Advertisement
  1. Business

Tampa Bay is one of the nation's top 10 areas for real estate investors

Published Oct. 16, 2015

Investing in real estate can be risky, but the Tampa Bay area is one of the best places to try it, a new study says.

Over the past year, investors have earned an average gross return of 16.7 percent on local residential properties they bought, according to the online real estate investment site BiggerPockets.com. That ranks the bay area sixth among the nation's top 50 metro areas.

"If you can afford to buy a home in your local market, then by definition you can afford to buy (residential) investment properties," said Scott Trench, author of the study.

Don't rush out just yet, though, to grab that foreclosed house down the street. The high returns cited by BiggerPockets don't factor in the many costs of investing, including closing costs, property taxes, insurance and — in the case of many properties — substantial sums for repairs and renovation.

As the housing market recovers, it's also getting harder to find good deals in sought-after areas.

"Carrollwood and South Tampa are almost impossible," Chris Smith, owner of Bay to Gulf Holdings, said Friday. "Those are probably the two hottest places — everybody wants to live there."

Smith's Tampa-based company, one of the largest local real estate investment firms, is a wholesaler that primarily sells to other investors. At any one time, its portfolio includes between 50 and 75 houses throughout the bay area. Among the current listings are a two-bedroom, one-bath house in Seminole for $74,900 and a three-bedroom, one-bath home in Gulfport for $189,900.

"I own so many properties I can sort of gauge the economy based on the call volume," Smith said. "We did have some slowdown for a few months, but it's been picking up in the last two, two-and-a-half weeks."

Volatility in the stock market over the summer deterred some would-be investors. "It's had a direct effect," Smith said, "because when the market goes down they won't spend as much."

Bay to Gulf Holdings buys an average of 20 houses a month, many in St. Petersburg, though "we have spread out a little more," Smith said. For resale purposes, he particularly likes three-bedroom, two-bath homes with two-car garages because they are in such high demand. And while they're getting harder to find, he also looks for older homes that have had a single owner.

"If you can purchase a foreclosure where a person has lived to the day of sale, that's good," he said.

Overall, Smith says, the bay area's reputation as a good place to invest is a mixed blessing.

"As this market becomes more publicized, there are more people coming here trying to purchase," he said. "Obviously, it becomes a little harder to buy discount. You have to make some money."

According to BiggerPockets.com, Dallas has produced the best results for real estate investors, with an average gross return of 19.5 percent. Miami ranked third at 18.6 percent and Orlando came in 10th at nearly 15 percent.

Rounding out the top 10 were Denver, Houston, Atlanta, Detroit, Austin and Las Vegas.

Contact Susan Taylor Martin at smartin@tampa bay.com or (727) 893-8642. Follow @susanskate.

ALSO IN THIS SECTION

  1. Casey Cane, chairman of the Pinellas County Housing Finance Authority. Pinellas County
    An inspector general’s report says he also engaged in "unethical behavior'' as a contractor.
  2. [Getty Images] Gettty Images
  3. Tampa Bay homeowners are now able to sell their homes to Zillow. Zillow
    It joins Opendoor and Offerpad in making "instant'' offers.
  4. The microbrewery Double Branch Artisanal Ales is the first tenant signed at The Grove after the acquisition of the Wesley Chapel shopping center last month by Mishorim-Gold Properties for nearly $63 million. Double Branch Artisanal Ales.
    Mark Gold wants The Grove at Wesley Chapel to become the community’s downtown
  5. Jeffrey D. Senese was inaugurated as Saint Leo University's 10th president. Pictured, Monsignor Robert Morris (left), Class of 1979, and a member of the board of trustees, and D. Dewey Mitchell, chair of the university’s board of trustees, bestow the presidential medallion on Senese. Renee Gerstein and William Speer, Saint Leo University
    New and notes on local businesses
  6. Dr. Manjusri Vennamaneni (center) was awarded Businesswoman of the Year by the Indo-US Chamber of Commerce. With her are Matt Romeo, President of PrimeCare (left), and Dr. Pariksith Singh, CEO, Access Health Care Physicians. Vince Vanni
    News and notes on local businesses
  7. Tampa Bay Lighting host a watch party on the beach at the Tradewinds resort on St. Pete Beach in February. LUIS SANTANA  |  Tampa Bay Times
    TradeWinds is the biggest resort in Pinellas County.
  8. A view of the downtown St. Petersburg skyline and waterfront from over Tampa Bay.
    The news that the Tampa Hillsborough Economic Development Corporation wants to change its name to include “Tampa Bay” has been met with resistance.
  9. The Whole Coffee Company makes Dunkin’-branded Coffee Thins as well as Tim Hortons Double Double bars and its own Whole Coffee Company-branded nudge coffee bars. (Photo courtesy The Whole Coffee Company) The Whole Coffee Company
    The Whole Coffee Company, which is based in Miami, was previously known as Tierra Nueva Fine Cocoa. ProspEquity Partners of Tampa owns a majority stake in Whole Coffee.
  10. The Corona Cove opens as the Florida Aquarium's new outdoor bar. The beer company is pledging continued donations to aid conservation efforts. Florida Aquarium
    The beer company also has pledged donations to aid conservation efforts.
Advertisement
Advertisement
Advertisement