Key Largo...Tavernier...Islamorada...Upper Keys Real Estate
Buying
a Home in the Keys and using it as a Rental
Renting
your home out as a seasonal(vacation rental)or long term.
Long term renters are easy to find as there is a shortage of homes for rent.
So, if you want to buy something for retirement or a vacation home and rent it
out to help your payments-this is typically the easiest way. (Long term rentals
are considered to be anything over 6 months, as the tenants don't pay the 11.5%
Florida tax)
• Generally long term rentals should be unfurnished.
• Initially we do a credit check before submitting a lease to you, then
with your approval of the lease, we collect the first and last months
rent plus a security deposit which is typically a months rental amount. We
are very proactive in this area and I assure you the home is handled professionally.
• As to utilities- The tenants take the lease to the water, electric,
phone and cable people and have the utilities put in their name and of course
they pay their own deposits. Garbage down here is included in your tax bill-so
there is no garbage bill.
• Seasonal rentals. Currently we can only rent monthly or 28 days, meaning
the owner can only rent the home out 12 times per year. This means about
5 months of income-Jan-Feb-Mar and July-August. There are some April and June
monthlies.
• As to finding people to rent for the rest of the time! I deal a lot with
navy transfers÷they generally need something for 2-3 months while
they sell their home and buy another. So if it is the off season, I try
to fill your home up this way. Another way to fill in the gaps is to
Companies that come down here. Most of the major government and private
building projects are done by outside firms. Their management people
will generally want a nicer situation so they will generally rent homes
at better than average rates.
• As to what is the best rental situation , that is size, which areas,
views, pools, how water and boating accessibility affects rental amounts
and the typical rental amounts for both long and short term, plus the fees
involved, please contact me. As to extra
costs and what is necessary to have a Home as a Rental.
• When you rent your home out you need to license it through the County.
This costs $25.00 and we handle the paperwork for you. The County and
the Tax people want the home licensed so they know where there may be tax dollars
coming in. When your home is used as a rental, in effect you are operating
the same as a hotel or motel and so come under their safety guidelines.
• Every bedroom and the main living area must have a hardwired smoke
detector and there must also be an escape light. This light comes on
in case of a power outage-this also must be hardwired. (About $350.00 installed
smoke detectors and escape light for a 2/2)
• There also needs to be a professional quality refillable fire extinguisher
that is approved by the fire department (about $55.00). This would
be the same as you'd find in a restaurant or hotel room. There needs to be
a dead bolt on the door that works from the inside and is a different key than
the main door. All of these issues help protect your liability in cases of
fire/break in.
• When the home complies with all of the above and we have the signed
contract, then it can go into the rental pool .SPECIFICS OF
THE AGREEMENT
1 We agree to manage the home for a period of one year with
the contract automatically renewing unless either side gives 90 day notice.
2 Our fee for vacation rentals is 20%---what is really important here are
the following points.
• There are no hidden fees-such as credit card charges etc.
• We typically send you the money within 2 weeks of receiving it÷we
do NOT hold it until the first of each month or split it out each month.
We always collect cashiers checks from the renters so when the money is received,
it is quickly processed through our main office and sent to you.
• There are no charges for going up on our Web sites÷5 in all.
• There are no charges for the pictures that are taken.
• There are no charges for any specific flyers, brochures or ads that
we run on our rental properties.
• We actively and aggressively manage your home. Meaning we get the best
customers (qualified) We play by the 2 people per bedroom limit, and
we work to keep it filled other than your personal usage
•
• We have Handymen, Electrical, Plumbing, Landscaping, Pest control and
appliance people that respond when there is an emergency. BOOKING THE
HOME FOR THE OWNER.
This is very simple. You would call the rental manager and have him block
out the home when you want to use it. We don't charge a fee for any of that.
Generally you would have us arrange for the home to be cleaned after you
leave .FLORIDA BED
TAX Florida charges a 11.5% tax on all hotel, motel, home rentals. We collect
the money from the tenant and disperse it to the tax agency .CLEANING SERVICE
The tenants pay this fee which varies based on the size of the home. On
average a 2/2 is $100 and a 3/2 is $125.00.PETS AND SMOKING
If the home is no smoking, that is put in the rental file and the tenants
are informed before they book the home. If the home allows pets, we collect
a pet deposit which is added to the standard security deposit of $500How
are emergency repairs handled?
• We have handymen available that can take care of small emergencies
or updates, as the owner requires. Since our company manages over 300
rentals, we also have a good working relationship with Plumbing, Electrical,
Appliance and Carpet, Tile people.What about Hurricane
preparation?
• In the event of an impending Hurricane, the handyman or someone else
can be hired to put up the storm shutters, bring in the lawn and patio
furniture, etc for a fee-as we have too many homes for us to do them individually.
This agreement should be set up in advance by the homeowner and the handyman.
We will help you find someone to do this.What makes a
good Vacation Rental
• A clean, well-maintained home on a canal or open water.
• Typically one of the bedrooms should have a set of twin beds if the
renters are bringing children.
• Good linens and towels and a backup set. This is especially important
for monthly renters.
• The washer, dryer and refrigerator should be newer if possible.
• A good Television hooked up to cable (about $35.00 per month) and a
CD or tape stereo system.
• The kitchen must be completely outfitted. A microwave is also very
important for renters.
• Patio and/or Lawn-Deck furniture. If there is an upper deck, a table
and chairs plus loungers.
• On the water side, below a set of loungers and chairs.We get a lot
of repeat renters÷if the renters have a good experience, they
will come back. We see this especially with people that book two to
three months a year.The Rental laws-what
is going on in the Keys
• The Monroe County commissioners voted 4 to 1 about 4 months ago to
overturn and rewrite the existing ban and allow weekly rentals. Recently
a meeting was held where a proposed revision was discussed. It was deemed not
acceptable and is being looked at again and will redone possibly by
Mid April. There is also a chance it may come back allowing 14 day rentals
which would meet everyone halfway.
• In the meantime the Keys are Incorporating and getting away from County
Rule. This happened recently in Marathon and is on the ballot for November
for most of the lower Keys Islands. What this means is that the Incorporated
areas make their own rules as to rentals.Where do we
get the renters
• If you're reading this on my web site you have the answer.
• The balance come through National Advertising placed in magazines such
as Island Living, Florida Sportsmen, Salt Water fishing and Dive magazines
as well as regional publications and our own buyers guide.
• Also all of our computers are networked meaning if someone is looking
for a specific situation such as open water it will show up on the
computer immediately as to area, availability and price plus all other details.Who
handles the renters?
• All of our offices have a dedicated rental manager whose job is to
rent the homes. In conclusion, there is a lot to discuss on rentals
and this is used to just get you information regarding the main issues
.BUYING RENTAL UNITS-DUPLEX-OR MORE UNITS
• There are Duplexes throughout the lower Keys and a few 3-4 unit complexes.
The 3 to 4 units are generally in Key West or Marathon.In looking at
the return, generally it runs around 10% in the Keys÷this includes
the large guesthouses. When a return of 14% or more comes up they generally
go very quickly.
DUPLEX On the water
generally start at $600,000. Nicer ones (maintained-updated appliances-tile)
go for $775,000 and up. A dry lot duplex can start at about $550,000. These
generally have the best return percentage.3 TO 4 UNITS Generally in
Key West or Marathon.
• In Key West, these can be good, especially if it's located in Old Town
and one or more of the units has a transient license, meaning it can
legally rent weekly.
• These type of situations run from about $850,000 and up. In Marathon
from about $750,000 and up .MOTELS-MULTIPLE
UNITS
• These are generally found in upper keys, Marathon and of course Key
West. The more affordable ones ( one to two Million dollars) are generally
from Marathon north to Key Largo. See Commercial section of my site.
If there is a specific situation you want please let me know.
