Buy and hold: What would you choose, Florida or Wisconsin?

Buy and hold: What would you choose, Florida or Wisconsin?

Oconomowoc, WI · Member since 2013 · 4 posts · 0 votes

Hello Bigger Pockets,

I have been following this blog and podcasts for sometime now and it is a wonderful community!

I recently moved to Sarasota, Florida with my husband from Lucerne, Switzerland. We wanted to move back to the US to pursue real estate investing.

We moved here after graduating college because my grandparents and my parent live in the area.

However, after a few months we still feel this may not be home for us, we miss being around young people and enjoying all the seasons. We just are not beach town people.

We have saved 10,000 for a down payment and plan to get a homepath duplex and rent out one side. We are ready to buy, we have great credit and stable incomes.

The challenge is, our lease is up in a few months and we are considering going back to Milwaukee, Wisconsin (where I am from originally).

My question is: Where would you rather invest, Florida or Wisconsin?

Looking forward to hearing your opinions!

Sarah

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Dawn AnastasiPro Member

Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes

Originally posted by @Mike Lowery:

You cant deny that Milwaukee is also a place where you will see all four seasons....

Sometimes it seems ... all in one day!

Podcast Guest on Show #29

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Mike Lowery
Rental Property Investor · Milwaukee, WI · Member since 2013 · 180 posts · 104 votes
12y
Sarah,

Now you can say I am a little biased because I live in Milwaukee, but I think you answered the question yourself when you said you want to be by younger people and experience all the seasons. I dont know if many people will know both markets, but I think Milwaukee is full of young professionals, who have plenty of energy and are planning on settling down here. You cant deny that Milwaukee is also a place where you will see all four seasons....
1 Reply
Andrew J.
Realtor · Milwaukee · Member since 2013 · 60 posts · 10 votes
12y
Agreed 100% Mike Lowery, for all of Milwaukee faults (as every major city has) there is a lot of innovation, development, and energy in the city right now. I encourage to keep a watchful eye however, if the Milwaukee Bucks leave the city it is going to be devastating. Yes the Bucks are not very good, and I in fact have not been to a Bucks game in a few years; however, anytime a professional sports team leaves a city it is not good. The business brought to the downtown restaurants, bars, taxi service, etc will be completely gone.

Just my 2 cents, if you have any questions about the different areas/neighborhoods in the city I can do my best to answer any questions. There is a good following from Milwaukee on BP, and I am sure any questions you have can be answered.
1 Reply
Dan C.
Milwaukee, WI · Member since 2013 · 384 posts · 109 votes
12y
@Account Closed My two cents would be decide where you most want to live and then invest in that area. If you end up living where investing is difficult (high prices) you could pursue investing in Milwaukee. Though investing remotely is a challenge, you would have some advantages in that you would have local connections and a familiarity with the neighborhoods.

@Andrew J. - yeah the Bucks leaving would be a real bummer and certainly not a good thing. I tend to think it would not be devastating though for the area in the big picture.
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Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
12y
Originally posted by @Mike Lowery:
You cant deny that Milwaukee is also a place where you will see all four seasons....

Sometimes it seems ... all in one day!
Podcast Guest on Show #29
2 Reply
Ana Adler
Rental Property Investor · Saint Petersburg, FL · Member since 2013 · 11 posts · 7 votes
12y
@Account Closed I have never been to Milwaukee but I live in Florida, just up the road from you in St Pete. I find Investing in this area is challenging to reach any decent numbers. First, there is required hurricane insurance (no small number). Now we are looking forward to mandatory flood insurance in the near future. Congress caved this session and postponed the legislation for a few years but it's only a matter of time. As for me, I am looking elsewhere.
0 Reply
Robert Taylor
Broker, Investor, Property Restorer · Fox Point, WI · Member since 2012 · 288 posts · 120 votes
12y
I grew up in the Milwaukee area and still live there now. I've also spent a good amount of time in Florida as well. I'd say that besides WI and Connecticut (where I did live for a while) I've spent more time in FL by far than any other state. I think that they both have their pluses and minuses. The Milwaukee market seems to be much more steady and predictable over the long term compared to most areas in FLA. I think in Milwaukee, you can pretty much expect that the market will continue to appreciate at a certain, rather slow pace, assuming of course that we don't have any more crisis like we had back in 2008. FLA's markets seem to go through a lot more localized boom and bust cycles from what I've read. I think that the Miami market is the most likely to have booms and busts, but from what I remember, it happens in many of the smaller markets like Sarasota as well. Now, that presents kind of a double-edged sword, because obviously of you're lucky and time things right and buy in before one of the mini-booms, you have a chance to make some great shorter term returns if you're able and wise enough to sell out at or near the peak, but conversely you could also end up buying into a bust cycle and losing just as much! Compared to that, the Milwaukee market would be pretty predictable, I think you'd simply see a much slower but more steady and dependable appreciation over time in Milwaukee.

Now, one big disadvantage to investing in Milwaukee (or anywhere in WI) as compared to FLA are the outrageous property taxes you'll be stuck paying in WI, which make FLA taxes look like pocket change. In WI and especially in certain places like the city of Milwaukee and most of Milwaukee County, the taxes are as high as they get! In approximate numbers, on a $300,000 home in the city of Milwaukee you'll be paying somewhere around $9,000 a year in property taxes. That's what I call a major expense! I'm not as familiar with the taxes in FLA, but I do know that they're a fraction of what they are here. Now, if you simply invest outside of Milwaukee County, such as in Waukesha County directly west of Milwaukee County, you'll be paying considerably less. In the city of Brookfield for instance, a house with the exact same valuation will cost you around $5,000 a year in property taxes, still nothing to joke about but also a heck of a lot less than in the city of Milwaukee!
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Dan C.
Milwaukee, WI · Member since 2013 · 384 posts · 109 votes
12y
What Robert said about the property tax rate in Milwaukee is true. However something I've noticed is that the market seems to naturally smooth out the tax differentials. So your money goes a lot further in many parts of the tax high city of Mke, getting you a bigger house to rent out. Bottom line is, if you do it right you can definitely get a good cash flow even in a city where the property tax is high.

Another great thing about Milwaukee is the huge inventory of inexpensive duplexes. Buying a duplex to move into is a very easy way to start out in real estate investing. I don't know if there are parts of Florida that are like this or not.
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Tony Cavalli
Residential Real Estate Agent · Santa Barbara, CA · Member since 2012 · 233 posts · 45 votes
12y
I've never been to Florida and I invest in Milwaukee all the way out here from California... (I know Aaron Mazzrillo is just yelling at me after reading that.) so my answer will have to be milwaukee. I see good cash flow and that makes me oh so happy. You can live wherever you want and invest wherever you want as long as you really want it.
1 Reply
Gerald K.
Real Estate Investor · Kirkland, WA · Member since 2012 · 480 posts · 116 votes
12y
Originally posted by @Tony Cavalli:
I've never been to Florida and I invest in Milwaukee all the way out here from California... (I know Aaron Mazzrillo is just yelling at me after reading that.) so my answer will have to be milwaukee. I see good cash flow and that makes me oh so happy. You can live wherever you want and invest wherever you want as long as you really want it.

How did you do it? Did you go with a turn key company or build your own team? How has that worked out for you?
0 Reply
Sarah Hart
London · Member since 2013 · 24 posts · 5 votes
12y
Hi Sarah

I lived in Sarasota for a short period and have my portfolio there. I'm in my mid 30's and I must admit I wouldn't live in Venice because it didn't seem to have any life but I would invest there, I know many investors have, and the over 55 market is always very good with their rent.

I have a portfolio in Sarasota, generally around south and gulf gate, you can still buy some great duplexs. I manage my portfolio from the UK, I have a great team on the ground which took me a while to build up but got their in the end. I only really know the SW Florida market, in fact I used to live in Switzerland as well, in Neuchatel.

I get great passive income and the capital appreciation is currently looking good at today's values. I also think that if the gov change their stance on immigration, you'll see a hell of a lot retirees from Northern Europe looking to come over for six months of the year, and potentially rent. The schools are also a good pull in Sarasota, what I noticed was the parents moved down from the Northern States nd the kids seemed to have followed, that was defo the case in my street. What I found were people in their 30-40's didn't have traditional work and could work remotely for their work, it does seem to be moving that direction.

Really though Venice and Sarasota seem like chalk and cheese

Good Luck with what ever you do
0 Reply
Tony Cavalli
Residential Real Estate Agent · Santa Barbara, CA · Member since 2012 · 233 posts · 45 votes
12y
@Gerald K. All those details will be coming later in a thread ill be starting... but I did a lot of networking, I did not use a turnkey property company. I had to take a step back and realize what my advantage was then use it my advantage... I had no credit, and no time, novice knowledge back in early 2013 of real-estate but I saved money in the bank.
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Michael B.
Apopka, FL · Member since 2012 · 207 posts · 120 votes
12y
As a Floridian, my answer is ... neither.

Figure out who you are and where you want to be. Get your career going and save some money first. Most homepath properties need more than $10,000 in renovation just make them pass health codes, much less be rentable. And a landlord (not to mention a homeowner) needs funds to address problems as they come up.

It's no fun being an undercapitalized landlord. And living next to your tenant isn't for the faint of heart either. Before you buy, save at least triple what you have (maybe quadruple) and then take account of where you want to be, where your career skills will be put to best use -- essentially who you both want to be when you grow up.

Also learn how to budget, save, and invest your money, knocking out any consumer debt you've accumulated on the way.

Your time to invest will come, but not now. Get your careers going and save money. When that time comes there will still be places to buy in both Florida and Wisconsin.
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OP
Oconomowoc, WI · Member since 2013 · 4 posts · 0 votes
12y
@Sarah Hart Thanks for the advise, that's inspiring to hear you manage that from the UK. I would love to have a team and be able to spend my summers in Europe and have some rentals taken care of.

We have decided to look a bit more into Florida, as we just moved here from Switzerland maybe we aren't ready for another big move! Everyone says we need to get up to sarasota to find more energy and younger people!
0 Reply
Account Closed
OP
Oconomowoc, WI · Member since 2013 · 4 posts · 0 votes
12y
@Michael B. I understand your point of view for sure!

But I left Switzerland to follow my dream of working for myself and being financially free. If I wanted to build on a career I would have stayed in Switzerland where you are HIGHLY paid and your job and your government take care of you.

A career with a company is the last thing I want. As I see it, I am young and can afford to take risks as I have no debt no kids.

I want to do this when I am young because if it fails I have a nice back up of going back to Switzerland where cashiers make $28 an hour :)
0 Reply
Sarah Hart
London · Member since 2013 · 24 posts · 5 votes
12y
If you are only renting at the moment, go along to some meetings in Sarasota and research the market, to find something that fits your requirements. I would also check out Adam Robinson a broker who is a wealth of infor, he has offices on siesta key opposite michael saunders office and offices in downtown opposite the general post office. I would suggest buying a duplex in sarasota if that's the way you wanna go. I personally couldn't live next door to my tenants. It's right what you say, the younger you start the better. I started to invest when i was 21 and had a portfolio in London and the UK which enabled me to be financially free if that's what i wanted, I managed to do more rehabs when i was younger as i didn't have kids, but as I found out on my first rehab in Sarasota, having a baby is not easy when you have a major rehab to do....I say go for it, like you say the worst case scenario is that you'll go back to Switzerland.

If you look around south gate many of the properties have mother-in-law suites and you can easily rent those for $500 per month, you can pick up those homes for $100k, so you can live in the major part of the home the zip code is 34239 it's a great area as it's close to Memorial hospital, downtown and siesta key, also many students in Sarasota due to the University and Ringling School of Art

Good Luck, I love Sarasota as it's a little gold mine that so many people overlook, I hear so many people heading to Orlando, I think it must be so hard to find great deals there.
0 Reply
Susan Gillespie
Investor · Saint Paul, MN · Member since 2012 · 128 posts · 56 votes
12y
@Account Closed

A duplex can be a great first purchase that you can later convert to full rental. For choosing a location, I would consider:

-your primary knowledge of each market, including real estate prices, taxes, rental supply/demand and expenses by location

-strength of your local network and contacts, including people you know and trust

-your personal goals and longer term strategy, including exit strategy

I have experience in Minnesota and Florida, and generally find FL expenses higher and market conditions more dynamic.

I second @Michael B. 's advice that you save more than you think you'll ever need. It'll give you a cushion, peace of mind and more options in the long run.

And I would run a side-by-side cash flow analysis to see how your options differ. Research your numbers and you'll get a better idea of how rental income and expenses vary by location.
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OP
Oconomowoc, WI · Member since 2013 · 4 posts · 0 votes
12y
@Dawn Anastasi @Andrew J. @Mike Lowery

After much consideration, my husband and I have decided to move to MKE in April!

The decision came easy after my husband was offered the opportunity to work with a general contractor and property manager who invest in rentals in Milwaukee! We will have the opportunity to save up more money and learn about this business till we find a duplex to buy.

Time to trade in our flip flops for something warmer :)
0 Reply
Carlton B.
Rental Property Investor · Milwaukee, WI · Member since 2013 · 281 posts · 133 votes
12y
So if your coming to Milwaukee @Account Closed there is a meet up every month you should look us up. I attended my first meeting on the 25th, and there is lots of sharp investors to learn from.

https://www.biggerpockets.com/forums/521/topics/95876-biggerpockets-local-meet-up-for-milwaukee-members?page=1
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Ramon Jenkins
Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
12y
Account Closed

Good luck with your relocation to Wisconsin.

I look forward to meeting you at some of the local meet ups.

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Susan Gillespie
Investor · Saint Paul, MN · Member since 2012 · 128 posts · 56 votes
12y
@Account Closed congrats on your news and good luck with the move. April is good - flip flop weather will come soon, and the snow, ice and polar vortex will be a distant memory...
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