Property tax and maintenance in Tampa, FL
New Mumbai, Maharashtra · Member since 2016 · 21 posts · 1 vote
Property tax and maintenance in Tampa, FL
Most Popular Reply
Investor · Tampa, FL · Member since 2016 · 681 posts · 288 votes
10y@Yeshudas Nair, Hello again, one of the things that people do not understand, who are not in the business is that properties do not always go up in value. I belonged to a Stock Investors Club here in Tampa, Florida for ten years. We had about 500 old guys with money, who were just looking for a "safe place to park their money and make some money." I was a "newbie" who had made some money with Mutual Funds and now I wanted to learn how to short term trade for more returns. Stock Investors are looking to Buy Growth and Hold for as long as possible. Stock Traders are looking to Buy Value and ride the short term Momentum moves to make quicker profits. Right now, the Markets are Volatile, going up and down very quickly on a Daily roller coaster ride. So, it is very hard to Buy and Hold for a long time and have any guarantee of the price of the stock ending up and you Creating Wealth while you sleep. The Central Banks have destroyed the Fixed Income Bond Market, so that retired people who depended on Bonds making them interest to live on is done for maybe the next 20 years. The search for Yield has everyone thinking of buying Real Estate to make money. The Pros can give you the business numbers and percentages may work on paper, but, I am selling because I think that we are at a top and not a bottom in the Real Estate Cycle. The time to buy is going to be after the next downturn in the US economy. The thing to do now is to pay off all Debt, fill your garage with food and water and save your money in Dollars while we wait for the next downturn and the opportunity to pick up properties on sale. I am a gold miner too, but, I would not save my money in gold bars, or like you in India with gold jewellery. Imagine that next year we start the next Economic Downturn and the Sale of the Century is on. Do you think that you are going to be able to buy houses in the US with your gold bars? It is very difficult now in Europe with Negative Interest Rates at the Bank, to pay them to hold your money while you are waiting for the next opportunity. In foreign countries Negative Interest or really low interest rates are used to force the guys who have the money, to put that money to work and not just live off of the high interest rates. The Central Banks and the Governments want to try to Financial Engineer us out of the Recession and they can't. Now, back to the idea that you should be able to make money renting a house. Here in Tampa, rental houses do not make money. The people who can pay rents of $1000 a month or more, try to buy a home. So, you end up with the ones that are just starting out, with no savings or the ones that have to rent for life because they will never save any money. With 10 to 20% down and mortgage rates at 3.5%, what is the sense of renting if you will be staying in the home for five years or more? Take a chance and see if you can't make a Gain in Time and Sell tax-free as your Residence after Homesteading for at least two years. My rentals have always been under $1500 a month houses and mostly duplexes that made me at least $100 a month in positive cash flow. To give you another example I also have rentals in the oil field capital of Brazil where all the JOBs were until this newest and worst Recession started. My one bedroom and efficiency apartments rent for one Minimum Wage. The value of the minimum wage fluctuates with the value of the Real against the Dollar. Two years ago that was $550 US a month. This year that is about $250 a month. I built my properties and I don't owe money on them because it is extremely expensive to borrow money in Brazil. Interest rates on a Credit Card can be 20% a month. If you finance a car, any car, you can pay double the cash price in 2 years. Lots of Brazilians buy a new car and pay the outrageous interest rate until the car is paid off and trade it in for the latest model, considering the monthly cost like an expensive Lease vehicle. So, where I could have been making $6000 a month in rents and living on my farm, now I will be lucky to get back and make a couple thousand a month. The numbers you describe in Mumbai, don't work at all. So, trying to make money with rentals or even save money with Buy and Hold Real Estate in India is not possible. Do you know anyone from India who owns rental properties in the US? You know why? Because the Government used give Immigrants, zero percent loans to buy up all the Convenience Stores and the small Motels here. One 7/11 store on a weekend, can sell $15,000 or more in just wine and beer. Why would they try to struggle to make 1 or 2% a year, with luck, with rental property? That is why the guys in BP are always looking for a Deal and some Wholesaler who does the work to Search and Buy the Deals and resell them to the Flippers. Do you watch the Flip and Flop or Flipping Las Vegas type rehab shows on TV? Do a Google Search and try to find them on youtube.com to see how its done and how much they spend on sight unseen auction properties that turn out to be tremendous nightmares. And don't believe that you too can hire the best builders in town and install first class materials in your auction nightmare and make the kind of money that they say they made. It is hard to get the Big Picture of how things are in different countries for making money and what the tax consequences would be.Don't you have any partners here in the US who may be in the business? My best friend in Brazil told me that "you cannot think of business outside of the US as being the same in a foreign country." A lot of smart, rich, connected people were buying farm land in the US after the 2008 Economic Collapse. Those conditions have changed and if they are carrying a mortgage, they may lose those properties in this next downturn. The Chinese, English and Asian Buyers who are driving the price of luxury apartments sky high in the major cities around the world, are not immune to the Real Estate Cycle. The ones who are buying all the art and jewels and antique cars etc. All those Buy and Hold seekers of Yield are going to suffer the biggest losses in this next downturn. "The bigger they are, the harder they fall."
17 Replies
- Charlotte, NC · Member since 2016 · 23 posts · 5 votes10y
You can look taxes up in nearly every city by address. There's no state income tax in FL, so property taxes are higher than average. I have a house valued at $250k ish in St Pete and taxes (without homestead, it's not my primary residence) are over $5k per year. Maintenance is high... lawns/shrubs/trees grow really fast here so you can't cut any corners on yard maintenance. There are lots of grouchy retired people who will report you to the city for anything less than perfect yard. And many houses have pools - which get pricey to maintain too. I have a great deal on yard service - $80 mo, the pool costs $140 though. Depending on how close you are to the water - things fall apart fast... I'm amazed. And budget for storm damage too.
- 10yJeff CopelandBusiness MemberReal Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
@Amy Osterberg - If you want to sell your headache in St Pete, let me know! :-)
@Yeshudas Nair - You generally cannot base taxes on what the current owner is paying (which is readily available online through the property appraiser's website), because when you buy a property (usually at a higher price than the current owner paid), the property value is re-assessed the following year.
But, the good news is, property taxes are fairly easy to calculate. One formula I've seen published is (Purchase Price x .85) x 2.4%. In other words, 2.4% of 85% of the purchase price. In Amy's case above, this would work out to $5100 (almost exactly what she said she is paying). But if you bought that same house from her for $350k, the following year, you could expect the taxes to be closer to $7k, then fluctuate with the market after that.
As far as maintenance, it really depends. If you are buying a $350k new construction home, then you could expect close to zero maintenance and capex for the first few years.
If, on the other hand, you are buying a historic 1920's wood frame bungalow for $350k, then your maintenance and capex will be much higher.
On average, most investors allocate about 10% of their operating income to capital expenditures. Whereas, for routine monthly expenses like lawn care, pest control, or pool maintenance, you'd want to use actual expenses (and try to keep them as low as possible, obviously).
Buy and hold investors generally shy away from pools and properties that require flood insurance, due to the (arguably unnecessary) expenses associated with them.
And finally, another shocker to many out of state investors is the cost of homeowners insurance here in Florida. Be sure to get an insurance quote before making offers, because the premiums could be 2-4 times what you'd pay elsewhere and kill your cash flow.
Copeland Morgan LLC4.770 Reviews - 10yDave FosterBusiness MemberQualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
A lot of property appraisers will have a tax calculator on their site as an option as you look at the property. It's always subject to change with new levys of course. But it can give you a decent estimation of taxes at a certain purchase price.
The 1031 Investor5137 Reviews - New Mumbai, Maharashtra · Member since 2016 · 21 posts · 1 vote10y
Thank you so much for sharing your knowledge.
@Amy Osterberg
@Jeff Copeland
@Dave FosterSomewhere in a blog i read, Tampa, Fl is a good place for real estate investments. Then i went on a site and searched for properties, i saw a house which was wonderful and had many amenities. but it was almost a million dollar house.
I wonder, how do an investor find profits in such locality, paying such high maintenance and taxes for big houses, especially for a house that costs almost a million$?
What could be the rent one should expect for such house.? will that rent cover the maintenance and taxes ? - Investor · Tampa, FL · Member since 2016 · 681 posts · 288 votes10y
@Yeshudas Nair from Mumbai? Hello, that used to be New Delhi? I was there twice 40 years ago. Your right. Here in the US Rental Houses usually do not pay the bills and don't show positive income streams. That is why investors want to look at multi-family Duplexes, Triplexes and Quad buildings to rent. The problem in Tampa is that we did not build a lot of those during the Second World War and ended up with tons of 2/1 and 3/1 wooden homes for the military people at MacDill AFBase. So, you have to really search for a good property where the numbers work to pay all the bills and surprise expenses and give you at least $100 a month positive cash. If not, then you would only want to buy something to live in and hope that it will go up in value in ten years or so. If you can only stay for less than five years, you are better off renting unless you also know how to repair structures and then you can look for a fixer upper and do the Sweat Equity to repair and upgrade the house to live in and then sell in two years as you Residence for tax-free profits if you did the deal correctly. Your profit should always be up front when you buy anything. You can pay asking price if it is low money down and financed by the Owner, which is how I bought my properties. It is very hard to find a No Money Down Deal and make it pay off. That is more into the Lease-Option method and then you are kinda like an Agent without a license and really possessing for up to a year to resell the property or arrange financing to keep it. I know the basics in real estate investing and most of the guys on BP sound like they know all the business percentages and terms for dealing in properties. If you watch Shark Tank on TV you can get an idea of how the big business guys and gals look at "the numbers." Fascinating stuff, but, it don't matter if we are really at the top of the Market and ready for a big correction. The government could destroy all of our hard work in a couple of months with a change in the interest rate and more restricting regulations. You have to remember that Real Estate investing depends the same as with trading Stocks and Futures. There is a Market and it goes through Cycles of up and down and what you bought today for cheap, tomorrow could be worth half or less which is what I think is coming again. Look at Brazil, where I have property. Because China slowed down in the buying all the steel and aluminum and oil and lumber etc. Australia and Brazil who depend on exporting their Commodities have been hit with the worst recessions in their history. My properties just lost about 50% of their values this year. But, I am crying all the way to the bank because my lawyer just emailed me that I won my six years in court and I get all my properties back from a criminal who invaded them with a gun and has threatened my life and kept my friends from managing my rentals. Now, I can make plans for damage control and move back to my beach home and live off my rentals and farm. Being an Absentee Landlord is not the thing you want to be. Nomaste.
- New Mumbai, Maharashtra · Member since 2016 · 21 posts · 1 vote10y
:) Namaste Sir @Michael Haynes, Thank- you so much for taking your time and sharing your knowledge. Sounds really good that you had been in India twice.
And Sir Mumbai is a financial city like New York and New Delhi is the capital like Washington. Both are different cities.Sir do you have any suggestions or advice for which is the better state or city, right now in USA for Real estate investments and rentals.
- Investor · Tampa, FL · Member since 2016 · 681 posts · 288 votes10y
@Yeshudas Nair, Hello, Namaste, what I did when I started to look for an area to "farm" for long term hold rental properties for my retirement portfolio 35 years ago, was to look at the weather maps on the ship. I worked on oil tankers and we had weather maps that went back 120 years, showing all the hurricane tracks for the United States and Carribean. My concern was the Risk Factor with doing all the work and having one storm wipe me out. We have "Tornado Alley" that runs from Texas to Chicago and if you followed the news this last few years, the devastation of whole communities from tornadoes has been incredible. You in India have the Cyclones and Monsoon rains on the East coast of the country with tremendous flooding in Bangladesh. The second concern was what holding period was going to be necessary to realize a profitable business. It sounds like you are looking to buy something that is "in the path of progress" and appreciating visibly at the present time. A "hot" Market opportunity. The Pros and big Wholesalers in BP would know more about that. I just know from thirty years with a small rental business, that I would not want to be an absentee owner. That is why a small guy would want to find a good area to "farm" the available houses in that neighborhood to buy and fix up to flip or hold as rentals. The other caveat is if you are really wanting to deal with Tenants? That leads you to deciding on the type of property and the need to manage that property with the cost/benefit equation as it has to make money or don't do it. You have to decide how much money you have to put into the business. Do you really want to do any physical work at all to make money with real estate in the US while you live in India? You could make more money just investing in REITS and make even more if you know how to trade them. The Baby Boomer Wave of retiring 60 year olds is going to create a huge need for Assited Living Facilities and there are REITS to use to invest in those. You can compound returns from REITS if you can use Options to buy them and also know how to Short them if possible. For the next 20 years the prospects in the Emerging Economies like India are the only good Growth bets. I have property in Brazil that I will be fixing up and slowly selling off and building something new in another beach town. The Pros in BP will give you all the numbers that work, but, organically there are a lot more things to consider. I might think about building a small Hotel in Goa. I speak Portugues and would like to get back to surfing early in the mornings and have a Bang Lassi for breakfast. Everything for me also depends on a high speed internet connection as I trade Futures on my laptop to make money each morning. Peace.
- New Mumbai, Maharashtra · Member since 2016 · 21 posts · 1 vote10y
_/\_
NAMASTE once again sir.:) wonderful to hear that you would like to come back and have a Lassi.
Thank you so much @Michael HaynesWell i am a complete new guy in Real Estate's. so i came up with such queries.
My plans are to look on those properties that gives good rentals. Getting monthly passive incomes is all i am looking for.I am not looking for an investment right now. It's been six months i am only reading about real estate's. Later in future i will surely go for an investment. but not right now.
In the past few months i had searched some properties of New York that gives good rentals. but later i read about Tampa, somewhere in a blog, that its a good place to invest and also Miami.
So, i started searching for properties of Miami later and now Tampa. LOL.
I was impressed by the rentals in USA, but was astonished when i saw the taxes one needs to pay.
so that's why i came up with such queries.you said it right sir, properties there are like stocks.
but here in Mumbai it's different. The rentals depends on the locality, but are low. For ex. if you want a property that generates rental of 1500 or 2000$ rentals monthly, then its better to have atleast a million dollar in your pocket.
But the value of a house would seldomly depreciate. so each and every family earning well, would go and invest into real estate's. because they know, if not now, atleast in future there next generation would get the perks for the investments they did.
Few years ago, My father bought our current house for around 7,000$, but now our house is valued till 90,000$ (IN MUMBAI). And, if we give our house for rent, we can expect only till 180$/month.Anyways sir, i appreciate for the time you took for writing and sharing your knowledge.
Thank you once again. - Investor · Tampa, FL · Member since 2016 · 681 posts · 288 votes10y
@Yeshudas Nair, Hello again, one of the things that people do not understand, who are not in the business is that properties do not always go up in value. I belonged to a Stock Investors Club here in Tampa, Florida for ten years. We had about 500 old guys with money, who were just looking for a "safe place to park their money and make some money." I was a "newbie" who had made some money with Mutual Funds and now I wanted to learn how to short term trade for more returns. Stock Investors are looking to Buy Growth and Hold for as long as possible. Stock Traders are looking to Buy Value and ride the short term Momentum moves to make quicker profits. Right now, the Markets are Volatile, going up and down very quickly on a Daily roller coaster ride. So, it is very hard to Buy and Hold for a long time and have any guarantee of the price of the stock ending up and you Creating Wealth while you sleep. The Central Banks have destroyed the Fixed Income Bond Market, so that retired people who depended on Bonds making them interest to live on is done for maybe the next 20 years. The search for Yield has everyone thinking of buying Real Estate to make money. The Pros can give you the business numbers and percentages may work on paper, but, I am selling because I think that we are at a top and not a bottom in the Real Estate Cycle. The time to buy is going to be after the next downturn in the US economy. The thing to do now is to pay off all Debt, fill your garage with food and water and save your money in Dollars while we wait for the next downturn and the opportunity to pick up properties on sale. I am a gold miner too, but, I would not save my money in gold bars, or like you in India with gold jewellery. Imagine that next year we start the next Economic Downturn and the Sale of the Century is on. Do you think that you are going to be able to buy houses in the US with your gold bars? It is very difficult now in Europe with Negative Interest Rates at the Bank, to pay them to hold your money while you are waiting for the next opportunity. In foreign countries Negative Interest or really low interest rates are used to force the guys who have the money, to put that money to work and not just live off of the high interest rates. The Central Banks and the Governments want to try to Financial Engineer us out of the Recession and they can't. Now, back to the idea that you should be able to make money renting a house. Here in Tampa, rental houses do not make money. The people who can pay rents of $1000 a month or more, try to buy a home. So, you end up with the ones that are just starting out, with no savings or the ones that have to rent for life because they will never save any money. With 10 to 20% down and mortgage rates at 3.5%, what is the sense of renting if you will be staying in the home for five years or more? Take a chance and see if you can't make a Gain in Time and Sell tax-free as your Residence after Homesteading for at least two years. My rentals have always been under $1500 a month houses and mostly duplexes that made me at least $100 a month in positive cash flow. To give you another example I also have rentals in the oil field capital of Brazil where all the JOBs were until this newest and worst Recession started. My one bedroom and efficiency apartments rent for one Minimum Wage. The value of the minimum wage fluctuates with the value of the Real against the Dollar. Two years ago that was $550 US a month. This year that is about $250 a month. I built my properties and I don't owe money on them because it is extremely expensive to borrow money in Brazil. Interest rates on a Credit Card can be 20% a month. If you finance a car, any car, you can pay double the cash price in 2 years. Lots of Brazilians buy a new car and pay the outrageous interest rate until the car is paid off and trade it in for the latest model, considering the monthly cost like an expensive Lease vehicle. So, where I could have been making $6000 a month in rents and living on my farm, now I will be lucky to get back and make a couple thousand a month. The numbers you describe in Mumbai, don't work at all. So, trying to make money with rentals or even save money with Buy and Hold Real Estate in India is not possible. Do you know anyone from India who owns rental properties in the US? You know why? Because the Government used give Immigrants, zero percent loans to buy up all the Convenience Stores and the small Motels here. One 7/11 store on a weekend, can sell $15,000 or more in just wine and beer. Why would they try to struggle to make 1 or 2% a year, with luck, with rental property? That is why the guys in BP are always looking for a Deal and some Wholesaler who does the work to Search and Buy the Deals and resell them to the Flippers. Do you watch the Flip and Flop or Flipping Las Vegas type rehab shows on TV? Do a Google Search and try to find them on youtube.com to see how its done and how much they spend on sight unseen auction properties that turn out to be tremendous nightmares. And don't believe that you too can hire the best builders in town and install first class materials in your auction nightmare and make the kind of money that they say they made. It is hard to get the Big Picture of how things are in different countries for making money and what the tax consequences would be.Don't you have any partners here in the US who may be in the business? My best friend in Brazil told me that "you cannot think of business outside of the US as being the same in a foreign country." A lot of smart, rich, connected people were buying farm land in the US after the 2008 Economic Collapse. Those conditions have changed and if they are carrying a mortgage, they may lose those properties in this next downturn. The Chinese, English and Asian Buyers who are driving the price of luxury apartments sky high in the major cities around the world, are not immune to the Real Estate Cycle. The ones who are buying all the art and jewels and antique cars etc. All those Buy and Hold seekers of Yield are going to suffer the biggest losses in this next downturn. "The bigger they are, the harder they fall."
- New Mumbai, Maharashtra · Member since 2016 · 21 posts · 1 vote10y
Thank you for sharing your experience and knowledge sir. I appreciate that.
- Podcaster & Multi-Family Apartment Investor · Denver, CO · Member since 2016 · 273 posts · 138 votes10y
A. You are asking for average maintenance costs... and that depends on:
1) the age of the house
2) the size of the house
&
3) who is living in the house
B. You are asking for the taxes on the property and that is found easily on the county website.
C. I want you to make your goals so maybe if you are just getting into investing and also just learning the area it would be smart to follow a strategy of wholesaling...
Something I have done and I recommend to others who are just getting started in investing is “Driving for dollars”. Driving for dollars is an inexpensive and effective way to get started wholesaling. I don't know if you are living in Mumbai right now or living in FL but if you are living away... you can still do this strategy because it's not only scalable, but the strategy is capable of working virtually... meaning you can have a group of bird dogs doing all the ground work for you and you just split the profits. so, I know it's long but I hope it helps!
Step One:
Pick a neighborhood. (I recommend a neighborhood that is very close by.)
Step Two:
Drive around and take note of (and photos of) any and all vacant/distressed/abandoned
houses.
Step Three:
Look at the county assessor’s website to find the owner(s), and their mailing address(s) (I need to stress, that you are looking for the home address of the owner). Write them up a personal letter with a pic of the home in its distressed condition. In your letter, let them know you drove past their property, and it looked to be vacant. Let them know if they are willing to sell, you could pay them cash and close quickly.
Step Four:
Contact a local Real Estate Broker and ask them to give you a list of all the houses in that neighborhood that have sold for cash within the last couple of years (these will typically be cash investors).
Step Five:
Go again to the county assessor’s website, this time find the mailing address of the buyers.
Step Penultimate:
Once you get a response from an owner of one of the vacant homes, just negotiate to buy it at a discount for all cash and get it under contract. Then contact all the cash buyers, you found, that you already know buy in that area. If you were able to negotiate a good enough discount, you’ll have no problem getting it off to one of your known buyers.
Step Last:
After you have done all that in your local neighborhood… just move on to the next one.
To your success!
Adam Adams
- New Mumbai, Maharashtra · Member since 2016 · 21 posts · 1 vote10y
Woah,
I am amazed sir for the strategy you shared.
Thank you so much for taking your time and enlightening me.
I was aware about flipping houses, but was not knowing much about wholesaling. And your strategy wowed me.
Thank you so much sir.
Now i feel like my time investment on BP is truly worth.I live in Mumbai, its been a couple of months i am studying about Real estate's in FL & NYC (USA).
Real estate's here in Mumbai never gets doomed. They may get stabled while the time of recessions, but if the markets plunge, the R estate's go north in value soon. If you hold properties for max time, you can get good profits.
but i have been reading about RE markets in USA, they are challenging. But i loved it. The ups and downs in those R Estates wowed me.Anyways, thank you once again Adam sir. I appreciate your valuable time.
- Podcaster & Multi-Family Apartment Investor · Denver, CO · Member since 2016 · 273 posts · 138 votes10y
Originally posted by @Yeshudas Nair:
Woah,
I am amazed sir for the strategy you shared.
Thank you so much for taking your time and enlightening me.
I was aware about flipping houses, but was not knowing much about wholesaling. And your strategy wowed me.
Thank you so much sir.
Now i feel like my time investment on BP is truly worth.I live in Mumbai, its been a couple of months i am studying about Real estate's in FL & NYC (USA).
Real estate's here in Mumbai never gets doomed. They may get stabled while the time of recessions, but if the markets plunge, the R estate's go north in value soon. If you hold properties for max time, you can get good profits.
but i have been reading about RE markets in USA, they are challenging. But i loved it. The ups and downs in those R Estates wowed me.Anyways, thank you once again Adam sir. I appreciate your valuable time.
That's really nice of you to say. I just want you to be successful, and if any of that is able to help, I will be very happy.
Feel free to reach out to me directly or to the BP community if you get stuck on anything.
Good luck,
Adam Adams
- New Mumbai, Maharashtra · Member since 2016 · 21 posts · 1 vote10y
@Adam Adams
Feeling blessed.
Would like to get in touch with you.
Sir, I am new here on BP, so i don know how to connect you.? - New Mumbai, Maharashtra · Member since 2016 · 21 posts · 1 vote10y
Feeling blessed.
Would like to get in touch with you.
Sir, I am new here on BP, so i don know how to connect you.? - Podcaster & Multi-Family Apartment Investor · Denver, CO · Member since 2016 · 273 posts · 138 votes10y
Originally posted by @Yeshudas Nair:
Feeling blessed.
Would like to get in touch with you.
Sir, I am new here on BP, so i don know how to connect you.?well sir, it's not letting me connect with you for some reason.
All I can say is that my number is below, and you can also contact me through the website below too.
- New Mumbai, Maharashtra · Member since 2016 · 21 posts · 1 vote10y
Ok thank you sir
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