Bradenton / Sarasota - Internationals are getting more and more interested in Florida Real Estate. Axel Weiss, Broker/Owner of Weiss Realty Bradenton, notices that many international investors realize it is the perfect time to buy an investment or 2^nd home right now. Most of these people don’t even expect to even get a mortgage here in the US. So they arrive with tons of cash. If you were a sell, wouldn’t you dream of a scenario like this…

 While in the past the majority of international buyers were retirees, the current buyers from overseas are getting younger and younger. Many of them are trying to secure a piece in paradise with a clear investment strategy. Use the home for a couple of weeks each year for themselves and rent it out to vacationers in order to cover the expenses like insurance and taxes. Just a combination of 2^nd home and investment.

However they have to keep an eye on one thing: Long term rentals don’t work, as they want to use the home or condo several times per year for themselves. They could rent it to snowbirds, but many homes are just too high priced in order to rent for 3 months or more. And many retirees are locked with their pension portfolios right now and have to scale back on their winter plans.

So these foreigners are advertising their homes as extended vacation places for other people who prefer the amenities of living in a community against staying at hotels for stay between a few weeks to several months.  Many communities in the Bradenton/Sarasota area however show relatively tight rental restrictions regulating the number of times per year a property can be rented out and/or minimum leases terms. Some restrictions are manageable, but if you are limited to a minimum of 6 months or just once per year, or even no rentals at all, it’s a “No-Go” for every investor.

Recent calculations show a loss in usability of about 25% – 33% for an identical property with or without rental restrictions. That’s about $100,000 on a $300,000 property in usability loss. The stricter the restriction the higher the loss. Because not everybody is planning to rent at this point the loss in property value might be a little less dramatic. As – however – in future more and more people are living on tight budgets, condos and homes with higher restrictions will have a lower potential of possible gain in value.

 For the homeowner it’s a disaster, just imagine: If somebody from your neighborhood knocks on your door and asks for support of new rental restrictions, ask yourself why they want to take $100,000 from your money? And if your association already has strict rental restrictions in place, ask yourself what you would do with the $100,000 if they get rid of them.

And the community is suffering, too: You have foreclosures or unpaid dues in your community? Maybe the owners are just not able to rent / sell their place as fast as possible. By time, they get late in the HOA dues and the community is suffering.

A well-off investor from overseas with cash in a property will probably be the best add-on for your community. So watch out and make sure you stay attractive for this clientele!

For more information on how to market your property locally and internationally please contact:

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