What Kind Of Return Can I Expect From A Rental Property In Poinciana, Florida?
I've recently had a few people ask me to break down what expenses they need to know about if they decide to purchase a rental home in Poinciana, Florida. The first thing to keep in mind is that pricing is always the most important factor when dealing with properties.
This included the price you charge for rent when you purchase a rental home. You have to be realistic about how much income a Poinciana, Florida rental home is going to provide. Many people ask me whether a property will rent out easily and my standard answer is any property will rent out easily if you price the rent correctly. If you price the rent too high you won't get a tenant in the house.
There are also a few other things to keep in mind when you are making the decision. The example I'm going to give is for a long term rental. I think renting a property out for long term leases is a better investment. Just my opinion. Taxes are always everyone's first worry. I can tell you what the taxes were for 2009 because that is in the public records. But taxes will change with the market. The taxes each year are based on the property's assessed value. That value could be higher or lower each year so the 2009 taxes are more a guide than a rule if you know what I mean. They will change.
Of course you will need home owner's insurance. The price on this will differ depending on where the home is located, what the home is worth, whether you are in a flood zone, and which company you decide to purchase insurance from. I can only give a ballpark figure on this one.
The next thing to consider is the home owner's association fee. Not all homes have home owner's associations but most will. The home owner's association fee in Poinciana is currently $240/year. Now I think that's pretty reasonable.
Then there's the question of who is going to manage the property for you and how much are they going to charge? In the example below I'm just going to give a rough estimate of what it would cost to manage your property.
And lastly, maintenance fees. The lawn has to be cared for and there are always things in homes that break that need to be repaired.
So without further ado, I've picked out a pretty average 4 bedroom, 2 bath rental home in Poinciana, Florida to use as an example. Please keep in mind that this is a very rough estimate and I'm assuming that you are buying the property with cash. Here are the numbers:
Expected Rent-$900/month or $10,800/year
2009 Property Taxes (without homestead exemption)-$1,830/year
Home Owner's Insurance-$1,200/year
HOA Fees-$240/year
Management Fees-$1,800/year
Maintenance Fees (lawn services)-$600/year
Possible Net Yearly Income-$5,130
It's just an example, but I'd say that's pretty good when added to the appreciation of your property. Not a bad way to go. I hope you found this information to be helpful.
Image courtesy of Per Ola Wiberg~Powi at Flickr
