Key West Investment Options
Key West investment options can be quite lucrative if you know what is available and what best fits your particular once and needs. Generally, some of the best performing investments in the area are of course real estate, both residential and commercial. So, read on to learn more about a few different investment options in and around Key West Florida.
Key West investment options typically bring strong returns, thanks to the geographical location, scenery, weather, and recreation. Located in the southernmost part of the state of Florida, Key West is largely known for being a tropical island paradise, with its warm weather, nightlife, and sunrises and sunsets. These elements are what attract hundreds of thousands of tourists every year, and it's also the reason why Key West has some of the best investment options in the entire state.
For example, take your average three-bedroom, two-bath home in an ordinary suburban neighborhood and put that same house in Key West, and its value will immediately skyrocket. Obviously, this has to do with the three rules of real estate, which are: location, location, and location. People invest in residential real estate here because they can charge premium rates since it's one of the most visited spots in the entire country.
Property owners can not only lease out their houses, they can also enjoy them as dedicated vacation spots when they want to get away. Better still, there are some nice tax benefits to owning residential real estate in Florida. For instance, there is no state income tax, and if you rent it out according to official guidelines, you'll be able to write off many expenses, including repairs, maintenance, replacements, and much more.
Some people choose to go with a single-family property, while others settle on small beach bungalows or other types of residential real estate. Of course, there are also commercial investment options in and around Key West, which also generally perform pretty well. Here again, because it is such a heavily traveled tourist destination, commercial real estate is always in demand, particularly for things that offer recreational activities that are associated with and popular in the area.
If you're thinking about investing in Key West real estate, it's best to first determine exactly what you want to get out of it and how you'll use it. Once you have a better idea of the way you want to go, it's time to start looking at your budget and the properties that are affordable and attractive.
Key West Luxury Real Estate Forecast
The Key West luxury real estate forecast looks good, given the current circumstances. However, it could suffer some amount of trouble, as certain external factors come into the picture and play out across the micro market. So, let's take a more detailed look at the luxury residential real estate forecast of Key West and what we might expect to see unfold.
The Key West luxury real estate forecast is currently quite strong. Right now, there are over 260 homes for sale in the community, ranging from $156,000 up to $9.5 million. Presently, the median listing price in Key West stands at 1.2 million, with a meeting list price per square foot of $926, and a median selling price of $950,000. These figures represent a 34.3% increase in a year-over-year comparison, which is very impressive, to say the least. Also, the sale-to-list price ratio remains very high at 99.02%, meaning listings are selling for less than 1% under their asking price, or almost near parity with their listing price.
Presently, Key West is considered to be in a hot seller's market, greatly favoring homeowners and property investors seeking to upgrade or relocate. Buyers are in somewhat of a predicament at this time, because there are more active people looking to purchase real estate than there is available inventory. However, this dynamic is likely to change over the coming months, to a few factors, including rising inflation, rising interest rates, shortage of labor and building materials, and the possible reintroduction of distressed properties or foreclosures and short sales.
First and foremost, inflationary pressures are already straining personal budgets, which will no doubt cause fewer people to buy. Combined with rising interest rates, which the Federal Reserve has announced it will do incrementally over the next several months, means few mortgage applications and fewer refinances. These two issues alone are enough to help cool the local luxury real estate market in Key West.
Then, there's the matter of the scarcity of new construction, which continues to be a persistent problem, given supply chain interruptions that make building materials scares and the ongoing labor shortage as well. Additionally, most foreclosure and short sale processes were halted during the shutdown and are only now really getting back underway. So, if distressed properties trickle onto the market, that will help increase inventory. But, if too many floods the market too quickly, that may add a high saturation level, pushing the community into a buyer's market.
Key West Cost Of Living
The Key West cost of living isn’t nearly as expensive as one would expect. Sure housing is pricey, but that is expected, given that properties are located in a tropical island paradise, where summers are warm and bombing, spring, and fall months are extraordinarily delightful and winter is exceptionally mild. People are pleasantly surprised to find out that Key West is more affordable than they think. So, let's take a look at the cost of living in Key West.
The Key West cost of living can easily be broken down into six broad categories: transportation, utilities, miscellaneous, food, healthcare, and housing. Using a baseline score of 100 to serve as the national average, we can see just how these categories break down in the cost of living in Key West. Anything below 100 is less expensive in key west, while anything above costs more than the national average. Here's how the cost of living in Key West breaks down across those six aforementioned categories:
- Transportation. The cost of getting around Key West comes in at a score of 69 out of 100, meaning that it's less expensive to get from place to place. This is largely due to the fact that quite a bit of people bike because the weather is so pleasant so many days out of the year. Additionally, in areas like the old town, walking is also an option.
- Utilities. A sizable percentage of residents here only really need to cool their homes for a few months of the year. Otherwise, they generally leave the windows open and enjoy the island breeze, which is why utilities in Key West come in at a score of 98, making that particular cost less expensive than on the mainland.
- Miscellaneous. Everyone has to pay for odds and ends, and in key west, miscellaneous costs are only slightly above the national average, with a score of 107.
- Food or Groceries. Key West scores 114, making it only a tad bit more costly to buy food here. In fact, this is actually comparable to many parts of the country, particularly the Northeast and on the west coast of the country.
- Healthcare. The cost of healthcare in Key West earns a score of 145, making it just a bit more pricey than it is on the mainland peninsula, which is only a couple of hours away.
Last but not least, housing scores 274, with the median home cost being $752,400, compared to the national average of $292,000.
Keys Waterfront Properties Offer Real Investment Advantages
“There are a lot of high-end areas across the United States where you could invest in property; however, there are very few that are as inviting and gorgeous as the Florida Keys, plus offers genuine Investment Advantages
Here are some of the many advantages and benefits of purchasing waterfront homes located in the Florida Keys:
1. People will always want this property! Generally speaking, when you invest in a rental property, you should expect not to get any rental income for the first 3 to 6 months. When you invest in a rental property in the Florida Keys, you can forgo that expectation. You will have no problem renting your property.
2. Reliable supplemental income. Not only can you count on being able to rent your property out right away, but you can also count on keeping it rented out. People want to visit the Florida Keys at all times of the year. This means a nice steady income for you.
3. Exceptional appreciation. When compared with landlocked real property, waterfront property appreciates more as time passes. You can expect your Florida Keys property to bring you a nice profit if and when you decide to sell it.
4. Advantageous for tax purposes. When you invest in residential property can take advantage of a number of specific tax write-offs. If you decide you want to sell this property and invest in another one, you will enjoy other tax advantages.
5. Borrowing leverage. When you own a property on the waterfront in the Florida Keys, you have good leverage whenever you need to borrow money to buy another investment. Owning a solid and valuable piece of property will help you continue to build your real estate portfolio and prosper.
Investment Opportunities and Tax Advantages in Owning a Vacation Home Rental in the Keys
The Keys are a great place to work and play. But this chain of islands off the coast of Florida situated between the Atlantic Ocean and the Gulf of Mexico also has hidden potential. And that comes in the form of investment opportunities. When people think of the Florida Keys, they think of sunshine, beaches, sparkling water, and balmy breezes drifting about day and night. They think about watching sunsets and sunrises, strolls along the coastline, a tropical lifestyle, casual dining, and mouthwatering seafood. But there's a lot more to the Keys.
Investment Opportunities in the Florida Keys
Because the Florida Keys are an international tourism destination, there are certainly a lot of recreational opportunities. And that makes for an environment that is ripe for real estate investment. The abundance of tourism means people need a place to stay during their visit and those who are looking for a great opportunity ought to take notice. Now, it's a matter of sorting through all the available real estate properties on the market. In general, it's best to look for properties that are near the water and in close proximity to living amenities such as dining, entertainment, and shopping. Although these properties will be more expensive, they will command higher rents and be in higher demand for travelers. Tax Advantages of Owning a Vacation Rental Home
Getting down to the financial benefits of owning a vacation rental home, there's more than just taking in rent payments. There's the benefit of certain deductions and if you make use of the property in the right way, it can be a great source of income. Here are a few things you should know: Rent seldom and reap the benefits. Rent your vacation home in the Florida Keys for less than 15 days in a year, and all that rental income is tax-free, according to the California Society of CPAs.
Rent more, deduct more. If less than ten percent or two weeks of the year isn't realistic for your situation, then take the deductions. Your tax bill can be lowered by claiming certain deductions. Costs for storage, maintenance, and other things like travel and insurance can be written off in part or as a whole.
Mix up the use. Stay in your vacation rental home in the Keys for ten percent of the time and claim it as a second home but not as an actual business property. That has benefits as well.
For more information about buying a vacation rental home in the Keys, contact us. We can educate you on the process and benefits of purchasing a vacation rental home.
What to Expect with a Home Inspection
If you're a home buyer, you're likely wondering what to expect during a home inspection. Or, if you're selling your home, you may be curious about the process and what will be looked at. In this article, we'll give you a detailed look at what happens during an inspection and what kind of report you can expect to receive after the fact. Keep reading to learn more.
What should buyers and sellers expect from a home inspection? Well, it typically includes a detailed inspection report, after the inspector is done testing and evaluating the electrical system, plumbing, major appliances, the roof and foundation, HVAC system, and more.
Before getting into what’s inspected, it’s important to understand what the inspector is looking for. This is known as “material defects.” Material defects are any current or possible issues with the structural components of a house that negatively affect the value, make it unsafe, or are in need of repair. The inspector will also provide an opinion as to any possible problems that may arise in the near future or over the long term of the house.
As part of the home-buying process, a home inspection is an important step to take before finalizing the purchase. This way, you can be sure that the property is in good condition and identify any potential problems that may need to be addressed.
During a typical home inspection, the inspector will evaluate the electrical system, plumbing, major appliances, roof and foundation, HVAC system, and more. After testing and evaluating all of these aspects of the home, the inspector will provide a detailed report to all parties involved, including the buyer, seller, agents, and anyone who requests a copy, that includes their findings.
This report will help you to understand the condition of the property and any potential issues that may need to be addressed. It's important to review the report carefully and ask the inspector any questions that you may have. If there are any major problems with the home, you may be able to negotiate with the seller to have them addressed before finalizing the purchase.
Overall, a home inspection is a valuable tool for both buyers and sellers. It provides peace of mind and can help to avoid any surprises down the road. If you're buying or selling a home, be sure to schedule an inspection as part of the process.
Advantages Of Working With A Seasoned Buyers Agent
Working with a seasoned home buyer’s agent offers many advantages over working with a real estate agent who only sells homes. A home buyers agent is dedicated to finding the best property for you, within your budget and timeline. They have knowledge of the market and access to important resources that can help you get the best deal on your new home. Plus, they will walk you through each step of the home buying process so that there are no surprises. If you are thinking of buying a home in the near future, be sure to work with a qualified home buyer's agent.
Are you thinking of buying a home? If so, it's important to work with a qualified buyer's agent. Seasoned agents have the experience and know-how to help you find the right property and negotiate the best deal. Here are some advantages of working with a seasoned home buyers agent:
- A seasoned home buyer’s agent will have a vast network of resources at their disposal.
- A seasoned home buyer’s agent will be familiar with the local market and can help you find the right neighborhood for your needs.
- A seasoned home buyer’s agent can guide you through the offer process and help ensure you get the best possible price for your home.
- A seasoned home buyer’s agent can provide valuable insights into what to look for when inspecting a property.
What’s more, a seasoned home buyer’s agent will likely have their own or know-of-pocket listings (homes that are going up for sale but not yet publicly listed).
How To Calculate The Florida Keys' Cost Of Living
If you've ever visited southern Florida, and driven past Miami, and Homestead, you have undoubtedly seen signs pointing to the Florida Keys, which is one of the world's most beautiful areas to live in. It is officially referred to as a “coral cay archipelago”, and they are the most highly populated islands in the Florida Straits. A series of bridges connect the islands, with the most well-known being the 7 Mile Bridge. Approximately 82,847, people live here as of 2020. If you are interested in living in this part of the U.S., the cost of living is the first thing you'll want to consider. Here are a few tips to help you determine how much living in the Florida Keys might cost you. It is such a beautiful place for anybody who loves islands, the ocean, and beautiful year-round weather.
Tips For Calculating Cost Of Living
It might seem to be a very complicated thing to calculate. However, it really is very simple to figure out. The cost of living is precisely what it appears to be. It's the amount of money you need to have to live comfortably in a certain area, where you are completely capable of paying all bills that your family is responsible for. It includes the rent or mortgage for where you want to live and all utilities you will need to pay for including electricity and gas. Obviously, you will need to buy gas for driving your car, pay for groceries, and various types of insurance, including car insurance, health insurance, and homeowners insurance if you decide to buy a house in the area. If you compare the amount of money you make at your job each year, the net amount specifically, you can compare the amount you make with the amount it will cost for you to live in a specific area, to determine fairly quickly whether you will be able to afford to live in that area or not. An easy way to do this yourself is to locate a cost of living calculator online. Just choose the net amount you make each year and the location you would like to live in, and you will be provided with an exact figure.
How Much Does Living In The Florida Keys Cost?
You need to have an income of at least $69,702 according to the most recent statistics. The average cost for renting a house is $2,000 + per month and most single-family houses range in price from $545,000 up to several million dollars, which depends on the location. The cost of utilities, insurance, and food is around the same amount as most southern Florida counties. The only variable is the different kinds of insurance policies you will have, including health insurance, auto insurance, and homeowners insurance if you decide to purchase a house.
If you love the ocean and it's important for you to live in a warmer climate, then the Florida Keys certainly are a leading consideration for anybody thinking about moving to a semi-tropical with beautiful weather year-round. You can reach out to Gary McAdams to get more information on the cost of living and real estate available. With the information that we have provided to you here, you now should have a general idea of whether you will be able to afford the Florida Keys' cost of living or not.
Single Family Homes Versus Condo Living - Which Investment Is Better?
Many individuals who are searching for a luxury home have a tendency to not consider a condominium. These days, condos provide more of a glorified apartment feeling than they did in the past. When it comes to hunting for a house, they definitely raise the bar. A condo can achieve everything that a detached house can and offer many more benefits than most people imagine.
Selecting a condo rather than a luxury house that has been designed for one family actually is a very smart decision to make. It really can pay off to explore what the advantages are so that an informed decision can be made when it comes to what will work the best for your chosen lifestyle and personal living arrangements.
It can be stressful to own a luxury house. As the only owner, you are responsible for all of the upkeep yourself, including painting both the outdoors and indoors, snow plowing, landscaping, and various repairs. A condominium is an investment as well. However, many worries about repairs are eliminated since condo fees cover them.
For those wanting to live stress-free lives, that can be a real blessing. If they are involved in things that are more important or are busy, or can't do all of the physical upkeep on a luxury house by themselves, then a condo is an ideal option to choose.
In the past, it used to be that single-family homes were much better investments compared to condominiums. It was a well-accepted fact. However, things have changed within the world of condos, and investors are now realizing that condos can sometimes be even better investments, depending on the location.
Luxury homes can bring in rental income, whether they are condos or single-family homes. If you buy a condominium in a vacation destination, you can rent it out whenever you aren't staying there. It has been proven that this practice covers the entire purchase of the condominium if it is in the right location.
Utility bills are also less. Instead of cooling or heating a whole house, you just have to air-condition a small area. Some condos are three or four bedrooms and maybe 2000 square feet or larger. However, having a neighbor share one or two walls still can help to cut down on the utility costs of a luxury home. In addition, at times there won't be any garbage pickup since typically condos use dumpsters for collecting trash and the disposal is paid for.
However, each condo is different. Therefore, you should ask which expenses the condo fees include
One thing that condos have that don't always come with single-family homes are amenities such as sports fields, playgrounds, clubhouses, gyms, and pools. Although some neighborhoods do have them, with condos it is nearly always a given.
They are also mainly found in locations that are desirable. Owners of condos will most likely be within walking distance of entertainment venues, restaurants, shopping, and more. Chances are good that you won't ever get bored living in a condominium.
If a condo isn't located in a popular area, they are frequently found in neighborhoods containing single-family houses. It is nice since the buyer will get to enjoy the best of both worlds and have a safe, neighborhood feeling without the responsibilities of landscaping.
There are several things that need to be considered when deciding between a luxury condo and a luxury home. In the end, it is a matter of personal preference. One thing is for sure, you have a greater chance of finding a new condominium within your price range compared to finding a single-family house that comes with all of the upgrades and finishes you want for the exact same price. Your best option is to do some comparison shopping. You need to remember that single-family homes involve a lot of maintenance!