Posted by admin | Posted in vacation rentals | Posted on 03-03-2011
Tags: beachfront condo rental in florida, cheap condo rental in florida, condo rental in florida, condo rental in florida gulf coast, condo rental in florida keys, condo rental in florida panhandle, florida, monthly condo rental in florida, rental, rentals, travel, vacation
Is There Any Profit in Renting Condo’s?
Hi Guys,
I am considering purchasing a condo in Florida to rent out and just wanted to get some opinions on whether or not you think that there is any profit in renting a condo in either Naples or Miami areas? I know that allot of condos impose rental restrictions and HOA fee’s… Is it still possible to make any profit or break even on such an investment in these areas? Would I have more luck elsewhere? If so, where? Would be happy to hear some of your thoughts! Thanks in advance!
I own and rent condos and there is a profit if you keep them occupied. Part of the profit is in the tax depreciation allowed which will have to be paid when you sell but that could be many years in the future. My rentals are set to produce about a 5% net profit per year on the total dollar investment which is a decent return. Here is the formula for that:
Let’s say I paid $100,000 for the unit. If I make $5000 a year profit, I have a 5% return on my investment. Right now, it is a little lower. In this recession, I had to drop the rental fee by $50 a month but the units are rented. My fees are high but the property taxes are low so I have a decent gross profit. Out of that comes repairs and fees so it isn’t ads high as it looks.
However, as time passes, the rentals will rise but my cost remains the $100,000 forever. Once you own it, you own it.
The tax depreciation earns me much more than the rental fee. Last year, the depreciation allowance on 3 units saved me well over $20,000 in federal income taxes. That is deferred to the sale of the property which is one reason many people hold on to property or when they exhaust its potential, just abandon it instead of selling.
I am also having fun with the project. I am retired and yet can say I’m still earning a living!
The Peninsula Condo Rentals Jacksonville, FL 904-565-9040
