. It is important to know the condition of these items before you purchase your investment property and that is why the home inspection comes in handy!
9. Not Planning for Possible Vacancies. The rental market can be unpredictable at times, as can tenants. Are you prepared if a tenant breaks a lease and moves out early? The sudden loss of rental income can be scary. Properties are renting fast right now, but we recommend factoring in 5% vacancy costs yearly when planning your budget for your investment property to take into account potential vacancy and turnover.
10. Skimping on Materials and Fixtures. Once you purchase a property, consider making some upgrades. Beware that cheaper is not always better. Lower-grade materials have shorter lifespans and can make you feel as if you are constantly making repairs. Consider higher-grade materials and fixtures. Not only can this help you get a higher rent, it may also attract better quality tenants. For example, if your Pensacola area investment property has the old original pink countertops in the kitchen or bathroom, consider upgrading them with granite. Not only is it much more attractive, it is practically bulletproof and can withstand greater wear and tear. If faucets or doorknobs are brass, try replacing them with nickel-brushed fixtures, is a more inexpensive way to improve the look of the property. Additionally, updating old appliances will appeal to tenants when leasing and save you routine maintenance expenses later.
Remember to keep these in mind during your search for an investment property in Pensacola. Be realistic, practical, and run realistic numbers to calculate your ROI. If you are entering the Pensacola market as a new investor, it is a good idea to speak with other local investors to pick their brains and discuss their personal experiences. This is a big purchase and you want to make a wise decision.
When choosing a Pensacola property management company, many factors can come into play. How do you choose the right one? Who will have your best interest in mind and help protect your investment? Our motto is we treat your home as if it were our own, so let Pensacola Realty Masters take care of you!
Pensacola Realty Masters is the largest family-owned property management company in the Pensacola area with over twenty years of property management experience and over nine hundred properties in our portfolio. Whether you’re a first time landlord or a seasoned investor, we can help you navigate the world of property management and investment real estate. Let our family help yours!
Our trusted team is dedicated to assisting you and your tenants before, throughout, and after the lease term. There are many processes in place to help make for a smooth transition when signing on a new owner, screening tenants during the application process, and also while completing move in and move out evaluations, to name a few.
We offer our services at a reasonable cost without any hidden fees. We also do not charge you to market your property or when the property is vacant. Once you have signed a property management agreement, we your property will be listed for rent and you will not be charged anything until a new tenant moves in. We also offer a discount for our active duty military and investors with three or more properties.
Being a landlord is not always easy. While we are well-versed in Florida Landlord Tenant Law as well as Fair Housing, we also have a legal team to assist with any issues that may arise during. This is an awesome resource to have as a back-up for those tough cases and it only costs a minimal fee of $4/month in addition to your monthly management fees.
Realty Masters requires strict standards for your tenants to qualify. Just look at our online reviews! Almost all of the negative feedback we have from renters is about not meeting the requirements. It is our job to protect your investment. Applicants of Pensacola Realty Masters are required to meet certain criteria such as a minimum credit score, sufficient income, and a good residential history. We will process applications in the order they are received and will communicate with you regarding the status of applications for your rental property. We must follow the laws of Fair Housing and are limited in what details we can divulge to you, but know that your potential tenants are being well-screened and no one that doesn’t meet the requirements gets approved unless you have given that conditional approval.
Pensacola Realty Masters strives to provide you with extremely thorough documentation of the condition of your rental property. The evaluation team is excellent at documenting the conditions digitally, as well as in writing. We will complete evaluations prior to move in, ninety days after move in, annually, and after move out. The reports and photos will be sent to you so you can review the condition of your property as well. Our property managers will gather the necessary information to determine if any notices need to be given to the tenants for lease violations during occupancy. Upon move outs, our property managers will communicate with you and coordinate vendors to help make the property move in ready. The property managers will also draft any claims that may be made against a past tenant’s security deposit and keep you apprised of the laws we are all required to follow.
We are readily available for your tenants! Our office is also centrally located in Pensacola and in addition to normal working hours during the week, we are open on Saturdays for added convenience. We also have an after-hours phone for those maintenance emergencies that may crop up after business-hours. Many property management companies are unreachable. You can call our office and get an answer 51 hours each week. You can also text, email, or message us on your portal.
If the time comes when you decide that you no longer desire to be a landlord, or if you may want to reduce the size of your portfolio, we have multiple Pensacola realtors that can provide a comparative market analysis and assist you with selling your Pensacola real estate investment.
Being a landlord can be a rewarding experience and we are here to help you every step of the way. Contact Realty Masters today to discuss your next steps!
Considerations before Getting Solar Panels in the Pensacola Area
The use of Solar panels becoming more popular as more people are working from home and looking for ways to save money and get tax rebates. As citizens of Earth, we are more concerned than ever about our carbon footprint and the impact we will leave behind on the earth. Since Hurricane Sally, we’ve seen a lot of new roofs comes on and an explosion in the Solar Energy market in Pensacola. We’ve heard mixed reviews on the subject and wanted to bring you some perspectives from those in the real estate, insurance, and construction industry to help with your decision of whether or not to invest in solar energy for your Pensacola area home or business.
There are several types of solar energy systems. For the purpose of this article, we’re talking about solar panels placed on the roof.
Benefits of Solar
Obviously, the main benefit of solar panels is to save money on your monthly energy bill. In many cases, the electricity bill can be mostly or significantly eliminated through the use of solar panels. Keep in mind, if you finance your solar panels, you will be paying a monthly bill regardless, just to finance the solar panels.
There may be certain tax advantages, rebates, and opportunities to sell additional energy to the grid. These vary by location and time, so definitely ask your solar representative about these items.
Solar panels are environmentally friendly and a renewable source of energy. Solar energy helps to reduce gasses and fossil fuels created by traditional power sources.
Google Project Sunroof provides an estimated solar savings from Google Earth Imagery. Check it out here: https://sunroof.withgoogle.com/
The software analyzes the size of your roof available for solar panels and the hours of usable sunlight per year. It’s pretty cool, but remember, this is just an estimate based off old google map imagery and not an accurate source.
Hidden Costs of Solar
We are learning that the saving might be offset by higher insurance rates. Some insurance companies will not write policies at all, some will write a policy under certain conditions and some will include them in general policy. It seems a common issue the insurance companies have is the selling back of electricity. Many of the sales representatives for the solar companies use the idea that the company will buy back unused power, however, the insurance companies are saying that changes the home to a business.
It is also our understanding that the lien placed on the home for the equipment must be paid off prior to or at closing and is not usually transferable to a new homeowner.
Additionally, home appraisers are not assigning any significant value to the solar equipment on your home, even if it’s paid off.
We’ve also spoken to several roofers and they have a negative opinion of solar panels. Unfortunately, the solar panels are attached to roof by nails. This can of course cause roof issues if not installed properly, over time, or in the event of a high wind event. Roofers are not remove solar panels from a roof so the solar company will have to come out to remove the panels in order to have your roof assessed or repaired/replaced. Some contracts include a one-time removal and storage off site while your roof is being repaired (assuming the panels didn’t get damaged) Since we are in Florida and highly susceptible to strong tropical winds, we recommend you discuss what happens if the panels are damaged in a storm and what type of warranty is offered on a solar system before purchasing.
Pensacola Solar Companies
If you do decide to go through with solar panels, it can be hard to decide which company to use. We recommend interviewing at least two companies. Here is a list of the top rated Solar Companies in the Pensacola area:
Meraki Solar, LLC https://merakisolutions.com/
Suncor Solar https://www.suncorsolar.com/
Compass Solar Energy https://compasssolar.com
You can request a free quote on many of their websites!
If you have been watching the weather reports lately you probably know that we have already had the first named storm this year. Back in May, the National Hurricane Center had a preparedness week so if we are to get a hurricane we will be prepared. Did you prepare? Here's a list of ways you can do so now.
Determine your Risk- use the time now before there is a threat to learn your flood zone and evacuation zone so if a storm comes you will have plenty of time to make an educated decision to stay or leave. https://myescambia.com/apps/knowyourzone/
You can also check out flood risk zones on this map: https://floodfactor.com/
Develop an Evacuation Plan- If a storm comes and you will need to evacuate, it's best to have a few plans in place on where you will go. Depending on the storm, you might want to stay with locals that might be in a safer area. Consider your family or friend's homes. Another very important thing to consider is your pets! If you have pets it is a good idea to go ahead and research hotels that you can go to so you can take your pets with you. If you have to evacuate, do not leave your pets behind.
Assemble Disaster Supplies- Even if you made a kit last year it is always a good idea to take it out and ensure your supplies are still in working condition. If you do not know what to pack into your kit check out this helpful link: https://flash.org/peril_inside.php?id=84
The home - This is a great opportunity to go around the home and see if there are any limbs that need to be cut away from the home or any dead trees that might become a hazard. If you have patio furniture or lawn items remember that they will need to be able to be safely stored during a storm so plan on where you would put those items.
Complete a Written Plan - Having a written plan can be very helpful when you are under stress so you will not forget. Let someone that is not in the impact area know what your plan is.
Remember, Hurricane Season runs from June 1st through November 30th with the majority of severe storms in August and September. It's never to late to prepare.
We have been hearing a lot of comments about the increased costs of housing in the area. Comments such as "Housing is getting too expensive in Pensacola!" are all too common. While both rental rates and sales prices are increasing in Pensacola, the Pensacola area is still considered to be affordable compared to other cities, especially other cities in Florida. We decided to research what similar houses cost around Florida and provide you with data on comparing the costs of living amongst popular Florida metropolitan areas.
See the data below comparing different markets in and around Florida. As you can tell, even with increased prices and inventory lows, Pensacola still ranks among some of the most affordable markets in Florida.
Comparing Florida Real Estate Markets:
Florida Metro Average Sales Price Median Sales Price Median Time to Sell
- $263,397 Average Sales Price
- $231,000 Median Sales Price
- 91 days Median Time to Sell
Crestivew/ FWB & Destin
- $509,200 Average Sales Price
- $279,900 Median Sales Price
- 92 days Median Time to Sell
- $257,259 Average Sales Price
- $231,500 Median Sales Price
- 81 days Median Time to Sell
Orlando/ Kissimmee/ Sanford
- $326,044 Average Sales Price
- $280,000 Median Sales Price
- 78 days Median Time to Sell
Miami- Fort Lauderdale - West Palm Beach
- $547,362 Average Sales Price
- $370,000 Median Sales Price
- 98 days Median Time to Sell
Tampa- St. Petersburg- Clearwater
- $300,609 Average Sales Price
- $248,500 Median Sales Price
- 77 days Median Time to Sell
*Data provided from SunStat Reports from Florida Realtors
Are you interested in purchasing a home in the Pensacola area? Our Realtors can help you whether you are looking to lease or buy. Give us a call or email us today for more information.
More comforting news for Pensacola area landlords is that the Pensacola rental market is performing stronger than ever despite COVID and financial difficulties for many households. Despite the COVID pandemic, Pensacola’s rental market saw increases for the 2nd half of 2020 by 10%, on average, for new move in rents.
We came across this New York Times Article entitled “How the Pandemic Blew Up Rents” discussing the disparities between different markets and metros. The article cites that Nationwide, 2020 rents were down 1.2% year over year. The majority of larger markets saw rental decreases while smaller metros had the opposite, rental increases. As mentioned, we definitely saw strong rental increases in Pensacola’s market. According to Apartment Lists National Rent Data, our data matched up with theirs in showing that the Pensacola area saw nearly a 10% year over year increase. In contrast, other Florida markets did not perform as well. Markets like Orlando and Tallahassee saw a 5% rent decrease in 2020.
Locally, our employment numbers are strong despite and remained so during the pandemic. While we did experience high unemployment in the tourism industry, it’s clear that our area was not affected as much as others in the state of Florida, whose economy highly depends on tourism dollars.
Locally, inventory levels for both the real estate sales market and rental market are at record lows. Hurricane Sally’s impact on our area in September 2020 exasperated our low inventory issue causing a spike in both rental and sales prices. Into 2021, we continue to see record low inventory and vacancy rates. Both rental rates and home sales prices continue to rise and affordability continues to be an issue as rents and mortgage rates are rising above what the average Pensacola family can pay. Many landlords continue to choose to sell their properties as they become vacant, especially with costly hurricane repairs and eviction moratoriums that limit the landlords right to collect rent and evict for non-payment.
According to the New York Times Article, rents are now stabilizing around the country and rent fluctuations are starting to slow. Locally, we expect the trend of low supply and increasing rents for the foreseeable future.
If you are considering purchasing a property in the Pensacola area, reach out to our team to discuss the rental market!
Evictions are a hot topic right now. As many tenants have been delinquent through the COVID-19 pandemic, and the legislation preventing evictions is expiring, many landlords are calling us about evictions.
As your property manager, we handle several aspects of your property management as allowed under our management agreement and Florida law. These roles have us property managers wearing several hats- Realtor, leasing agent, private investigator, maintenance coordinator, bill collector, bookkeeper, interior designer, and the list goes on. One of the roles we cannot assume, is that of a lawyer.
The Florida Supreme Court does allow for Florida property managers to handle evictions for property owners but only in a limited scope and only in certain instances. They give us the authority to:
- With the help of our attorney, draft and serve a 3-Day Notice
- With the help of our local county court, draft and file a Complaint for Eviction and Motion for Default
- With the help of our local Sherriff’s Office, obtain a Final Judgment and Writ of Possession
- Prepare eviction forms approved by the Florida Supreme Court
Your Florida Property Manager may be able to file and proceed with an eviction if:
- The eviction is for non-payment of rent
- The eviction is uncontested by the tenant
- We have written authorization from the property owner to evict the tenant
Unfortunately, if your tenant fails to move at the end of the lease, an eviction is necessary, but your Florida property manager may not be authorized to file this on your behalf. Additionally, if your tenant violates a lease term and is served a 7-day notice of non-compliance, we can serve the notice, gather the documentation, but cannot file the eviction on your behalf. Additionally, if we know your tenant will contest the eviction and that they have any ground to stand on, we will not be able to file any eviction on behalf of the property owner.
Why? Well, because the Florida Supreme Court does not want Realtors practicing law. Unfortunately, at a certain point, the eviction process can turn into such. This can be frustrating for property owners as the eviction process can be a little intimidating to navigate. The good news is that many owners, with a little guidance, are able to file and carry through the eviction with no problem. It may require an in-person or a conference call hearing. In many instances, hiring an attorney to handle the process is the best choice for many.
It seems like every month we are discussing what normal wear and tear is and what is considered tenant caused damage. We strive to be fair with both our owners and tenants so we are always doing our research to make sure our standards are on track with others. Most recently we have compared our guidelines to the U.S. Department of Housing and Urban Development. The U.S. Department of Housing and Urban Development says that “the costs an owner incurs for the basic cleaning and repairing of such items necessary to make a unit ready for occupancy by the next tenant are part of the costs of doing business.”
Some items HUD identifies normal wear and tear are
- Fading, peeling, cracked paint
- Small chips in the plaster
- Nail holes, pinholes, cracks in walls
- Door sticking from humidity
- Carpet faded or worn from walking
- Partially clogged sinks caused by aging pipes
- Dirty or faded lamp or window shades
Tenant caused damages usually cost more to fix and go beyond normal wear and tear items likely a result of a tenants' negligence or abuse.
Some examples from HUD are:
- Gaping holes in walls or plaster
- Chipped or gouged wood floors
- Doors ripped of hinges
- Holes, stains or burns in the carpet
- Clogged or damaged toilet from improper use
- Torn, stained, or missing lamp and window shades
See the attached HUD document and review Appendix 5C and 5D for more information on normal wear and tear as well as a sample life expectancy chart.
Our broker and fellow real estate investor recently appeared on The Rental Income Podcast! Listen to her 20 minute episode "The Formula for Buying the Perfect Rental with Pam" as she discusses real estate investments.
Pam discusses her preferences for real estate investments in Northwest Florida, preferably newer, lower maintenance single-family homes.
If you are interested in purchasing a Pensacola area rental property or real estate investment, reach out to our sales team. For additional real estate investment information, head on over to our Real Estate Investors page.
There's been a lot of talk this year about Opportunity Zones and a new way to reinvest funds that would have normally been paid towards capital gains taxes in real estate in low income zones designated "opportunity zones." If you are an investor looking to invest in Pensacola area real estate, you may be interested to learn more about Opportunity Zones.
The Tax Cuts and Jobs Act of 2017 in conjunction with the Internal Revenue Code Section 1400Z provides new tax incentives in the way of exchanging capital gains if reinvested and held in accordance to the rules outlined. This rule applies until 2026. We're surely not CPA's and this topic digs quite deep into tax code so always consult your tax professionals before moving forward with an investment plan that involves significant tax implications.
HUD has now created a website with information to further explain Opportunity Zones. Visit it here as it applies for the entire U.S. and not just the Pensacola area. https://opportunityzones.hud.gov/ and includes a map to show certified opportunity zones. The Florida Department of Economic Opportunity also has a variety of information about Opportunity Zones on their website here.
In Pensacola, there are limited zones identified as Opportunity Zones and includes 5 small areas in Pensacola, a portion of Milton, Florida and most of the city of Century, Florida.
- East of Interstate 10 from Baars Street north to Royce Street
- A section between Fairfield Drive and Beverly Parkway west of Palafox St.
- A section both north and south of W Cervantes St.
- An area next to Corry Station including New Warrington
- An area west of Palafox Street to P St.
Florida hurricane season is roughly May through November. That is over half the year! On top of that, hurricanes don't always occur during their season. For homeowners in Florida and in other coastal communities, hurricanes are a huge threat.
Does your insurance policy adequately cover hurricane damage? You'll have to consider several items to reach this conclusion.
In Florida, all insurance companies are required to offer hurricane insurance for deductibles of $500, 2%, 5%, and 10%. Cutting through the insurance technical talk; Say you get a policy that covers $200,000 worth of damage and your house. Your policy has a 2% deductible. If your house is completely destroyed, your insurance company will write you a check for up to the amount of your coverage (in this case $200,000) minus your deductible (in this case $4,000). If this were to happen, you would receive the difference between your coverage and your deductible ($196,000). If you were to experience damages to your home above your deductible, the insurance company would likely offer to pay the estimated or exact repair costs less your deductible.
As we can see, a 2% deductible is great! But what about 10%? If you had a 10% deductible in the above situation, that would be $20,000! If the damage to your home were $19,995, you would be responsible for those repairs. If the damage to your home does not exceed your deductible, you would be responsible to pay the repair costs out of pocket.
Sometimes we don’t realize how high our deductibles are and we’re not able to meet it to repair our homes. If you’re not sure what your deductible is, now is a great opportunity to check. If you’re not happy with what you find, it may be time to shop around for a new policy. In some cases, improving your policy could be a matter of speaking with your insurance agent. Some policies can reduce the deductible for a minimal increase in your monthly payments.
Another thing to be aware of is that your insurance company will only make a payout once during a hurricane season. Hurricane insurance will only be paid out for damages caused by a hurricane declared by the National Weather Service. Deductibles are applied to damages occurring from the beginning of a hurricane watch up to 72 hours aver a watch/warning has ended.
Please be aware that not all insurance policies offered include hurricane or wind damage coverage as there are several different types of insurance policies. Ask your insurance agent specifically about your hurricane and wind coverage. Some policies require a separate policy for hurricane and wind-related damages. Also, make sure you that you have the right type of policy for your situation. For example, homeowners who occupy their home as their primary residence need different policy coverage than those who rent their properties. If you do not have the correct type of coverage, the insurance company may be able to deny a valid claim.
Are you a homeowner looking to ensure you have the proper coverage or a new homeowner looking for first time coverage? It is best to reach out to an insurance professional to review your policy and inquire about what insurance carrier, policy, premiums, and deductibles are right for you.
Check out these other articles about day to day insurance issues:
If you need recommendations for local insurance agents, please reach out to us for referrals!
With any measurement based on a future predictions or hypotheticals, we know that many parameters, and events can change the results,but that shouldn't stop us from doing our due diligence on the front end of investment properties.
Let's take a look at the kinds of properties I focus on, which are single family homes that are easy to finance with 20% down for investors.
Below is an example of a home purchased for $100,000 with a $20,000 down payment and an $80,000 mortgage at 5% interest. I used a 2% property appreciation rate and 2% annual increase for rents and expenses, and a 10 year holding period.
Annual Rental Income: $1000 per month rents less 2% vacancy = $980 * 12 = $11,760 per year.
Basic view: Invested $20,000 (down payment) for 10 years and then cashed out.
See the chart that shows the growth. (Chart is courtesy of Chris Bird with CRS and came from his investment analysis course which I attended).
Feel free to utilize this formula and information when analyzing your own real estate investments. Reach out if you have any questions about analyzing real estate investments in the Pensacola area.
We've felt some impact from the aftermath of major Hurricane Michael, which hit the Panama City area in October 2018. Here are the ways we've been impacted.
Rental Market Remained Steady
On the positive side, we waived application fees for storm victims and received quite a few renters from Bay County. Along with tightened inventory, the storm helped to cool the winter slow down we normally have.
With the help of a few owners that did some upgrades and remodeling, we were able to raise our new move in rents 6.5% the last quarter of 2018! Statistically, homes leased in the last quarter of the year receive the lowest increase in rent and have the highest days on the market.
Roofers and Other Contractors
We have been struggling with contractor resources as many contractors went over to aid in hurricane relief.
Roofers, general contractors, and remediation companies in the area have been extremely busy. Coupled with extreme rain, there have been several delays with roofing projects in the Pensacola area. Please be patient if you need roofing estimates or roofing work. We expect this to demand to continue into the coming months and year.
Another impact of a major hurricane in our state is increased requirements at insurance renewal time! Insurance companies are being really tough right now.
We've heard of insurance companies sending non-renewals and cancellations or threatening a non-renewal for the following reasons:
- Roof older than 15 years
- Homes built before 1972
- Homes with trees over the roof line or leaning over the home
- Homes with cracks in the driveway
- For filing previous claims on any homeowner's insurance policy
With so many of these instances happening, we want you to be prepared and aware of the insurance issues we are seeing currently. Here are a few ways you can be prepared for this:
Limit Insurance Claims
It makes sense to file an insurance claim if something minor occurs and the total costs will be over your insurance deductible. I mean, isn't that what insurance is for? Instances like vandalism, water leaks, and other minor damages is why you pay for insurance each month.
We understand the premise, but with the recent hardships in the insurance field, we recommend being cautious when filing insurance claims. We have heard of cancellations from filing a claim or insurance companies raising the premium. It can also prevent you from easily switching insurance carriers, as a carrier can use previous insurance claims as a reason to deny a new policy with them.
Did you know that insurance claims follow you as the homeowner as well as the property?
We've seen instance where a claim on a rental property affected the owner on securing insurance on their primary residence. We even saw an instance where a new buyer was trying to purchase a home that had a history of a renter's insurance claim and the new buyer was having a hard time procuring a new insurance policy.
We recommend you pay for these small instances above the insurance policy and only utilize insurance when appropriate and necessary. Consider the long term consequences of filing an insurance claim when computing the expenses for the repair. We know- insurance makes us mad sometimes too.
Consider Replacing your Roof Instead of Repairing
It could be a waste to repair your roof. Often times, when a roofing issue is reported, a roofer will provide an estimate to repair and/or to replace. The roofer will give their opinion on the life of the roof and what the cause of the issue is.
It may seem easier to repair the roof now and worry about replacing later, but do keep in mind the following:
- Roof leak repairs are not always guaranteed and the leak could occur again or arise in another location.
- Repairing could be a waste of money as you will eventually need to replace the roof.
- If your roof is older than 15 years, you will definitely have to replace your roof soon, or in the coming years, to keep your property insured.
- If you try to sell the property without replacing the roof, you will NOT be able to sell the property if the roof is older than 15 years. FHA/ VA financing will deny the loan AND the new buyer will likely be unable to secure a new insurance policy.
We strongly suggest replacing your roof at this time and not spend funds to repair the roof. Of course, we will review each situation on an individual basis.
As many of the homes in our area had roof replacements after Hurricane Ivan in 2004, please keep in mind that these roofs are now 15 years old. Many of the homes that did not need a new roof at the time of Hurricane Ivan were built between 1999 and 2004. These roofs are 15-20 years old now! Reach out if you have any questions or concerns.
If we have any insurance professionals reading these, please feel free to reach out to us with additional information!
The Realty Masters of FL Team
#1 in Pensacola Property Management and Leasing!
originally posted 01-12-2019
As a landlord, you have to mitigate liability by ensuring that your property meets all applicable city, county, state, and national laws. One of the biggest challenges for the do-it-yourself landlord is staying on top of all of these regulations!
One regulation you may not be aware of is the need to have 10 year tamper proof smoke detectors in your rental property.
In 2015, Florida Landlord Tenant Law added language that requires all battery operated smoke detectors to be replaced with 10 year tamper proof batteries. Of course, the lithium battery detectors cost more and can be up to $30 for each detector (versus under $10 for the old kind). They still sell the old 9 volt battery detector at your local home improvement store, however, be advised that this detector does not meet the threshold of Landlord Tenant Law (and likely new building codes, although I am not an expert on following those).
The law dictates if you have to replace the detector, you must replace it with a tamper proof detector.
Battery operated smoke detectors expire every 10 years. Check the date on the back of the detector to make sure the detector is not expired.
Smoke and carbon monoxide detectors are not optional expenses as they are required under the law.
originally posted 01-04-2019
Are you considering purchasing a property that has a homeowner’s association or condo association? Before you consider renting or buying a home in a covenant-enhanced community, you should be aware of and fully comprehend the rules that govern the community.
Florida law allows for certain disclosures to be made to home buyers when purchasing properties that have a homeowner’s association (HOA) or a condo association (COA). You should always request the governing documents of any association prior to purchasing your home. If you are selling your house, check the folder the title company gave you when you closed to possibly locate the documents. Unfortunately, many find themselves unable to locate the appropriate documents in time since the real estate market can move so quickly. Here are a few of our best tips on how to locate these documents.
Check with a HOA Management Company
If you know for a fact that the HOA or COA is professionally managed, check with some of the other homeowner association management companies in town to find out if they manage it or if they may know who does. If you happen to know someone who resides in the community, you can ask them who manages the community and they can surely point you in the right direction.
Conduct a Quick Internet Search
Sometimes, a quick Google search will reveal an association webpage, Facebook page, or a page on some other public forums like NextDoor, that will provide you with the information you need to contact the members of the association or Board of Directors.
Check County Records
Often times, the county has a record of these governing documents online. Always check with either Escambia County or Santa Rosa County if you are searching for a homeowner's association in the Pensacola area.
Search the Division of Corporations
All associations should be registered with the Florida Department of State Divisions of Corporations. You can search their website here. While you will not find the documents here, you may find the contact listed as the registered agent or on the annual report. This will also show if the HOA or COA is still active or has been dissolved and changed to inactive which can happen from time to time.
It is ultimately the responsibility of the owner of the property to provide the buyer or tenant with the governing documents and other necessary HOA information. It is best practice to be very familiar with all guidelines in order to make for a most peaceful environment and to enjoy your new home and new neighborhood to the fullest!
Landlords: your tenants want updates.
When asked the question "What one improvement would you wish for your rental?" upon vacating, our tenants had a lot to say.
Here's a list of the most common answers we received this year in order of frequency:
- Needs upgrades and updating
- Update appliances most commonly mentioned is the fridge
- New flooring (carpet or vinyl is old)
- Provide lawn care
- New light fixtures; fans in all rooms
- Windows and screens are old
- Fenced yard or repairs to old fence
- New counter tops
- Needs new a/c unit
- No gutters on home
- Updated bathroom
- Wallpaper ripped out everywhere
- New exterior doors
We know the old saying is "if it ain't broke, don't fix it", but your tenants disagree. They want new fixtures and updated energy efficiency. Tenants expect their landlord to continually make upgrades and provide routine maintenance. Landlords should build up a reserve to make these upgrades.
As your property ages, it's a good idea to invest in routinely replacing components in your home. To keep your home in good condition, you should be completing maintenance frequently on your properties. Making these and other improvements will yield higher rents, less vacancy, and an overall better experience for you as a landlord.
Reach out to us with any questions about becoming a Pensacola area landlord. We specialize in working with investors and landlords in the Pensacola real estate market. As we manage over 1,000 rental properties, our real estate agents understand rental market trends.
We are currently accepting new properties in good condition in Pensacola, Pace, Milton, Gulf Breeze, Pensacola Beach, Perdido Key, and Navarre.
originally posted 01-01-2018
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