Quote:
Originally Posted by DrHitch
Owning a home and using it for rental is NOT for the faint of heart..
1) The carrying cost of a home with 2nd mortgage is about $35,000 per year (just to keep it alive). Therefore, you need $3,000 per month to break even (assuming you're carrying a mortgage)
2) Costs for everything have skyrocketed (lawn, utilities, insurance, etc). A 2nd mortgage is well north of 6%
3) Rentals elsewhere in Florida are INSANE. Naples rates in "high season" are above $10,000 per month for a shoebox condo
4) Although the supply of houses in The Villages that have been bought exclusively for rentals (real estate is not a great investment tool), these rates on RFAV and VH4R are actually low, compared to Florida coastlines. It's a case of supply and demand and competition.
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I thought most in TV either paid cash for homes or carry a mortgage that benefits their tax return. A second mortgage seems few and far between if at all. Some may have equity line for adding a pool, since refinancing a 2% loan would be insane.
When ever we have added to our new build, just pay cash, no loans involved. Pretty sure we are in the majority in TV.
That said we have had investment properties in TV since 2010, and have never had to negotiate a rent, plus had no less than 29-30 applicants. Those who have investment experience can give honest answers, except for one year, our properties were long term, so different investment compared to short term.