Should You Buy an Investment Property in Old Naples?

Investing in another property is a big step that’s worth examining closely. If you’re looking to expand your portfolio to include a piece of Naples real estate, you’ll want to make sure you’re considering the investment from every angle. Are you financially ready to take on another property? What kind of houses for sale in Naples are you most interested in? Is Old Naples the right neighborhood to invest in? So many questions can come up when you start thinking about purchasing an investment property, which makes it all the more worthwhile to work with a team of professional real estate agents and financial advisors who can make the process much easier to navigate. If you are eager to take this next step, start thinking through these four key aspects to help determine whether you should invest in Old Naples real estate.

The first step to knowing whether or not you should invest in Naples real estate is to look at your finances and make sure you’re capable of taking on another property. You may already have a number of investment properties under your name, or this may be your first. Regardless of your situation, re-evaluating your finances is always a wise measure before diving into another investment. Speak with your financial advisor to see whether you’re ready to start looking at houses for sale in Naples. In addition to making sure you’re prepared for the financial commitment of buying another property, you can expect that lenders will require you to put down around 15% for a down payment. If you’re planning to use the property as a rental, many states will also need it to pass certain inspections before you can offer it to tenants.

Once you’re secure in your ability to take on another property, make a plan for where and when you’ll invest. That’s where a professional real estate agent can help. Doing most of the research for you, the right agent will make sure you’re viewing properties that will help you meet your longer-term investment goals.

Is it better to buy when the market is favoring sellers? Or is it wiser to wait until the market is more neutral? The real estate market has been a seller’s market, meaning that prices are appreciating due to high demand and low inventory. Sometimes, investors think it’s better to wait until the economy is in less of an upswing to make their move in the real estate market. However, it can be to your advantage to invest in properties even when it seems like the worst time. When times are tougher, economically speaking, lenders may be more inclined to up their requirements for new investors. Also, if you don’t already own a rental property and have a history of timely payments, lenders may be less willing to provide you with a loan. The key is making sure you invest in properties that you can make payments on and that are most likely to appreciate over time.

If you’re hoping to invest in Naples real estate, it’s good to use your new property for cash flow. Cash flow is a form of passive income that occurs when the money you earn through rent is greater than the monthly cost of owning your property. When your property has strong cash flow, even if home values dip during periods of economic downturn, it will still have the capacity to bring you returns. People often sell their homes in favor of renting when things get tough, which means that rent prices can stay fairly stable depending on where your property is located. You want to invest in an area where homes are likely to remain in demand even if the economy turns for the worse or the real estate market drops. Otherwise, if you invest during a real estate boom, you may end up with a property that doesn’t bring in enough cash flow when the market changes.

A key way to figure out the potential cash flow for your property is to start by determining the realistic rent you can earn each year from that property. Gain insight into current rent prices for similar properties in the same neighborhood. From there, you’ll need to evaluate all the likely costs of owning that property, from mortgage payments, property taxes, insurance, repairs, and homeowners association fees. Subtract any expenses from your potential earnings to get a sense of how much cash flow the property will provide.

When you start searching for houses for sale in Naples, finding the right neighborhood is key. The Emerging Housing Markets Index recently placed Naples at the top of their list of emerging real estate markets, as interest in vacation and rental property investments is rising. Old Naples, in particular, is a strong market with high demand, showing a median home listing price of around $1.1 million. Prices are steadily increasing, and homes are selling much faster. In previous years, properties sold in an average of 56 days. Now, that number has shrunk dramatically to 13. Old Naples combines historic charm with beachside access and plenty of recreation opportunities. Due to this, rental prices continue to increase as renters want to take advantage of the area’s beautiful weather and active lifestyle. Old Naples is an affluent area with a stable local economy, making it a great option for those looking to invest in additional properties.

If you decide to move forward with purchasing an investment property, it’s important to make sure you’re working with a real estate agent who knows the Old Naples market inside and out. Born and raised in Naples, agent Vincent Branda brings determination, dedication, and in-depth knowledge of the local market to each of his clients. If you want the entire investment process to go smoothly from day one, get in touch with Vincent today.