Where's a good place to start looking for a rental investment property? (hours, people)

[equalrightsforeveryone]

Originally Posted by Jason Gates

Hello,

I am looking to purchase some investment rental properties in the Cape Coral or Fort Myers area. My budget is $60-70,000 per house and I am looking for single family residential. Hopefully a house that's less than 5 years old and of course no Chinese drywall.

There are a large number of houses to choose from and I would appreciate if someone could give me some advice. For example should I even consider Ft. Myers or would I be better off with CC? How about areas in CC? What do people consider is an area with good access to shops / schools and what are not so good access areas.

Any advice would be much appreciated.

Thanks for your time.

Jason

Right now if you want to get in to real estate you may want to look at some REIT's like Ticker Sym. NLY. It currently has a 14.6 percent ROI

That is roughly $10.000.00 per $70.000.00 of investment. much more than you would get out of a house in CC or the Lee County area.
And none of the hassles of owning a rental property.
Something to look in to.

[JeffTumbarello]

Quote.com - NLY Financials

Looks like these guys have hit a wall recently. Switch the report to Qtr

[Kim in FL]

Originally Posted by Jason Gates

Thank you very much for your detailed reply to my question.

You and another person mentioned condos. "I would look at Condos like someone else had mentioned. Just and idea: Gateway has condos starting in the 35k range, Royal Greens. It is a gated community out there. HOA fees in the mid $200 range."

For units like this can you tell me how easy is it to find tenants, do you have any idea what the vacancy rate and approximate rentals would be? $200 for HOA is monthly? How about taxes and other costs for units like this?

You mention NE and NW Cape. Are there any dividing highways that approximately split Cape Coral into the different NE, NW areas?

Thank you in advance for your help.

Im sorry, but if you have to ask such questions about highways, maybe this area isn't for you. Have you spent anytime here at all? If not, I suggest you come down and stay for at least a month to get a feel for the area, meet some agents, see some houses and gather A LOT of information.

[Florida Paradise]

Originally Posted by Kim in FL

Im sorry, but if you have to ask such questions about highways, maybe this area isn't for you. Have you spent anytime here at all? If not, I suggest you come down and stay for at least a month to get a feel for the area, meet some agents, see some houses and gather A LOT of information.

Totally agree. It is almost inconceivable how much info you NEED to make an informative decision. Although I DID make several trips down before buying... the fact that the in-laws "snow bird" down here 7 out of 12 months per year (for the past 15 years), really gave me an upper hand. I still say, if you buy in Ft. Myers you must know each and every neighborhood... There are 100's of them and one area that is awesome can be right next to a "seedy" neighborhood. Example, Whiskey Creek is a very nice area, but there is a townhome community by the same name (for which you would think is part of a GREAT area) that is a complete hole. Be diligent.

[tjstrain]

Why look at a few house for $ 60 to $70 ? How about one for $120,000 to $140,000. It will be newest, bigger, better neighborhood, better clientele looking to rent, means they'll take care of it with less costs to you. You got to look at your return on your investment. There's a poop load of upper-middle class people who need and want a nice size house in nice neighborhoods, willing to pay top rent for them. It's a landlords market right now. I had a family ask if they could terminate their lease 3 months early after being in for two years. I let them and turned around and raised the rent by $300 and had people wanting it without batting an eye at the price. A lot of renters who are losing their homes to foreclosure were prolly paying a monthly mortgage of around $2500+ a month. If your renting for under $2000 a month their really happy, thinking their actually saving money.
You buy a not so good house to rent, that's the clientele your gonna get to not take care of it.

[equalrightsforeveryone]

Why Look at houses at all. When there are REIT's That pay 14%. And no hassle with renters, no insurance, no property management fee's, no repairs, no hassle with the city, no property taxes, no ridicules water bills, no HOA Fee's, nothing to hassle with, and if you live in FL the only thing you have to worry about is paying Fed. taxes that apply. 14% on a $140,000.00 investment is a whopping $19,600.00 per year, or $1633.33 per month, you will never make that on a rental property.

[rikoshaprl]

Reits prices fluctuate like stocks. There is no guarantee of a return on investment. If I believed that real estate prices were going lower, like equal does, I wouldn't be investing in Reits. You would lose money as people unload them.

Also, you could buy ten rental homes with 10% down for $140,000. If prices are up 25% in five years, you would have a 50% return per year on your investment. That is not counting any positive cash flow. That's why people invest in rental homes.

[nhkev]

Originally Posted by equalrightsforeveryone

Why Look at houses at all. When there are REIT's That pay 14%. And no hassle with renters, no insurance, no property management fee's, no repairs, no hassle with the city, no property taxes, no ridicules water bills, no HOA Fee's, nothing to hassle with, and if you live in FL the only thing you have to worry about is paying Fed. taxes that apply. 14% on a $140,000.00 investment is a whopping $19,600.00 per year, or $1633.33 per month, you will never make that on a rental property.

let's take a house like mine as an example. purchased for 85k (i purchased cash but let's say I put 20% down and financed 80%) rents for $950 per month minus principle,taxes and ins of $550 net $400 per month- $4800 yr cash flow divided by initial investment of $17,000 is 28% . Now the exact house, same street, sold w/in 60 days for $106k (my house is a little nicer due to extensive landscaping but is similar to when I bought it) but it comes out to a 25% increase in value. I've owned for 3 yrs so divide 25 by 3 comes out to 8%. 8 % appreciation added to 28% net cash flow. is 36% annual return. So I'd say your quote of you will never make that on a rental property can be added to your long list of wrong statements.

In your case of $140,000 investment. someone could buy 8 houses with 20% down in the $85k range. So 8 multiplied by $4800 is $38,400 yr net cash flow. and after paying a realtor and closing fees on the sale it would be $14, 640 profit on the selling end. So if someone bought 8 properties 3 years ago. The could expect 90% vacancy/ pay rates. for 8 properties netting 4800, for 36 months @ 90% vacancy would net them $155,520 and then make another $117,120 in profit from sales for a total return of $272,640.

So a $140k investment in 3 yrs returning $272k seems to outperform your REIT investment equal.

[nhkev]

Riko just corrected me via a pm......the appreciation of 25% was incorrect. The 14k made I based off original price of 85k when I should have based it off money invested of $17k which would give you 86% total return div by 3 yrs for 28% as opposed to just 8%....good catch riko

[mwlehman]

I bought 4 houses in SE Cape Coral in the $60-65k range, cash and rent them for a total of $3000 a month or about $36000 a year. I`m happy with my situation. My wife and I both work full time here in CC

I have one great tenant who has been with us for 2 years, he does all our maintenance and I actually just made him manager of our other properties , he takes care of all calls and repairs

I honestly did not have a clue what I was or am doing..but I figured now was the time to take some chances in my life. My wife and I are both in our 40`s