Condo in Naples Florida

[Jesse Bowie]

Hi! First-time poster here! My husband and I have been talking about investing in real estate for some time now. I will admit I am not as into the idea as he is. We own a home in Mass and will be renting it out in the summer on a week to week basis in the next 2 years. In the coming months, we will have the opportunity to buy a condo in Naples Florida a very ideal location. It is a small 1 bedroom first-floor condo new AC, hot water, floors, and windows. the association has very very cheap HOA's. The approximate purchase price will be $125,000. Depending on the interest rate and the stock market performance we will either be cash buyers or get a loan. Does this sound like a good idea? What are the approximate rents in this area of Florida?

[Ray Slack]

Have your realtor pull the comparables for the condo building..  and surrounding buildings.  You need to know

1. What units sold

2. The date of the sale

3. The square footage

4. The sellers concessions.  That is seller paid closing costs for the buyer.

5. HOW long the unit was on the market and if there were any price drops while on the market. 

Tell your agent you want to sell ALL the sales . Not just the ones he thinks support the price you are paying. Many agents will leave out sales significantly under the price you are paying so that you think you are getting a deal. 

Then you will know for sure you are not overpaying for it. 

As far as paying cash or getting a loan..  If you have any kind of investment knowledge or have a financial planner they will tell you as I am telling you.. GET A LOAN!! interest rates right now are 2-3% which is the lowest rate in my lifetime.  Any decent investor should be able to earn 5% return on their money.. So, keep your cash and invest it and use the banks money at just 2%.  

If you are renting out your home in Mass, the florida Condo would be your primary residence which has some advatanges.

1. No state income tax in Florida.

2. Better interest rate on FLorida condo mortgage since it would be your primary residence as opposed to a rental or 2nd home. 

I will say also that if you have a lot of equity built up in your Mass house check the capital gains laws.. If you sell it within 3 year of moving out you can still get the capital gains exclusion of $500k for a married couple. ( you must have lived in it for 2 of the last 5 years) If you have a lot of equity this can be a HUGE tax savings you don't want to lose. You can move back in it later and live 2 or more years to regain the CAP gains exclusion before selling also.