Help for real estate investors

Rentals: what to check before you buy

• Leasing rules. Many HOAs and condo associations limit rentals, set minimum lease terms or require tenant approval. Some restrict short term rentals entirely. Read the governing documents during your inspection period, not after closing.
• Taxes reset after you buy. A rental isn't eligible for homestead, so plan from the purchase price. Florida caps yearly increases in assessed value for non homestead property at 10 percent for non school taxes, but the first year after a sale resets to market value.
• Insurance. Landlord policies, roof age and flood zone can move your cash flow more than rent does. Get quotes early.
• Florida landlord tenant law. Chapter 83 of the Florida Statutes covers leases, deposits and notices. For example, a landlord who doesn't make a claim on the security deposit has 15 days after the tenant moves out to return it, and 30 days to send written notice of any claim.
• Short term rentals. Rules vary by city, county and HOA. Jacksonville Beach, St. Augustine and others have their own registration and zoning rules, so confirm before you buy with that plan in mind.

Flips: where deals go wrong

1. Overestimating the after repair value. I'll pull sales of homes that were actually renovated to the level you're planning, in the same micro area.
2. Underestimating repairs. Get contractor bids during the inspection period when you can. Roofs, electrical panels, plumbing and HVAC are the usual budget breakers.
3. Permits. Open or expired permits on the property can delay a resale. Check with the city or county building department before you close.
4. Holding and selling costs. Insurance on a vacant property, utilities, taxes, loan interest, and closing costs on the sale, including Florida's documentary stamp tax on the deed, all come out of your profit. Try the closing cost calculator.

Land: questions to answer first

• What's the zoning and future land use, and what can be built by right?
• Is there legal road access and are power, water and sewer available, or will you need a well and septic? Septic permits in Florida now run through the Department of Environmental Protection.
• Are there wetlands on the parcel? Those can require permits from the St. Johns River Water Management District and limit where you can build.
• What flood zone is it in? Check any address with the flood zone and elevation tool.
• Is a survey, soil test or environmental review needed before closing?

Selling an investment property

If you're selling a rental, timing around a lease matters. A property with a good tenant in place can appeal to other investors, while a vacant home usually shows better to owner occupants. Talk to your CPA early about capital gains, depreciation recapture and whether a 1031 exchange makes sense for you, since those decisions have to be set up before closing.

I'm not a tax advisor or attorney. For tax, legal and lending questions, I'll point you to the right professionals.