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I am hoping to purchase some holiday properties in Florida with the aim of starting a rental business.
With 2 properties, how much money can you realisticaly make?
I will be running this business from the UK
Hi there,
my name is Monika and i am a Real Estate Agent in Cape Coral since 15 years. Some of my clients have vacation homes over here they are renting out.
Running the rental business from the UK:
- you probably will need a property Management company in Florida to look after your homes, checking in and out your guests, take care about pool and lawn service, be there in emergency situations and so on. Normally those companies are either asking a flat fee per month or a percentage off your rent
- since your business will be based out of the UK you are pretty close to your target market (all Europe)
- regarding the rent amount you might be able to get – that depends on the house, location and what kind of amenities your home offers. A house on a Gulf Access Canal close to the Ocean with a pool will give you a higher rent than a house on a dry lot with no pool
- in the area around Cape Coral/Fort Myers you can see rent for vacation homes anywhere between 400,- and 3,000,-/week
- how many weeks out of the year you can get the home rented depends on your advertising and the local property management company. Out of my experience there is a year arround season for European Guests in Florida
Beside that i would like to advise you to carefully calculate your costs, add your monthly costs up like for example:
1) your mortgage
2) property taxes
3) insurance
4) Pool and Lawn Service
5) Property Management Company
6) Power and Water
7) Basic Phone
Basic Cable
9) Reserves for repairs
10) Advertising costs
So that you know pretty exact how much money the home will cost you every month, from there you calculate how many weeks out of the year you have to rent the home to break even and please don’t trust anybody who tells you you can rent the home without a problem for 360 days out of the year. Calculate with 50% and be happy if it is more.
For example:Take a Home on a Gulf Access Canal with a pool and calculate it with an average of 1,000 Dollar/week, rent it for 25 weeks that will give you 25,000 Dollar/year income from there you deduct your costs. If you can rent it higher and your costs will stay pretty much the same – your gain will be higher as well. You still have the appreciation in the value of the property.
I would rather calculate careful and be pleasantly surprised at the end of the year instead of calculating with a higher rent amount and a higher occupancy and learn at the end of the year that a mistake was made and the number don’t work out at all.
The Vacation Rental business in our Area Cape Coral/Fort Myers works very well for some people but some others are very diappointed to. Pick your homes careful in a good vacation location, either on a Gulf Access Canal or on a Golf Course – that it what most European Guests are looking for. If you pick a home on a Gulf Access Canal make sure that you don’t have to take a 1 hour boat ride to get out to the Ocean, as closer you are to the open water as better it is for your guests. They will tell their family and friends about it – the good and the bad. In a very short time you will have returning guests and recomandations if everything is almost perfect.
By the way right now is the perfect time to buy, You can find nice Pool Homes on Gulf Access Canals close to the open waters for under 400,000 Dollar, some even under 350,000.
Monika
what part of Florida? I live in South Florida and it depends on where you are buying S.Florida is more expensive to live and North Florida is a little less, but also depends on what city. I would say 1,000 for 1B 1,200 for 2B 1,500 for 3 , 2000 for 4B..
References :
http://www.weloan.us
Hi there,
my name is Monika and i am a Real Estate Agent in Cape Coral since 15 years. Some of my clients have vacation homes over here they are renting out.
Running the rental business from the UK:
- you probably will need a property Management company in Florida to look after your homes, checking in and out your guests, take care about pool and lawn service, be there in emergency situations and so on. Normally those companies are either asking a flat fee per month or a percentage off your rent
- since your business will be based out of the UK you are pretty close to your target market (all Europe)
- regarding the rent amount you might be able to get – that depends on the house, location and what kind of amenities your home offers. A house on a Gulf Access Canal close to the Ocean with a pool will give you a higher rent than a house on a dry lot with no pool
- in the area around Cape Coral/Fort Myers you can see rent for vacation homes anywhere between 400,- and 3,000,-/week
- how many weeks out of the year you can get the home rented depends on your advertising and the local property management company. Out of my experience there is a year arround season for European Guests in Florida
Beside that i would like to advise you to carefully calculate your costs, add your monthly costs up like for example:
Basic Cable
1) your mortgage
2) property taxes
3) insurance
4) Pool and Lawn Service
5) Property Management Company
6) Power and Water
7) Basic Phone
9) Reserves for repairs
10) Advertising costs
So that you know pretty exact how much money the home will cost you every month, from there you calculate how many weeks out of the year you have to rent the home to break even and please don’t trust anybody who tells you you can rent the home without a problem for 360 days out of the year. Calculate with 50% and be happy if it is more.
For example:Take a Home on a Gulf Access Canal with a pool and calculate it with an average of 1,000 Dollar/week, rent it for 25 weeks that will give you 25,000 Dollar/year income from there you deduct your costs. If you can rent it higher and your costs will stay pretty much the same – your gain will be higher as well. You still have the appreciation in the value of the property.
I would rather calculate careful and be pleasantly surprised at the end of the year instead of calculating with a higher rent amount and a higher occupancy and learn at the end of the year that a mistake was made and the number don’t work out at all.
The Vacation Rental business in our Area Cape Coral/Fort Myers works very well for some people but some others are very diappointed to. Pick your homes careful in a good vacation location, either on a Gulf Access Canal or on a Golf Course – that it what most European Guests are looking for. If you pick a home on a Gulf Access Canal make sure that you don’t have to take a 1 hour boat ride to get out to the Ocean, as closer you are to the open water as better it is for your guests. They will tell their family and friends about it – the good and the bad. In a very short time you will have returning guests and recomandations if everything is almost perfect.
By the way right now is the perfect time to buy, You can find nice Pool Homes on Gulf Access Canals close to the open waters for under 400,000 Dollar, some even under 350,000.
Monika
References :
you can check out my web site if you like:
http://www.spotfloridarealestate.com
Obviously depends on where you buy and whether you want to rent short or long term. Also, do you intend buying new or resale?
Sorry it’s like a piece of string if you think about it. I’ve held property in FL for more than 20 years both short & long. Overall, I’ve made reasonable money from rents – covering mortgage & overheads such as property taxes & mangement, etc. The best bit has been the exponential growth. Generally speaking property doubles every 5 years historically. Personally, through buying the right locations, I’ve exceeded this percentage.
Right now the market is very near rock bottom and it’s a truly excellent time to buy but, remember, location is absolute king in the end. Get it wrong and you’ll lose on both rental level and growth.
References :