REAL Exclusive Magazine

International Landlords – A Rising Trend

By Patricia Tan

Florida’s still low real estate prices, together with a healthy demand for rental properties have led many investors from overseas to purchase rental properties here. Sometimes the homes are purely for investment, other times they are vacation homes that are rented while the owners are not using them personally.

It can be difficult to find a property that meets both the need of a vacation home and a rental investment. The home that meets the owner’s need for a vacation residence may not produce the best rental returns, but a lower return is often acceptable under these circumstances.

Here are some of the things buyers consider before deciding upon the kind of rental that will work best for them.

• Initial cost and capital outlay. A property that is rented for vacations must be fully furnished to a high standard, and this can add a substantial amount to the cost of the property itself.

• Ongoing costs. The costs associated with running a short term rental can be considerable. The landlord is responsible for all utility bills, whereas the tenant in a long term rental would normally be responsible for these.

• Property management. Successful management of a vacation rental property requires a lot of time and effort, and this is reflected in higher management fees.

• Property zoning and community rules. While most local authorities and home owners associations allow long term leases, many of them do not allow short term rentals

• Vacancy rate. This indicates how much of the time the home may be unoccupied. For a long term rental, this will normally be the time between annual leases, and in our current market conditions you can expect this to be about 30 days. For short term rentals, the vacancy rate will depend upon a number of factors such as supply and demand, and economic conditions that impact tourist traffic.

• Cost of advertising and finding tenants. For a long term rental, these costs are limited to the time between leases only. To secure vacation rentals, these costs are ongoing and can be significant.

Some readers may have seen a recent article published in The Sarasota Herald Tribune that featured one of our British clients, Steve Kingshott, who is an international landlord. I first met Mr. Kingshott when he visited our booth at a U.K. property show a few years ago. He wanted to purchase a vacation home in Florida, and I convinced him to look at Sarasota in addition to other Florida cities he had in mind. He quickly decided that Sarasota offered him the most desirable life style and purchased a downtown condominium. Once he had spent some time here, he spotted an opportunity to invest in other real estate and become a landlord. Quickly establishing that long term rentals offered a more attractive return, Mr. Kingshott purchased two other condominiums both of which are rented to tenants on a long term basis.

Over the years, we have sold many properties to overseas buyers, but we are seeing an increasing number of sales to overseas landlords who see Florida real estate as offering a decent return on their investment, together with attractive potential capital appreciation.
Patricia Tan was born in England, and her career in international sales and marketing led her to live and work in many countries around the world before moving to Sarasota in 1997. Patricia is a Certified International Property Specialist (CIPS), Graduate Realtor Institute (GRI), and Transnational Referral Certified (TRC). She is involved in global activities of the Sarasota, Florida and National Association of Realtors, and currently serves as NAR President’s Liaison to U.K. Her real estate business operates from Coldwell Banker on St Armands Key, where her focus is to bring international buyers to the local market. She regularly makes marketing trips to Canada, Asia and Europe, to promote Florida’s Gulf Coast and the Sarasota area in particular. Patricia may be reached at 941-504-9232 or Pat@PatriciaTan.com.

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