Pensacola Realty Masters Blog
Realty Masters is happy to present the following Pensacola area community and Pensacola real estate information!
Evictions are a hot topic right now. As many tenants have been delinquent through the COVID-19 pandemic, and the legislation preventing evictions is expiring, many landlords are calling us about evictions.
As your property manager, we handle several aspects of your property management as allowed under our management agreement and Florida law. These roles have us property managers wearing several hats- Realtor, leasing agent, private investigator, maintenance coordinator, bill collector, bookkeeper, interior designer, and the list goes on. One of the roles we cannot assume, is that of a lawyer.
The Florida Supreme Court does allow for Florida property managers to handle evictions for property owners but only in a limited scope and only in certain instances. They give us the authority to:
- With the help of our attorney, draft and serve a 3-Day Notice
- With the help of our local county court, draft and file a Complaint for Eviction and Motion for Default
- With the help of our local Sherriff’s Office, obtain a Final Judgment and Writ of Possession
- Prepare eviction forms approved by the Florida Supreme Court
Your Florida Property Manager may be able to file and proceed with an eviction if:
- The eviction is for non-payment of rent
- The eviction is uncontested by the tenant
- We have written authorization from the property owner to evict the tenant
Unfortunately, if your tenant fails to move at the end of the lease, an eviction is necessary, but your Florida property manager may not be authorized to file this on your behalf. Additionally, if your tenant violates a lease term and is served a 7-day notice of non-compliance, we can serve the notice, gather the documentation, but cannot file the eviction on your behalf. Additionally, if we know your tenant will contest the eviction and that they have any ground to stand on, we will not be able to file any eviction on behalf of the property owner.
Why? Well, because the Florida Supreme Court does not want Realtors practicing law. Unfortunately, at a certain point, the eviction process can turn into such. This can be frustrating for property owners as the eviction process can be a little intimidating to navigate. The good news is that many owners, with a little guidance, are able to file and carry through the eviction with no problem. It may require an in-person or a conference call hearing. In many instances, hiring an attorney to handle the process is the best choice for many.
It seems like every month we are discussing what normal wear and tear is and what is considered tenant caused damage. We strive to be fair with both our owners and tenants so we are always doing our research to make sure our standards are on track with others. Most recently we have compared our guidelines to the U.S. Department of Housing and Urban Development. The U.S. Department of Housing and Urban Development says that “the costs an owner incurs for the basic cleaning and repairing of such items necessary to make a unit ready for occupancy by the next tenant are part of the costs of doing business.”
Some items HUD identifies normal wear and tear are
- Fading, peeling, cracked paint
- Small chips in the plaster
- Nail holes, pinholes, cracks in walls
- Door sticking from humidity
- Carpet faded or worn from walking
- Partially clogged sinks caused by aging pipes
- Dirty or faded lamp or window shades
Tenant caused damages usually cost more to fix and go beyond normal wear and tear items likely a result of a tenants' negligence or abuse.
Some examples from HUD are:
- Gaping holes in walls or plaster
- Chipped or gouged wood floors
- Doors ripped of hinges
- Holes, stains or burns in the carpet
- Clogged or damaged toilet from improper use
- Torn, stained, or missing lamp and window shades
See the attached HUD document and review Appendix 5C and 5D for more information on normal wear and tear as well as a sample life expectancy chart.
With any measurement based on a future predictions or hypotheticals, we know that many parameters, and events can change the results,but that shouldn't stop us from doing our due diligence on the front end of investment properties.
Let's take a look at the kinds of properties I focus on, which are single family homes that are easy to finance with 20% down for investors.
Below is an example of a home purchased for $100,000 with a $20,000 down payment and an $80,000 mortgage at 5% interest. I used a 2% property appreciation rate and 2% annual increase for rents and expenses, and a 10 year holding period.
Annual Rental Income: $1000 per month rents less 2% vacancy = $980 * 12 = $11,760 per year.
Basic view: Invested $20,000 (down payment) for 10 years and then cashed out.
See the chart that shows the growth. (Chart is courtesy of Chris Bird with CRS and came from his investment analysis course which I attended).
Feel free to utilize this formula and information when analyzing your own real estate investments. Reach out if you have any questions about analyzing real estate investments in the Pensacola area.
We've all noticed the increase in rental rates in the Downtown Pensacola area over the past few years. We decided to dig into the data to see exactly how much rents have increased. Overall, single family rents in downtown Pensacola (zip codes 32501 and 32502) have increased approximately 25% over the past 5 years. In comparison, the average Pensacola area rental rates has increased approximately 13% over the last 5 years. That means that Downtown Pensacola rents are increasing nearly 2 times the amount as the overall area rental rate.
The average asking price today on Pensacola MLS for a single family rental in Downtown Pensacola is $1,422! A lot of these properties are new construction homes which of course come with a higher price tag. The rising rates in the Downtown Pensacola area are marking it harder to find an affordable downtown rental.
What do you think are other factors contributing to this steep increase? Here are a few of our observations:
- Ongoing Downtown Pensacola revitalization
- Increase in new construction
- Renovations on existing properties
- Increasing rental rates overall
We will continue to monitor the Pensacola rental market and keep you posted as to any changes in rental values.
originally posted 02-02-2019
The Pensacola Real Estate Market is strong!
We are taking a look back at 2016 Real Estate Statistics. The Florida Real Estate market, which was known to be hard hit by the recession, is showing continual signs of improvement. This is great news for homeowners and landlords but not necessarily great news for tenants.
Let David Keen, Realtor, give you a rundown of some of the highlights of the 2016 Pensacola Real Estate Market.
Here's a summary of what David Keen, Realtor, has to say.
Pensacola Real Estate Market
- Home Sale Prices in the Pensacola Area were up about 5% over 2015 Home Sale Prices
- Inventory is down and supply is limited
- New Construction makes up a large percentage of inventory
- Foreclosures and Short Sales are now only about 3% of active sales inventory
- Average time on the market for properties for sale in Pensacola is sitting at approximately 90 days
With days on the market down along with inventory and supply, sales prices are likely to continue to increase in the Pensacola area. As David mentioned, the distressed inventory made up nearly 29% of our active inventory just two January's ago and now the distressed inventory is down to about 3% of active inventory. Because so many of the sales comparables were distressed properties, it kept the market and appraisal values down. In comparison, today in 2017, nearly 1/3 of the active inventory are new construction, or brand new, homes.
As we are expecting an increase in interest rates in the coming months, many buyers are using this opportunity to purchase a larger home and sell their old home or deciding to make the leap from renter to homeowner.
Pensacola Rental Market
- Rental Rates have increased about 3% over 2015 rental rates. While this is not as strong as the improvement for the sales market, we expect tighter inventory to continue to drive rental rates up!
- The average rental rate in Pensacola is up to approximately $1,100
- Rental Supply is limited with nearly 1,000 fewer units on the single-family rental market than five years ago.
What do these statistics mean? The shrinking inventory of Pensacola area rental properties comes from forced landlords who previously could not sell their homes. These hesitant landlords leased their homes, condos, and townhomes out of necessity, not out of desire. Because of the improving real estate sales market, hestitant landlords are choosing to sell their properties rather then releasing when their tenants vacate. This trend began in 2013 but ramped up in 2016.
The increase in rental supply in 2014 comes from a huge increase in investor purchases as prices were down and distressed inventory was high. Now that it's harder to find affordable investments in the Pensacola area, the investor sales have finally leveled off although demand has not. We expect even more landlords to sell their rental properties this year further tightening the rental inventory. Because of these factors, rental prices will continue to increase over the coming years. This lack of inventory and increase in prices is forcing some renters to make the leap to homeownership earlier than they had desired!
Are you interested in building a rental portfolio? We have owners ready to sell their rental properties and know where you can find the best deals on auction sites, with tax deed sales, and with existing foreclosure inventory.
Do you have questions about the Pensacola rental market or the sales market? Reach out to our team for answers!
originally posted 03-02-2017
- Tenant Education
- Pensacola Real Estate
- Owner Education
- Pensacola Community
- Real Estate Market
- Military PCS Move to Pensacola
- New Construction Builders in Pensacola
- Considerations when Purchasing a Pensacola Multifamily investment
- What Makes a Good Pensacola Investment Property
- Buy and Hold Investment Strategy
- Nicole St. Aubin
- Pam Keen
- Nicole St Aubin
- Erica Parker
- Mike Hamby
- David Keen
- Realty Masters
- Mitch Adcox