According to data from the National Association of Realtors, on a national basis existing home sales rose 7.8 percent to 4.82 million in August, the highest level since May 2010. The median price of an existing single-family home in August was $187,400, down from $187,800 last month and up from 171,200 a year ago.
Information from the website Trulia indicates that on Sanibel Island, the average price per square foot was $449, an increase of 25.1% compared to the same period last year. The median sales price for homes on the island from June through August (2012) was $560,000 based on 62 home sales. Compared to the same period one year ago, the site reported no increase in the median sales price while the number of home sales decreased 30.3%.
There are currently 533 resale and new homes in Sanibel on Trulia, including 32 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
All this data adds up to historic opportunity to buy vacation homes and condos at historically low prices with amazing interest rates. Many owners that are not yet at retirement age are making it financially feasible by renting their property when not in occupancy.
Some points to consider about renting properties on Sanibel or the Fort Myers area:
- Some communities (including Sanibel Island) allow weekly rentals of condos, but many associations limit rentals to monthly or restrict the number of times per year an owner can rent.
- Many single family homes are restricted to monthly rentals.
- Captiva Island does not have these rental restrictions.
As a general rule, the shorter the minimum rental period, the easier it will be to rent the property. Therefore, condo complexes that allow weekly or shorter rentals can provide the best potential income.
Also, direct beach front condo units tend to rent more frequently and at a higher rate than units with limited Gulf views (of course they sell for more too). Some owners of near beach units are able to generate good rental income as these units are less expensive to buy and provide vacationers a lower priced option.
During peak season (Jan, Feb, and March) most units in the area are easily rented. Off-season is more difficult to rent although the Fort Myers/Sanibel area welcomes many guests from Europe and other parts of Florida during the summer months.
A recent article in Susan’s Guide to Sanibel sheds some light by providing a survey of Sanibel Island condos sold from 1/1/2011 through 9/15/2011 with the reported rental history.
The numbers below are based on “reported” income and many had significant owner use of the unit. Most are not actively marketed by their owners, but instead rely solely on their property management company for bookings.
|Sold Price Range||2010 Reported Rental Income|
|$200,000 – $400,000||$12,000 – $33,000|
|$400,001- $600,000||$25,000 – $53,000|
|$600,001 – $800,000||$35,000 – $80,000|
The article also listed a number of units that were currently for sale that also reported their rental income history.
|Condo Complex||List Price(as of 10/6/2011)||2010 Reported Rental Income|
|Sanibel Arms West||$415,000||$28,500|
At the Sanibel Harbour Resort & Spa, we manage a number of units in both towers that produce gross rental income of $30,000 – $40,000 per year. The owners typically “net” about 75% of this amount which can be used to cover other ownership expenses such as condo dues, utility costs, real estate taxes and mortgage payments.
Year to date (through August 2012), the average price of a condominium at Sanibel Harbour was $352,875, a 4.6% drop from the average sale price in 2011. Based upon the information provided above, the average rental income generated by a unit at Sanibel Harbour compares favorably to the units on Sanibel Island.