Sarasota and Manatee counties are excellent areas to own a rental property. However, the outlook is negative not if you don’t already own a home according to recent reports. Here, we’ll compare two articles published in the Herald Tribune. Each pulled their data from surveys and reports conducted by CoreLogic and Apartment List.
The first of these reports was written at the beginning of May 2019; the second appeared on July 8th, 2019. While only months apart, they both deliver information that shows a general upward trend for Southwest Florida when it comes to rentals. However, both also note how those rising rents make it difficult to transition into homeownership. While this is the best outcome for current landlords, someone looking to get in on the market in that area may find it difficult. Real Property Management of Sarasota & Manatee is staffed by a team of experts in research who can find you the best deal in the market—and help you set competitive rates!
Why Sarasota? Because It’s (One Of) the Best!
“Sarasota named one of the best places to live in America” boasts the headline of a short blurb of an article posted to yourobserver.com on April 9th, 2019. Though only four sentences in length, this post had a lot to say about the city of Sarasota. Not only did the city rise in the national rankings from 34th to 18th, but the subheading claimed the town to be number 3 in the nation for retirement. The last sentence declared Sarasota to be the best city to live in all of Florida.
Now if that doesn’t convince everyone to make Sarasota their home, I don’t know what will! The average price of a home in Sarasota County is higher than the national average by almost $35,000.00 and higher than the Florida state average by $19,000.00. However, as recently as May of this year, the number of houses sold went up 6.1% in one month.
If you’re not from Florida or have never had the chance to visit the Sarasota area, you may not know how it ranked so highly. According to a local Fox News report from July 7th, 2019 the city of Sarasota’s 18th ranking was based on the following:
“U.S. News used job market, affordability, quality of life and the “desirability” of the city to create their rankings…Sarasota was credited for its arts-and-culture scene, as well for its beaches, which annually rank among the best in the world.”
Art and a beautiful beach scene, who could ask for more? Landlords have certainly been able to ask more of their tenants when it comes to rental rates. While rising rents seem to have slowed as we ease into the second half of 2019, for current property owners, this is proving to be an excellent year!
May 2019: A Landlord-Friendly Climate
Though these rate increases which are upward, in general, are fantastic for landlords, those looking to transition into homeownership are finding it difficult. As monthly rents increases, their chance at setting aside funds for a down payment on a home decreases.
CoreLogic’s MarketPulse report from March 2019 shows that millennials are buying homes at an increasing rate. In the central U.S., they claim over 50% of applications in certain cities. However, the rate of application for home purchases in Florida for millennials is only 24%. This is a tough outlook for Florida, especially more expensive counties like Sarasota, as home buying is an essential facet of investing in property—and the economy at large.
July 2019: Putting the Brakes on Rising Rates
The author of both pieces, John Hielscher, describes the rental hikes as slowing down, giving renters a “break” from continuous increases. They note that the city of Sarasota has seen increases every month since March. The average rental rates for most cities in Southwest Florida are above the national and state average, and the ongoing increases to the monthly rent are still affecting potential homeowners—and investors.
The Points Add Up!
If you’re new to the housing market, you may think that a rise or fall of one percent, a half percent, or less shouldn’t have much effect on your investment. Much like an interest rate on a mortgage, a rise or fall in the housing and rental market represents thousands of dollars. Each little 0.1% tick up or down adds up over the year, becoming the difference between a good year or a bad year for your investment. Too many ticks downward and that 0.1% adds up to full percent, which can spell out significant losses for you as a landlord.
At Real Property Management Sarasota & Manatee, we understand the ins and outs of the housing market specific to your area. Our staff of expert property managers wants to assist you in reaching your financial goals and navigate the market, all while keeping your property in excellent condition. Enjoying all that Florida life has to offer isn’t just for tenants! Leave your property in the hands of the professionals, and get back to what matters most!
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