What Kind Of Return Can I Expect From A Rental Property In Davenport, 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 Davenport, 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 Davenport, 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 whether to take the plunge. 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 guideline 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 guess 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. I've seen HOA fees as high as $600/month and as low as $241/year. This fee is always in the listing and must be disclosed prior to the sale, so don't worry about it sneaking up and biting you.

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 rental home in Davenport, 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:

List price-$104,999

Expected Rent-$1,100/month or $13,200/year

2009 Property Taxes (without homestead exemption)-$2,230

Home Owner's Insurance-$1,800/year

HOA Fees-$501/year

Management Fees-$2,250/year

Maintenance Fees-$900/year

Possible Net Yearly Income-$5,519

It's just an example, but I'd say that's pretty good, not a bad way to go. I hope you found this information to be helpful.