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Old 12-31-2016, 01:01 PM
 
44 posts, read 51,862 times
Reputation: 43

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Hello all,
I am considering investing in property (single family or condo) as an investment with the purpose of generating 5-7% returns and potential long term capital appreciation with a budget of $350K as a cash investor. Any thoughts on:
1. Areas to consider in PB/North Broward where there is demand for rentals and potential for appreciation?
2. Cost of using a property management firm?
3. Single family vs condo?
thanks,
vrr
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Old 12-31-2016, 02:02 PM
 
Location: West Palm Beach
216 posts, read 326,215 times
Reputation: 333
I hope you don't use this forum as your sole source for financial investment advice
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Old 01-01-2017, 05:12 PM
 
44 posts, read 51,862 times
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Quote:
Originally Posted by Elbig View Post
I hope you don't use this forum as your sole source for financial investment advice
Of course not
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Old 01-02-2017, 06:49 AM
 
17,142 posts, read 21,805,891 times
Reputation: 29350
Quote:
Originally Posted by vrr106 View Post
Hello all,
I am considering investing in property (single family or condo) as an investment with the purpose of generating 5-7% returns and potential long term capital appreciation with a budget of $350K as a cash investor. Any thoughts on:
1. Areas to consider in PB/North Broward where there is demand for rentals and potential for appreciation?
2. Cost of using a property management firm?
3. Single family vs condo?
thanks,
vrr
You missed the boom by 3-4 years......prices are too high now (back to 2005-06 levels in many markets).

Condos are usually not winners in appreciation due to the fact there are dozens of identical units in that same building. The HOA fees can also take quite a bite out of your monthly income.
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Old 01-02-2017, 07:17 AM
 
293 posts, read 498,019 times
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while the prices are higher now and back to pre-cash levels a 5% ROI is very obtainable. single family homes are better for appreciation and holding values. I own a bunch of single family homes I bought in the past 4-5 years and I get an average of 6% ROI Based on the current value , 9 % plus if I calculated ROI based on my all in price. But when I renew a lease or get a new tenant i look for 6% based on current market value and not a problem.. 7% would be a real stretch unless you bought in a not so desirable area, the more desirable of an area the lower ROI but better the tenants will be and better chance of capital appreciation.

if you use a property management firm your ROI will be a lot lower. If you are not living in the area I would not bother investing. There is a huge demand for rentals with limited supply, at least where I own my properties all in Wellington
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Old 01-02-2017, 07:54 AM
 
Location: Gainesville, FL; formerly Weston, FL
3,198 posts, read 3,141,342 times
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When we rented our SFH in Weston, we paid the realtor who brought us a pre-qualified tenant one month's rent as a commission, which I understand is routine. We decided not to hire a poperty manager, since we had a team of fix-it people (handyman, plumber, etc.) that we knew and could use. If we had, we would have been charged 10% of the monthly rent as a fee, which I also understand is standard.
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Old 01-02-2017, 09:49 AM
 
Location: Palm Beach County
1,708 posts, read 4,388,629 times
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You probably can find a small duplex in that range. I sold a duplex last year in Wellington for around that price and he's doing pretty well renting it out. Rents continue to increase but that might slow down a bit.
Property managers will definitely cut in your profit but it if you are out of state it can be tough to manage.

Your expectations seem pretty reasonable/doable.
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Old 01-02-2017, 01:22 PM
 
293 posts, read 498,019 times
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you can find single family homes in the $350,000 range in Wellington. example of a listing and this one is a good deal with a very good location and pool and large canal in back, and across canal is 5 acre equestrian homes

1807 Primrose Ln, Wellington, FL 33414 | MLS #RX-10275692 | Zillow

asking price $331,550, assuming a $320,000 purchase price leaves 30,000 to fix up a little bit then $350,000 all in. Remember cash buyers have zero closing fees in Palm Beach County. If you refresh baths and kitchen appliances , remove carpet in bedrooms etc you will fetch higher rent so well worth the improvements

This home will easily get $2500 per month with the improvements I suggest and more likely $2600, as is $2300 to $2400

Below is the numbers on this home, all in monthly figures , this assumes landlord pays for lawn and pool service.

Property Taxes 450.00 (property taxes will go up to $5400 once home sells and no homestead)
Insurance 170.00
HOA Fees 0.00
Landscaper 70.00
Service America Contract 40.00 (home appliance and systems warranty)
pool service 75.00

Total Expenses 805.00

Description Amount
monthly rent 2,500.00
expenses (805.00)
cash flow 1,695.00
annual Percent
x12 20340 5.81%
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Old 01-03-2017, 08:42 AM
 
44 posts, read 51,862 times
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Thanks BVG_Steve and wizwrap. Is it common for the landlord to pay for landscaping and pool service? In a previous home I rented in TX, I didn't pay for landscaping.
I am local (North Broward) and can probably find the handymen and others as needed.

BVG_Steve - about how much time do you spend on activities related to your rentals? Besides the financials, I am also trying to figure out the cost/benefit of managing this myself in addition to a full-time job Vs "outsourcing".
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Old 01-03-2017, 10:13 AM
 
293 posts, read 498,019 times
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I always include pool and landscaping with my rentals and all my homes have pools. Having a pool gets you more money in rental, re-sale and makes it easier to rent and sell. I would tell you about 50-50 on whether landscaping is included. When you include it you simply pass it on to tenant anyway. I would rather have my guy doing it then relying on a tenant.

I spend very little time on my rentals. I have all higher end properties on purpose so I have less chance of a non paying tenant as my homes are all worth upper 300's to mind 400's, all have pools. I also have service america contracts on all homes and tenants have the telephone number and contract # so any issues they simply call service america vs calling me. The only time I really put in is when a tenant moves out. Usually you need a handyman to re-paint or touch up paint, re-caulk baths, and a cleaning woman.

I have done some improvements as well when tenants move out. If the home had carpeting and it is starting to show wear and tear, I replace with either tile or laminate. Every time I made improvements my rents have gone up a lot. It pays to update kitchens, baths, etc.

I am self employed so my rental properties are my pension.

bottom line is the better the neighborhood, the better the home the less time you will likely spend as you will get netter tenants. I search for premium properties with good locations, ie lake views, pool is must have. and always have home updated . It pays off.
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