Cape Coral Real Estate News & Lifestyle

50% Rule - what?

If you are currently living in SW Florida or considering a purchase here anytime soon you’ll want to understand what this means.

The 50% rule is a FEMA rule that basically states that if the repairs needed to the house are over 50% of the home’s value (depreciated/actual value - not market value is my understanding) then you may be obligated to bring the house up to current Hurricane Codes. 

What could this mean? Well, the exact information is still being worked on here in the City of Cape Coral. They have made a couple of posts about it but nothing seems to be official…yet.

However, this could mean that the house’s elevation needs to be raised to higher levels. Especially if the home was built many years ago it could be several feet below the current flood codes. Perhaps the house will need to be lifted and fill dirt put underneath or perhaps the house will have to be lifted with a stilt structure under it? Or maybe it would have to be completely torn down in extreme cases. 

The roof will most likely not just require a new reroof but most likely hurricane straps, additional brackets, and nails to be brought up to code. 

Understanding these figures before you begin work or take on a new project is critical. 

You can check with local permitting departments for information. At the present time, the city of Cape Coral is suggesting anyone with a home built prior to 1981 to wait until the information is made available to the public before making any repairs. They are suggesting a date of Dec 1, 2022. You can read the article here https://www.capecoral.gov/newdetail_T3_R683.php

Here is that current verbiage 

“The City of Cape Coral advises residents who own a home built before 1981 not to make repairs until December 1, 2022. 

The 50% Rule, a regulation of the National Flood Insurance Program, requires structures with damage exceeding 50% of their market value to be rebuilt consistent with the current flood elevation and Florida Building Code. The City doesn't want residents to pay additional costs to repair structures before determining whether it has received 50% or more damage.

Cape Coral’s City Council is expediting the approval of an ordinance that may remove regulations, to make it easier on the homeowner when determining calculations for the 50% Rule.”

You can also learn more at FEMA as well. Here is a link to a pdf https://www.fema.gov/pdf/floodplain/nfip_sg_unit_8.pdf

Here is a link to an article put out by the Florida Association of Realtors as well https://www.floridarealtors.org/news-media/news-articles/2022/10/sw-fla-owners-surprised-femas-50-rule

Please keep in mind that this is a time-sensitive post meaning the information contained in it may change. (Dated Oct 25, 2022) We will work to update this post as information becomes more available.

The Cape Coral real estate market is obviously increasing. I wanted to take a look at homes with gulf access as they are our most popular. 

This past year, in 2021, the prices in January were averaging $695,297 and by December 2021 they were averaging $908,070. This is a major increase over the course of 1 year. 

I went ahead and also pulled a report to show the past 10 years trends as well:

If you would like to invest in a Cape Coral Gulf Access home, we'd love to help you find the one!

Start your search now for your own beautiful Gulf Access home in Cape Coral, Florida.

So, you want to invest in real estate in SW Florida? Well, you have arrived at the correct place for assistance. Our team has been helping real estate investors through multiple up and down real estate markets over the past 20 years right here in beautiful Cape Coral, Florida! While some of our agents are newer they have experienced the training from our dedicated real estate broker & experienced mentor agents to help guide you to the right investment for your needs.

This article is going to address rental opportunities. I will write another article about potential remodels in another post. 

Please also keep in mind that if you are finding this post in the future, it was written in the Spring of 2021 so prices and rental rules, and expectations could have changed by now. For up to the minute stats and advice always reach out directly to one of our highly trained licensed real estate agents at our office, Florida Future Realty, Inc.

We have real estate investors from beginner/novice, to experienced reaching out to us about the right rental investment for their portfolio. In this article, I am going to cover the 3 most sought-after rental opportunities we see in our current market. I hope this information assists you with deciding if our area of Cape Coral (and surrounding markets of Naples, Ft Myers Beach, Bonita Beach, Sanibel, Captiva & Ft Myers) is for you.

Most of the investors I speak with are looking for a hybrid investment model. I just made up this term because they are wishing to rent out the home (or condo) often but they would also like to use if for their own personal use as well. Most of these investors are not heavily looking into returns and are mostly interested in covering all or some of their costs.  They see this as a long-term investment and may be moving down in the next few to several years as well.

Cape Coral Gulf Access Homes

Depending upon your budget in this case, I often suggest either a 3 bedroom, 2 bathroom pool home or a larger pool home on the water. Cape Coral has waterfront both with Gulf Access and also waterfront homes on what we call fresh water that do not lead out to the Gulf of Mexico. Both can be furnished to make great vacation rentals but if you are an avid boater you will want to look at homes with the easiest and quickest access out to the Gulf of Mexico. Obviously, these homes are the most expensive of them all. 

At the time of writing this, homes with very quick, direct (meaning no bridges or locks to contend with) access, that are in the right location and condition to be a lucrative vacation rental are starting in the 600s and going up from there with the average cost being around $800-900k. For these prices, you can acquire a very nicely appointed vacation rental, or a home that would make a great vacation rental with some minor updates and/or furnishings. Homes in this price range are renting between $8-12,000/ month during season. Our peak season is typically described as Jan-March however many owners find themselves getting vacation rental rates as early as November and as late as through April. Our “off-season” is the summer months. While you can absolutely still rent your house out during the summer months, we find that the rates are about half of the seasonal rates and also come with a vacancy rate as well. In the summer months, it is also common to find people looking to rent for just a week or two versus in season you often have people wanting the entire 3 months or at least a full month rental. 

Does this sound ideal? Get started with a search for Gulf Access Homes in Cape Coral.

Cape Coral Pool Homes - Off water

With off-water homes, you can imagine that the rental rates are not nearly as high however it can still be lucrative. A typical 3/2/2 (That’s 3 bedrooms, 2 bathrooms, and a 2 car garage) pool home that would make a nice vacation rental can be purchased for around $350-400k in today’s current market. This home can rent for about $3000-3800/month during the seasonal months (see above) depending upon location and amenities. Start searching for pool homes in Cape Coral now.

Annual Rentals in Cape Coral

The third investment I want to touch on are the annual rentals. With an annual rental, you do not have to furnish the property and you get a long-term tenant. You also save on having to pay for electricity, water, sewer & internet. We still suggest that you handle the pool & lawn maintenance though. Off water homes are usually more ideal for this as with an annual rental you are asking much less per month and with the holding costs of a higher-priced luxury waterfront home, this just doesn’t make much sense to most investors. But a nice pool home can easily rent year-round for about $2,000-2,400 in today’s market. A house without a pool can rent for about $1600-2,000. These homes, without pools, can be purchased right now for under $300,000.

In Cape Coral, Florida at the present time, the only rule for rentals is that they require a minimum of 1 week stay. They also just passed an annual registration as well to go into effect Oct 2021.

If you are looking inside of an HOA or Condo Association there will be additional rules. Many complexes do not allow rentals and most of the ones that do have stipulations in place like you can rent up to 4 times a year at a minimum of 90 days stay, etc. So each complex’s rules will need to be studied carefully.

I hope this article helps you get an idea of what our current real estate rental market in Cape Coral looks like. Obviously, this is a very broad picture and once we connect we are happy to narrow down the picture for your specific goals. 

Cape Coral Real Estate Property for Sale Statuses Explained

Have you ever wondered what certain statuses mean that you see in the real estate marketplace? Some are very local in nature while others are universal. In this article, we will discuss the different statuses you may come across in the Cape Coral real estate market.

FOR SALE

Properties that are for sale are available for viewing, placing an offer and purchasing. They may or may not also be available for rent.

FOR RENT

Properties that are for rent are available for leasing/renting. They may or may not also be available for sale.

LEASE PURCHASE / RENT TO OWN / LEASE OPTION / LAND CONTRACT / SELLER FINANCING

This generally is used for a property where the seller is open to alternative selling scenarios. The seller may be open to seller financing or lease purchase terms. You should discuss the terms and pros/cons with your real estate agent.

Active Status

First of all, when a property is listed for sale it is known as “Active”. This means it is active on the real estate market. MLS is a term used by real estate agents to denote their “Multiple Listing Service”. The MLS is a data share program for licensed real estate agents to cooperate with each other. This means that they are working with other real estate agents and also share their commissions with another real estate agent to bring a buyer.  Most MLSs also share or syndicate their listings to other real estate websites/portals and even other real estate brokerages’ websites. This should mean that there are no accepted offers on the property and that is available for showings. There could however be offers on the table but until an offer is accepted by all parties it remains in ACTIVE status.

Pre-Listed or Coming Soon Status

Sometimes you may see something marketed pre-listing. Real estate agents may use terms such as “coming soon” or “not on the MLS yet”, etc. You may also hear of a term a real estate agent uses as a “pocket listing”. This typically means that the listing agent (real estate agent working for the seller) has an agreement to list & sell the property but they have agreed to keep it off of the MLS until a certain date in the future. Why would a seller want this? There are a few reasons but most likely the listing agent has suggested it to try to find a buyer on their own without the help of other real estate agents. They may have a buyer pool through their own database or their brokerage where they can tap into buyers searching for homes. This allows the agent to sell the home quicker and possibly to work with both the buyer & the seller themselves. This is completely legal in the state of Florida as we are all transaction brokers unless otherwise noted. We can get into representation in another article but for this article, I will keep on track to discuss the statuses. As a seller, you may want to “test” the market before you actually go live on the MLS. Perhaps you are still working on staging or repairs to prepare for the market or you don’t want many showings right now, etc. The cons of going under contract before the house is actually listed on the MLS is that you may end up with an offer below market value or for less than you could have otherwise received after being marketing thoroughly. Obviously, this is something you’ll want to discuss with your real estate agent and does not happen with all transactions. Some MLSs do NOT allow properties to be pre-listed or marketed prior to being active on the MLS.

Active Contingent

When a property is listed as “active contingent” this means that there is an accepted offer on the property however there are still contingencies to be met. A contingency in a real estate sale is usually for an inspection period or a financing period for the buyer. This means that the buyer has so many days to complete their home inspections and obtain financing. Usually, during the active contingent phase, the seller will still allow others to see the property or put in back up offers but a buyer should understand that it is under contract with another buyer. Sometimes this is also called “under contract”.

Pending 

When a property is marked in a pending status this means that the property has an accepted offer and the contingency time periods have passed or have otherwise been removed. This typically means that the closing will be happening soon. There is still a slight chance that the property may not close but in most cases, this means that the property is no longer available to see or place offers on. Sometimes this is also called “under contract”.

Back on the Market

This status means that the property had been under contract for purchase with another buyer but something went wrong. It could have been an issue with the property but more times than not it has something to do with the buyer. Either they changed their mind or were denied their financing in most cases. You can always have your agent ask what happened. If it was due to an issue of the property it must be disclosed.

Closed / Sold

Once a property is marked as closed or sold the property is no longer “on the market” & has transferred ownership from one (seller) to another (buyer). 

I hope this has helped you with your real estate search. Should you have any other questions please reach out to our office to speak with a licensed real estate agent to discuss. We look forward to working with you!