Naples, Florida is a vacation destination for people from all over the country and the world. These travelers pay top rental rates to stay in homes near the beaches, great restaurants, nightlife, tennis and pickle ball courts, golf courses, marinas, retail shops, boutiques, and more. As an investor looking to purchase, own, and lease out a seasonal rental property you need to know what makes different areas of Naples tick, the price ranges to buy a property in a desirable area, and the return on investment that you can expect.
LOCATION: No secret, the best vacation rental properties are going to be on or near the beach. Walking distance or a short cruiser bike ride to the Gulf of Mexico is what most people want. Families or groups with a lot of beach gear are going to look for adequate parking for their vehicle. Golf communities are also going to be in demand during “season,” but there are going to be restrictions on the number of leases, the duration of each lease, and the golf availability to tenants. North Naples enjoys nearby restaurants, bars, cafes, nightlife, movie theaters, shops, boutiques, Whole Foods, Publix, Trader Joe’s, Seed to Table, conveniences, public tennis and pickle ball courts, parks, Mercato, Pavilion Center and Waterside Shops.
NEIGHBORHOODS: To maximize the rental income throughout the year, the best communities will be ones without an HOA that restricts the number and length of lease agreements. Also, to reduce carrying costs, you would prefer a community without annual or quarterly fees. This makes Naples Park heaven for investors who enjoy the rental income but also the added benefit of the appreciation associated with a single family home located west of Route 41 (Tamiami Trail). The exception to this rule is a community – Pelican Bay – that has such a huge demand the rental rate is high enough that it overcomes the additional costs of Homeowners Association and/or condo fees.
Typically, condominiums are going to have regular fees that make a positive cash flow more difficult as well as rental restrictions. In the case of beachfront condos, if you are not going to use the property yourself during the high season then it might make sense to rent these months. We do have a rare situation at Regatta with a very liberal rental policy which makes for a solid investment for a condominium project. Regatta is walking distance to the entrance to Vanderbilt Beach and has a resort-style pool.
DESIRABLE CHARACTERISTICS of the PROPERTY: For a single family home, there are several things we look for in an investment property. Some of those characteristics are for appeal to a vacation renter, some lend themselves to attractive photography, and some are for the purpose of maximizing appreciation:
- Swimming Pool to get the highest rate during season and to be rentable during the summer. Your renters are coming for vacation. During the day, the sight of shimmering water and the sound of a bubbler on a tanning shelf is soothing never mind taking a dip. In the evening, nothing says vacation more than sitting pool side with the pool lit and enjoying a glass of wine or a beverage with friends and family. Extra bonus if you have a spa. We do have prospective tenants that insist on a home with a spa.
- Southern Exposure on the pool, if you can get it. You want the most amount of sun on the pool and backyard during the winter months. In the case of northern exposure, if the pool site is positioned away from the back of the house and the roof of the house is low enough, that situation can work well, too.
- Landscaping is important. Most of your visitors are coming from points north and cold. They want to feel like they are surrounded by a tropical paradise. Certain palm trees, Bird of Paradise, Clusia hedges for privacy are all good for creating that vibe. Curb appeal at the front of the house is key. Make it lush, make it tropical, add color, and maintain it weekly.
- At least one room with high, vaulted or cathedral ceilings. This is for natural light, a feeling of space, but also the appreciation factor. Higher ceilings or having a family room with a vaulted ceiling is going to add years to the life of a house and it’s going to sell quicker and for more money when you sell.
- Floor plan is critical. The flow of a floor plan is important for the visitor’s enjoyment but also the “money shot” for photography is a floor plan that is open from kitchen to family room to lanai to the pool.
- You need a garage. Two-car garage is better than one for extra space as well as appreciation. Beach chairs, beach umbrella, and cruiser bikes all need to go in the garage alongside the regular things that you would find in a garage. Room for a car is a bonus and desirable.
- Furnishings. Your tenants are paying good money for a vacation in “Paradise.” Give the home a coastal vibe that is fun, colorful, artsy, tasteful, and functional. Upgrading is good and “kitschy” is bad. Top dollar goes to quality, style, comfort, with an occasional whimsical touch that people love and remember but wouldn’t do in their own home up north. Memorable beds are important – don’t skimp here – as you want your tenant to think “those were awesome beds in that place.” Properties listed in our local MLS system are shown as unfurnished, furnished, turnkey, or negotiable, so just what and how much of it conveys with a purchase is going to case-by-case.
- Equipment. Think ahead to make sure that your tenants have everything they need for the best vacation ever. Cruiser bikes, beach supplies, blender in the kitchen, Bluetooth speaker for poolside tunes, plenty of televisions, plush towels, and many more details.
- Pet Friendly. Especially when tenants rent for a month or two or three at a time, they will want to travel with their dogs. There is demand for pet friendly rentals. Having a vacation rental property that is pet friendly adds income with non-refundable pet deposits. Depending on the neighborhood or a community with an HOA, pet policies for tenants may be restrictive so better to know the facts up front before you purchase.
For investment condominiums, the characteristics you want are good space, an outdoor area like a screened lanai or a balcony, parking, view, and resort-style amenities. These characteristics come after the priorities of location, knowing the additional carrying costs of condo fees, and an attractive rental policy.
Call us to talk about an investment property that is right for you. We know the local real estate market and we know investment properties. It starts with selecting the right property in the right neighborhood and getting it at the right price. Whether you are a pure investor or a vacation home buyer trying to cover some carrying costs when you are not in residence, we will negotiate the contract with your best interests in mind. We will advise on what to expect in rental income, guide you through the process to get up and running, consult with you on property management that best suits your needs, and assist in preparing the property.
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