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Florida Real Estate Blog

How do I increase my return on my safe investments?
January 17th, 2012 6:27 AM

We are hearing from more and more seniors and their care givers the request to purchase rental real estate. When your $100,000 certificate of deposit is earning less than 1 % a year. Rental Real Estate makes sense.

Just make sure you understand the market and what rent you can command. There are tools out there that we Realtors use to help investor class clients evaluate each property.

You need to know what you’re carrying costs are. Those are the annual fees you will be paying if the unit is rented or not. Such as Taxes, Insurance, Association Dues including any assessments, fees to have a property management company handle the property. Make sure you have a number for refurbishing the unit at the end of a lease.

Then calculate your annual rent, you should factor in at least ½ month a year for times when the unit is vacant. Subtract the carrying costs from the annual rent then divide the net income by the cost of the property to find your Rate of Return anything over 4% in today’s market is outstanding. Since you also have the opportunity to see appreciation over time on your investment.

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Posted by Jim Ruddy on January 17th, 2012 6:27 AMPost a Comment

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