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Generating passive income through investments in real estate is one of the best strategies for those who want to live on income and achieve financial independence. Including in this planning the purchase of real estate abroad will make the process even more profitable and also safe.
In this article we will show 5 steps to obtain financial freedom through real estate in Florida, one of the most sought after destinations by real estate invetors around the world. We will explain how you can generate passive income and multiply your assets, through the so-called real estate leverage.
What is passive income?
Passive income is the money you earn without depending on your effort or work. It is a continuous cash generation with little or no involvement. Some common forms of passive income include: income generated by a fixed income fund, share dividends and real estate rentals.
The income generated by the rental of a property is considered a passive income. The two most common forms of rentals are: 1 – long-term rentals and 2 – short-term rentals (season).
In Florida there are several real estate options aimed at both types of rentals. In recent years, properties aimed at short-term rentals (season) have gained prominence in Florida and attract investors in search of the high expected return (ROI). They are properties that allow rental for any period on platforms such as Airbnb, Booking and others.
Passive income is often seen as a way to build wealth over time and acquire financial freedom, since it allows money to work for you, instead of you working for money. However, it often requires initial effort, knowledge and investment before starting to generate significant passive income.
See how to live on passive income with real estate in Florida
Obtaining passive dollar income from real estate in Florida is one of the most promising financial strategies. Several times we have warned on this blog about the numerous advantages of investments in real estate in Florida, especially those aimed at the practice of short-term rental (short-term rentals).
The cities of Miami and Orlando, in this context, are the most recommended global destinations for this type of application, since they receive tens of millions of people every year, practically ensuring enough audience to maintain high occupancy rates and promising returns.
However, the demand for rent in Florida has increased so much in recent years that properties focused on long-term rental also prove to be attractive as an investment.
Short-Term Rental Vs Long-Term Rental! What is the best investment strategy in Florida?
The great demand from investors in Florida has always been for real estate focused on the practice of vacation rentals. The so-called Vacation Homes in the Orlando region, in communities such as Kissimmee and Davenport, are the best known of South Americans. They are large houses within gated communities with total infrastructure and privileged location near the parks or other main attractions in the region. They are enterprises formatted for rental practice for short periods and compete with the hotels.
Compared to long-term rental, the practice of seasonal rentals brings some advantages. Generally, the expected return on the rental of a Vacation Home is greater than the long-term return. It is possible to charge higher prices on the daily rate in high season periods. Turnover brings greater exposure to the property and requires constant maintenance, valuing the property. There is also a bureaucratic advantage that is the ease and practicality that online platforms have brought today (Aibnb, Booking, Homeaway, etc.).
The city of Miami, which has traditionally always been more restricted in relation to the practice of seasonal rental, has recently relaxed municipal rules to allow the construction of new projects aimed at this format. The central region of the city, Downtown, is where most of these enterprises are concentrated.
However, with the high demand for long-term rentals in Florida, this modality has also been gaining ground among investors. Some rising regions in the state still offer ventures with attractive prices and promising returns on long-term rental.
We will talk more about the regions in the next topic!
Rents are getting higher and higher
With the rise in real estate prices in Florida, it is increasingly difficult for people to buy a property. Many people, without the financial capacity to acquire their own property, opt for rent. Greater demand for rents put pressure on the monthly values, increasing the return.
With regard to short-term rentals, Florida has been receiving more and more tourists in search of accommodation. The city of Orlando receives more than 70 million people annually. Size flow of guests presses up the daily value of houses and apartments per season, increasing, as a consequence, the expected return.
Legal Certainty
Different from other global destinations, the U.S. brings solid legal certainty with regard to tenant default and eviction process.
Ease in rent management stimulates investor by passive income
Many investors do not have time available to attract customers, manage the collection and still maintain the property. There is also all the bureaucracy of check-in and check-out of guests. The ideal is to hire an administrator (Property Manager) to do all this management. In this post we explain how the administration service works for customers who have already bought from us and want to get income from seasonal rent.
When hiring the property administration and rental management services with CAP International, the client does not even need to have contact with the tenant. All the work of capturing the client, from the assembly of the ad (with production of photos and texts) to the collection of values, is done by companies that have worked in partnership for years in Florida. Even the inspection, cleaning and preparation of the property for the next client is done by the administrator. Learn more in this article.
Interested in living on passive income in Florida?
AMG International Realty is a global real estate company specialized in Florida and aimed at the Brazilian public. If you want to know more about investments in real estate for rent in Florida, contact us right now and chat with me on WhatsApp: +1 305 318 6968 (Heloisa Arazi).
