Sarasota Real Estate News

Good morning!

Today I want to talk about buying beach properties and Seller's Disclosures.

Real Estate Investors use "Cap Rate" analysis which is a percentage of the rental income divided by the purchase price.  Use that percentage to compare properties and optimize your investment.  

Please visit me at my Open House today on Siesta Key at the gulf-side Excelsior Beach to Bay, 6266 Midnight Pass Road #404, Sarasota, from 1-4 p.m..  This 2 BR  2BA condo is 1263 sq ft and listed at $799,000.  Concrete construction, Excelsior is one of the newer communities on Siesta Beach, built in 1980.  It is pet friendly, and has a two-week minimum rental policy.  This condo was purchased in 2002 for $480,000.  Excelsior Beach to Bay has private beach access, washers and dryers, fishing pier, fitness center, and the fees are just over $600 per month, which is normal for Siesta, and includes grounds maintenance, insurance for the building (even flood), and amenities.  Unit 404 is top floor, which has the best views.

Where to look for Siesta rentals properties:  

Crescent Arms 
Crescent Royale
Crystal Sands
El  Presidente
Excelsior Beach to Bay
Harbor Towers
House of the Sun
Jamaica Royale
Our House at the Beach
Palm Bay Club
Sarasota Surf and Racquet
Seashell
Siesta Dunes
Sunset Royale
Tivoli by the Sea

According to MLS, here's the actual annual rental income on some of these properties*:

Aloha Kai $68,000
El Presidente $50,000
Sea Shell $42,000
Horizons West $40,000
Crescent Royale $25,000-$50,000* 
Siesta Beach House $35,000

* Most management companies are happy to provide rental history to Realtors upon request; however, it gets a little "dicey" if owners self-rent and the management company may not be involved - but ALWAYS get as much history as the Seller/Listing Agent will provide.  You may need to put a provision in the contract for the Seller to provide the actual rental history to match MLS for the past three years.

To Disclose or not to Disclose?

In the August 2016 Sarasota/Manatee Realtor magazine, there is an article on disclosure.  Sellers are not required to fill out a Sellers Disclosure Form, however, they (and the Realtors) are required to disclose anything that will affect the value of the property.  If a defect has been fixed, Seller is not required to disclose - even Chinese drywall does not need to be disclosed if the problem has been remedied.  However, the better answer is to disclose what was done and provide the contractor's receipts to the Buyer.  The As-Is Contract is not a waiver for the disclosure requirement.  The purpose of the As-Is Contract is to reflect an agreement between the Buyer and Seller that the Seller is not obligated to repair any unknown defects or property condition discovered during the Buyer's inspection.  Any preexisting conditions the Seller knew about is still subject to the mandatory disclosure.

If Realtors know about issues related to the property and they don't disclose to the Buyer, they can be sued.   So for Sellers and Realtors, the three most important words in real estate are "disclose, disclose, disclose."

I have friends who rent a home from a local investor and he did not spend the money for the necessary inspections before he bought one home.  He charges $1,200-$1,300 monthly rent for properties that are about 40 years old, and the one I know about has plumbing and roof issues that he refuses to fix.   Tenants are subjected to sewer lines that are broken beneath the house that back up often, pin hole leaks, roof leaks, and even mold.  His attitude is, "Move if you don't like it."   Sarasota County says they are not interested in the things they can't see, so my friends are stuck with sinks and tubs that don't drain and sewage that backs up about once a month into the laundry room and bath tubs.  The investor/landlord has owned this home about a year and it's an example of the Seller who did not disclose the defects, but the investor should have spent the extra money on inspections and follow-on inspections until he was sure that this was a good investment during his 15 day due diligence.

Have a great day and stop by and see me at Excelsior Beach to Bay, 6266 Midnight Pass Road #404 today.  Go to my home page at   www.PalmerRanchLindaHolley.com and enter this number in the property search bar A4159484  to see the photos.

Always here to help you with your real estate needs.

Most sincerely yours,

Linda
941-914-4914