Are you looking to invest in Sarasota? Well, that can be a potentially lucrative decision!
Home to approximately 57,000 residents, Sarasota is a city in Sarasota County located on the southwestern coast of the country. The city is known for its sugary white beaches and rich, cultural amenities.
So, is real estate investing in Sarasota worth it? Yes, absolutely!
Sarasota continues to be one of the best places for real estate investing in Florida. Here are some of the reasons why:
- The city's economy is strong and diversified. It's primarily driven by education, arts, tourism and financial services. As a matter of fact, it was recently ranked by CNBC.com as one of the best 20 places in the country to start a business.
- The weather is great. Even during the cold winter months, the weather remains dry!
- The city is attractive. Each year, both local and foreign tourists visit the city to enjoy a variety of activities. There are plenty of beautiful golf courses, rich arts and culture, many fishing spots, a variety of unique shops, white sandy beaches and more.
- Sarasota real estate is hot right now. Even after the adverse effects of Covid-19 on the economy, the real estate sector continues to grow. Experts at Zillow expect the values to continue increasing by as much as 3.4% over the next year.
- Homes in Sarasota are comparatively affordable. While the average city resident spends around 15% on mortgage repayments, Sarasota homeowners only spend around 9.7%.
- The population is slowly rising. It has grown 0.51% since the turn of the century, according to the U.S. census data.
With that in mind, there are a few factors every potential real estate investor has to consider before making a purchase - and one such thing is the location. The location alone can break or make your investment.
Luckily for you, we've done all the research for you to help you buy in the right area.
Best Neighborhoods in Sarasota for Real Estate Investing
Are you targeting young professionals or suburban families? If so, Fruitville can be a great option to consider. The neighborhood is home to about 14,000 residents and boasts of excellent schools and parks.
The median cost of buying a home here is $245,000. At that price, you can expect to make a gross rental income of about $2,400 every month. You may even earn more should you conduct renovations that make your property more appealing to prospective tenants.
2. North Sarasota
The area is census designated and is estimated to be home to about 6,982 people.
With just a median home price of $111,000, this area offers plenty of appreciation potential. In fact, according to BestPlaces.net, homes in the last l0 years have appreciated by 5.6%.
While the rent you collect may be slightly lower, it can be an excellent option for an investor looking to make a foothold in the area and appeal to college students as well as ageing renters.
3. Sarasota Springs
Sarasota Springs is a census-designated place in Sarasota County. The latest census figures estimate the population to be 15,854. The median home value here is $187,000.
The area is particularly ideal for renting to families as it is a safe neighborhood and the schools are highly-rated.
Now that you know Sarasota's best areas to invest in, we will offer you some additional tips to successfully purchase a real estate property.
1. Know your Budget
How much are you willing to put into your investment, and how are you going to finance the purchase? Do you have the cash, or will need to take out a mortgage?
If you'll be taking a mortgage, then ensure you get it arranged before you start shopping. The last thing you want is to look at $850,000 beach condos when you can only afford a mortgage of $400,000.
2. Hire a Realtor
This is an important step that many first-time buyers often ignore. If you lack local knowledge, hiring a realtor can help you save time and avoid making potentially costly mistakes.
3. Calculate the Potential Margins
Of course, you will be looking to make profits from your Sarasota property. Therefore, before closing on a deal, ensure you have a rough idea of how much rental income you should expect from the property.
As a general rule of thumb, your expected rental earning should be at least 1% of the total purchase price. So, if your purchase costs sum up to, say, $200,000, then expect to earn a monthly rental income of $2,000.
Note, however, that this is the gross income and not your profit. To calculate your profits, you'll need to factor in your expenses – and expenses generally amount to 50% of the monthly rental income.
4. Understand the Risks
No investment is free from risks, and real estate is certainly no exception. Some risks include:
- You may have a hard time filling your vacancies.
- The Sarasota economy may take a downward turn.
- You may rent to a problem tenant.
- The home you buy could have underlying problems.
Luckily, you may be able to avoid such problems by hiring a professional and experienced property management company or a good realtor.
There you have it – everything you need to know to successfully invest in Sarasota real estate. If you are a first-time investor, hiring a professional to assist you along the way is particularly important.
Anchor Down Property Management can help. We can guide you and help you buy the right property in the right location, as well as help you find quality tenants. Contact us today for more information.