North Port or Port Charlotte? New Construction! Good or bad idea?

Question

I'm currently in the process of looking at model homes and have my house built. The problem is where ?

North Port seems to be up and coming very quickly. A lot of new constructions going up. The new Braves stadium seems to have brought in a lot of attention to the area. It's also part of Sarasota County which is a positive. Close to all the beaches. The land is super cheap.

Port Charlotte seems to be already populated and established with tons to do. All of the above is also true for Port Charlotte minus the county and the land (it's not outrageously priced, but decently priced)

The home in North Port are on the older side and I can buy land in a good area and build a home for the price people are selling their homes for (currently everyone is asking for above market)

Port Charlotte you can find newer homes, but for the same price as a new construction.

Our goal is to buy and hold for 5-10 years North Port seems like the ideal place for this, but what's your thoughts? I can't be the only one thinking about this.

If North Port is the ideal city what zip code should I look at? What should I avoid? Same for Port Charlotte.

Thanks BP

Mike Terry · Answer

I flip in Port Charlotte.  Things to be aware of.  This is mostly a rural to literally sub urban area.  Most homes are on septic and well.  Some have city water and remain on septic.  We have flipped 2 homes there and both needed new septic tanks and drain field.  Area is appreciting fast because there is a severe housing shortage here and people are coming to all of Florida from high tax states (New York, Connecticut, New Jersey, Massachusets, Illinois).  I don't see that abating.  The country's population continues to age and many are financially underprepared for retirmentment.  Covid 19 has accelerated this trend.  If you are a 58 year old and you have been laid off due to the virus driven recession.  Your job is probably not coming back.  Many of these people have most of their wealth in their home in high priced markets.  So they are choosing to sell and take advantage of buying a home in affordable Florida markets.  So I think the demand for housing in Florida will be steady.  I don't think building is a bad idea in that market.  Growth will come and both areas are among the cheapest in coastal Florida. The reason I don't build...exposure to an extending time frame, building permits are causing delays in both counties right now as local governments deal with a backlog after being shutdwon in April through June. Spec building is inhently riskier than redevelopment.  Land is cheap, but preping a lot, clearing, and septic are expensive.  We can turn flips in 45 to 60 days.  We are buying at a or below 70 percent rule in a rapidly appreciating market, hard to beat with new builds.  Just some things to think about for you.

Alvin Taveras · Answer

@Steven E.

Great question. The areas of Port Charlotte, North Port, Rotunda West & Cape Coral have become very popular for investors. A new construction (if done correctly) can often be a much better value than a resale home especially if you consider the cost of ownership. One of the key questions you have to ask yourself is whether you want to figure everything out on your own; buy a lot, select a builder get a construction loan, and get an end loan, etc. Alternatively, you could partner with investors with properties currently under construction and simply get an end loan on your selected property. Often times this dramatically reduces the issue with build time, as they are already under construction.

@Mike Terry brought up some good points with regards to flood zones and builder quality. Tenants aren't going to pay more just because their landlord needs to pay higher insurance premiums.

@Alissa Kronovet; As far as which market, you want to go a bit more granular and actually look at the street address, understand future zoning, development plans on a busy rd, near schools, etc. Market wise, you can go wrong. Address wise, there will be some that are more favorable than others. You'll definitely want to comb through this to identify the best option.

Let me know if I can provide further assistance.

Rommel R. · Answer

Do you know any reliable contractors in the Port Charlotte area? Looking to start BRRRRng soon!

Symone Gordon · Answer

Anyone know of a good property management team in the Port Charlotte / Rotonda West area?

Mike Terry · Answer

@Randall Re II happy to connect.  I'll sen you a PM.

Randall Re II · Answer

Mike, I'm a veteran thats currently deployed. Would you be against me picking your brain to see what else I can learn from your experience in flipping and new home builds in the PC/NP area? Ive been in that market for a few months and trying to learn and do as much as I can with the limitations that I have being overseas and with doing most of the stuff on my own.

Alissa Kronovet · Answer

@Steven E.

We are talking to Estero Properties about a turnkey new construction. They seem great, we are just still figuring out which market we want to invest in.

Amol Kulkarni · Answer

I am REI (still trying to learn) - How is 33981 zip code for buy and hold. How are rents and overall appreciation. Thanks

Steven E. · Answer

@Mike Terry

Thanks for this information! I'm still doing my research. If you happen to hear any good recommendations please shoot them my way.

Mike Terry · Answer

Yeah sorry can't help you there, my partner is a contractor and he is contemplating some new builds at the moment, but I have not considered it.  Multifamily is hard to come by I may be interested in building some tri's and quads.  The current cost to build and exisiting inventory is pretty divergent ( existing ins very expensive and is all less than 1% rule in my market.  I would never use a builder that wouldn't let you pick your materials or at least designate, budget, mid grade or high end.   Builder grade is what it is.  I would think with some research you could find a builder with plans.  I like working with small companies, more control and communication.

North Port or Port Charlotte? New Construction! Good or bad idea?

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