Pensacola Realty Masters Blog
Realty Masters is happy to present the following Pensacola area community and Pensacola real estate information!
As Realtors, we frequently hear from landlords and property owners asking about the accuracy of Zillow’s Zestimate for their Pensacola rental property. Right from Zillow’s website, Zillow reports the Rent Zestimate is a “starting point in determining the monthly rental price for a specific property.” They go on to further recommend that you talk to a local real estate agent or property manager that specializes in rentals to determine an accurate listing price. We are that real estate agency that specializes in rentals and property management!
Here’s a few reason’s Zillow’s Zestimates are not accurate in many cases.
1) Their estimates do not take into account special features, location, and current market conditions. Location is the largest factor among these as, especially in Pensacola, market values vary, even just a few streets over. Zillow does not know Pensacola neighborhoods like we do.
2) Often, key factors, such as the number of bedrooms, bathrooms, or square footage are not accurate. This misinformation can skew the numbers greatly. As Zillow gets the information from user-submitted data as well as public records, the information is not always accurate.
3) Many investors have come in to the market, purchased properties, and remodeled them to increase the value. If your property is not updated, you cannot achieve the same rents as one that is.
Our goal is always wanting to achieve the maximum rental rate for your investment while securing a tenant fast. It is best to price the home close to comparable homes to ensure it does not sit vacant for extended periods of time. Vacancy expenses are among the largest expenses you will face as an investor. Considering the loss of daily rent plus expenses to keep the property on the market, it does not make sense to overprice the home, as financially, you will lose in this scenario. Unfortunately, while demand is high and supply is low, you may achieve a higher than market rent from someone out of the area desperate to relocate. However, experience tells us these tenants are most likely to break their lease and find something more preferred after they are settled.
So how do we price homes? We run a detailed market analysis on your property using local MLS data from the last 6 months to year. We factor in data that you provide about your home and consult the property appraisers website. We also take into account active listings that are not renting. Of course, we consult Zillow and other leading rental platforms for additional data. Commonly, we see Zestimates coming in up to $500 higher or $500 lower than market rent.
Interested in reading more about Zestimates? Read Zillow Estimates Not as Accurate as You Think on Investopedia, or Think Twice About Trusting Zestimate 'Zestimate' Home Values on Money.com.
If you’d like an accurate rental market analysis for your property, reach out to our team.
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!
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
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
5 Tips for Pensacola Renters: Finding a home in a competitive market
- Do your research! Look up school districts, view all photos, walk down with street view on google maps, do a sex offender search. Read our blog here for more tips and websites to do research. If there is a real deal breaker, know about it in advance and don't waste everyone's time. Remember, a lot of the homes on the market are occupied so an appointment has to be arranged with a property manager and a current resident!
- Don't be so picky. I know, you want a fabulous house for as little as possible, we all do! With low availability, you can't be picky about
- Not all homes are brand new or just remodeled. If that's what you require, you will have a harder time finding a place and will have to act fast.
- Sure, East Hill is a great place to live but with only 5 rentals available in the area and a median price of $1,000 per month, it's nearly impossible to find a 3 bedroom 2 bath affordable rental in the area. Downtown is similar with very few available and the majority being smaller, older homes in outlying areas of Downtown.
- Gulf Breeze schools are among the highest rated; that's why there's less than 20 properties for rent in the area with only four rentals in Gulf Breeze Proper and nothing available on Pensacola Beach. The average rental rate in Gulf Breeze is currently $1,700.
- As we approach PCS season, we see limited availability especially nearby the back gate of Naval Air Station. Expand your search area.
- Come prepared! We see great applicants miss out on homes every day as we are getting multiple applications on the most desirable properties. Be flexible and available for open houses and showings. Be sure you have your deposit ready when you apply.
- Have a folder with the following documents ready for when you find the right house!
- Driver's license copy for all adults over 18 residing in the property
- Pay stubs or income verification for at least one month. Have all forms of income available and documented for each adult.
- Photos of any pets you may have
- Previous landlord information including phone and email address. Better yet, ask your current landlord for a letter of recommendation stating your rental rate, dates of residency, and contact information.
- Have a folder with the following documents ready for when you find the right house!
- Be weary of scams. Unfortunately, people like to take advantage of others when inventory is low. Never send your personal information via email or send money overseas without verifying. Craigslist scams are common and scammers are smart about their scams. They even create email addresses to mirror the actual owners name. This happens all the time so please be careful when leasing from owner, especially from out of state.
- Consider Purchasing. In 2011,the average rental rate was $960 per month. The average Pensacola rental is now over $120 more expensive per month representing a 13% increase in rents over the last four years. Interest rates are low. Talk to us about your options to own your own home! Unsure about whether you have the funds required to purchase? Look into first time home buyer bond and grant programs. If you want more information, contact our office or email me here.
originally posted 03-01-2016
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- Considerations when Purchasing a Pensacola Multifamily investment
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