Investing in Naples Real Estate

Types of Investors

Most buyers seem to be interested in the investment potential of any real estate purchase. But it is a matter of types.

Buying Purely for Investment – These are buyer that are looking solely at the overall investment return from the property. Meaning it will be rented year round or seasonally, and no or limited personal use.
Buying for Immediate Use – These are buyers purchasing for their own enjoyment. But if their smart purchase choice also results in a nice investment, then all the better.
Buying for the Future – These are buyers that intend to rent the property, maybe for the full season or maybe part of the season. So a combination of rental income and personal use. They usually want something that they find appealing and with good rental potential.

Cove Towers Naples

New Construction for Investment

New construction can be very appealing for investors.

Often they are buying homes to be built, so there is no carrying cost until it closes.
When buying new, everything is in pristine condition and warranties come with.
The builder sales staff is great at selling the investment opportunity.
If buying purely for investment, it could be a good choice. But usually not.

Return on Investment

All desirable seasonal rental properties provide similar annual returns. Generally, three months rents covers all the out-of-pocket expenses (not a mortgage). Add the fees, plus property taxes, divide by three and that is the approximate monthly seasonal rental rate.

The peak seasonal rental demand is January through March. For a property to rent in season, it must be the type of property sought after by seasonal renters. And that would be either:

On or near the beach
Something with a great Naples location
Within a golf community were the golf membership can be transferred to the renter
Within a community with wonderful amenities.

Rental Income Examples

Barefoot Beach Trail

Naples Beach Parks

Half of the entire 16 mile long beach is part of different park systems, governed by either the City of Naples, Collier county or Florida state parks. These areas have activities, rentals and concessions available.

City parks would be the Naples Pier area, and Laudermilk Park. The county has Clam Pass and Barefoot Beach parks. And the state has Delnor-Wiggins State Park.

Naples Investment Property FAQs

What Naples area or community will appreciate the best?

The best investment will be that property that can be purchased at the best price relative to it true value.

What price range is best for investment?

Generally the lower price ranges seem to present the best opportunities. There is a greater pool of potential buyers in the lower price range, and available inventory is low.

What is the return on an annual rental?

Monthly rents for an annual will be much less than the seasonal rent. Annual rents will typically have a cash return in the 3% to 7% range after out-of-pocket expenses.

How do I get it rented?

For seasonal renting, owners that take charge of it themselves have the best results, by listing the property on a rental site such VRBO.com or community bulletin boards. Those that do not want to hassle with things will have the property listed with a local agent. For annual rentals, it is best to have a rental agent.

How do I manage the property?

If there is a rental agent, then they manage things while it is rented. And then most owners will have a home watch person that checks on thing while vacant.

What type of properties rent the best?

For a property to rent in season, it must be the type of property sought after by seasonal renters, as described above. More condos rent than single family homes.

What type of rental restrictions are there?

Most communities will have a 30 day minimum rental policy. Most beach condos have a 90 day restriction. Some condos have 7 day or 14 day minimums, but these are viewed as more transient communities. Usually renter are not allowed to have pets.