Information from those who rent their homes
 

Hi there, we are looking to purchase a home and then rent it part of the year. I’ve been researching, and I’m hoping some would share here or privately if they feel the market is over saturated with rentals? Is it a profitable thing or do you just break even? Is there a certain area that is better for rentals? Thanks so much for any insight!

In normal times, you really just break even. If you are going to move in a few years, it is an effective strategy to beat inflation. If you are not going to live here, you make money when you sell. Maybe 5-6% a year. For some reason, everyone thought for the last year they could get rich, so they bought up a lot of property and are now renting them out. High season is still tight, but the rest of the year has seen less and less activity. I have 2 rentals, but I bought at much lower prices and mainly as an inflation hedge. How you make much money not with higher prices and higher interest rates is beyond me.

If you have been researching, do you have any experience being a slumlord?

What are you assuming for an occupancy rate?
What target market renters are you expecting?
Are you managing the property or are you having a PM perform that duty?
What high season low season rates are you expecting?
What are your annual expenses to cover?
Furnished or unfurnished?
annual lease or IDIQ? individual dates individual quotes?
Have you even searched your answers on here? of which there are many answers to your questions. .

as a long time corporate financial modeler amongst other job skills, and a TV slumlord, my intuition says that you don't have any experience with the research part

or maybe I am wrong, but can you answer any of the above questions?

9 more working days until former corporate finance guy

Even if you break even do you really want strangers living in your house? Are you prepared to have a dog running around chewing on things and scratching your floors? If the tenants say it is a service animal, you have no choice. You can't even charge a pet fee. Are you prepared to manage the house from out-of-town? If something breaks, contractors will rip you off. One bad tenant can cost you thousands of dollars in damage repair. If you want to be a profitable landlord, buy a really old, cheap house or houses and rent them on a full time basis. Unless you really need the money, renting a house that you also want to live in is not worth it.

If you are willing to rent to dog owners and include a decent golf cart as part of the rental you will have a long line of people begging you to rent your place. Otherwise rentals are a dime a dozen, especially in the non-winter months.

A dog owner can just tell you it is a service animal and you cannot refuse to rent to them or charge an extra fee. They don't even need to tell you in advance. That is the Federal ADA law.

As someone who has watched the rental market for some time, I can say its a very interesting market. There are really two narratives, one is that renters will pay whatever is asked and the housing inventory is way below the rental market demand. The second one is everyone on the planet has their home up for rent and the market is beginning to catch up. Currently on one web site alone there are 38 homes for rent for the the prime winter months of Jan to April. IMHO the day of getting 6 to 10K per month for a 3/2 are long gone, unless you get a foreigner who doesn't understand the market.

Your response was clearly meant to be snarky but I'm still curious why you label it "being a slumlord".

If you want to lock in your retirement house at 2023 prices, to use ina few years, renting is great.

More than likely, you’ll meet your cash flow.

With tax depreciation and writing off the expenses, you wont pay taxes on the income, most likely generating a loss carry forward, to use when you sell, to defer capital gains.

We rented our home furnished for the 3 years that we still lived and worked in TN. We bought at a reasonable price and furnished it with excess from our home and good items bought second hand. It was available year-round but usually was only rented 4 or 5 months out of the year; the high season.

We did use a realtor/manager since we were not on site. The first one was terrible and we fired them after 8 months. The second was much better.

Bottom line is we paid for the mortgage, utilities, amenity fee, and all the related expenses (including the furniture we bought) from the fees collected during those 4 or 5 months it was rented. We used the home for 2 or 3 weeks at a time when it was not rented. We did not have damage or any significant issues during those years. We probably were lucky in that respect.

We took it off the rental market, sold most the furniture in the house, and moved in full time when I retired.

How remarkable! Someone posted the EXACT SAME QUESTION - same words even - on one of the Villages Facebook pages! Around 4 months ago. There were dozens of responses too.

The general response was: don't do it, UNLESS you don't care about your neighbors or the community in which you have chosen to buy the property. In which case, do whatever you want.

Actually - with regards to renting someone else's property, the landlord CAN ask for documentation proving that the animal is a performing a service for a disabled person. That is one of the few exceptions to the rule.

Here's the Sunshine law about emotional support animals, specifically:

Statutes & Constitution
:View Statutes
:

Online Sunshine.

As I understand it, you can self train your own service animal. So, you can create your own documentation. As a landlord, if your tenant shows up with a dog that they didn't tell you about, you really don't have any option but to let the dog stay in your house, or risk being sued.

But you (the tenant) have to have proof that you (the tenant) are disabled and in need of a service animal. No, there is no official documentation for the animal. But there is official documentation to prove that yes, a disabled person really is renting and occupying this rental property.

If YOU are not disabled, then YOU don't need a service animal and therefore they can refuse to allow the animal to live in the unit.

if that's how you want to interpret it, that's your prerogative.

mostly hyperbole, maybe a bit malapropism, definitely tropes. . not to be taken literally or personally unless the boot fits

and since I own a rental in TV, that makes me a slumlord as well.

Please. As a practical matter, if a tenant has paid the rent, shows up with a dog, and says it is a service animal, the landlord has no choice but to allow the dog to stay, or risk being sued. And, how does the landlord even know there is a dog in the house? Also, there are plenty of lawyers who will sue the landlord. That is a fact and many dog owners know it. And, if you are out of town, how do you demand anything?

Any dog owner that falsely claims their dog is a service animal, in order to get special treatment, is a total scumbag and is doing a disservice to those with legitimate needs and a properly trained dog. We have owned dogs practically our whole lives and would never sink to that level. My older brother is totally blind and relies on his professionally trained seeing eye German Shepard for his independence and safety. People faking service dogs really pi$$es me off.

I totally agree, but a lot of people are taking advantage of the ridiculous, unenforceable Federal ADA law to take their dogs everywhere they go. I just saw a woman with a little dog running around Publix the other day with a sweater that said "service animal". I asked the cashier if they had a dog policy. She said yes, no pets, but she is not allowed to say anything to the dog owners.

Totally agree. Also with today’s prices you would be hard pressed to make much

You don’t really expect your competition to give you an honest answer do you ??
Do your own foot work , and act accordingly . IMHO

Welcome aboard

Rental
 

This area is literally receiving 1,000s of apartment units and many within the next 30 days:

301 near 466A a mega apartment complex has begun construction

462 in Wildwood there are literally 300 apartments opening up before Aug 1. In addition, “The Cottages” have just opened (not sure of amount). Furthermore, new construction on a housing project next to St Vincent de Paul just broke ground

On 466A directly adjacent to Colony a third party developer just purchased land and got approval for a large apartment complex.

A third party builder has just initiated construction on 501 of several hundred high rise apartment units ( maybe they want to see all the Villages construction and Coleman prison?)


In short, there won’t be much of a housing shortage here. The market will be saturated for some time to come. If you buy, ask yourself if it would even be worth it to rent it out.

You'll likely only be able to rent it during the high season...maybe December until maybe April. Do not expect to rent it other months because it likely will not happen. You'll be lucky if during the high season you have only one tenant for the whole time. Don't be surprised if you have 3-4 tenants during the high season...perhaps one month at a time. You can restrict your rental to longer periods but will reduce the number of possible renters. If you're lucky to find a longer repeating renter hang on to them...makes your life much easier and you'll find a friend in them who will take care of your place while they're there.

We have a rental that is managed by The Villages Hometown Properties. Yes they take a percentage for management, but worth it to us because we live thousands of miles away. They handle issues/complaints. Answer tenant questions. We started out using our rental for a convenient place to stay when not renting thinking we would move in one day, but found it felt too small, so we've kept it as a rental. On the cost side, in addition to mortgage (if you get one) and taxes, you'll need to cover the cost of TV/Internet, utlities, insurance -- in short every expense you need to cover for any home. You'll also get some of the tax advantages. If you buy turn key, you won't need to furnish, but budget for wear and tear and possible replacement of appliances/furniture. You'll likely just cover costs with seasonal rentals with a bit over but it's a way to earn some money while you are not here. Our experience with Hometown Rentals has been very good. They market and rent and vet the renters and send us reports showing rentals and any maintenance (which we approve beforehand). We've never had a problem, even with those who want to bring their pets. The home has stayed in good shape over five years and has been consistently rented. We started out seeing rentals January March, but that seems to have expanded lately with renters now popping up in December through May. Off season rates are lower, but I wonder if that will change if demand for the non-seasonal months ramps up at some point.

I'm not an expert in real estate, but my sense is that if someone buys a home here to rent expecting to make a pile of cash, they may be disappointed.

Rentals flourish south rot. 44 buy there

There is a legit difference in a qualified service dog vs an emotional support dog. The difference is in CERTIFIED ADA training.

A lot of people are purchasing an online certificate (with just a doctor note) without actual ADA training to be able to call their pet a "service dog". Establishments are entitled to require ACTUAL ADA training certification service dog status. I know this as my daughter had an emotional support service dog (got an online cert) that was allowed to go certain places. Apartments would rent to her and they could stay in some hotels etc but not other places or hotels or apartments etc as her dog was not an ADA trained service dog.

It all depended on the establishment's willingness to allow her dog to be there as a well needed "service" dog. Sometimes my daughter was denied based on the ADA TRAINING status requirement.

Exactly. And, it can get much worse. There is a world of difference between a highly trained, true service animal such as those for the blind, deaf, mobility issues, etc., and the gamut of "emotional support animals" that are all the rage. Plus, those animals are not just dogs. What if your tenant has an emotional support alpaca? Or a pot bellied pig? Or a goat? Better also check up on how to legally evict a tenant. Once someone moves in, and establishes your house as his/her residence, getting them out is a process. That process can be lengthy and expensive.

For me, the potential negatives far outweigh the positives. There are other ways to have your money work for you that do not involve so many potential headaches.

Note that there is a difference between service animals and emotional support animals. But, under the Federal law, there is no ADA certification required for service animals. Here is an excerpt from the Government website, ADA.GOV:

"Q17. Does the ADA require that service animals be certified as service animals?
A. No. Covered entities may not require documentation, such as proof that the animal has been certified, trained, or licensed as a service animal, as a condition for entry.

There are individuals and organizations that sell service animal certification or registration documents online. These documents do not convey any rights under the ADA and the Department of Justice does not recognize them as proof that the dog is a service animal."

I’m not sure where you are getting your information but there are no high rises going up on 501.

Clarifying
 

Yes, they are termed multilevel. Not high rise like NY city lol. The development isn’t breaking warp speed either. It makes me wonder if they are getting some side cash to go slow till the Villages sells their units across the street. I would measure to guess they would be like most in Wildwood at 5 story?

You can ask if it's a service animal and if so, what service(s) it has been trained to do. You cannot ask about what the disability is.

Agree. There are several homes that are now up for sale in my village (close to Brownwood) that were owned by investors (close to the one year mark for new purchase). I was told by one that a landlord could still cover most of the annual costs, but the combination of lots of rentals, high interest rates, and increasing costs are making it very difficult. He made it sound like those that bought during\pre-COVID would do okay as homes were significantly cheaper and those without a mortgage.

I agree that I don't see how a landlord could cover mortgage + insurance + Property Mgr + utilities + CDD fees + maintenance buffer each and every month. If its a nice home in a good location you might break even for a few months, but its the longer slow season that will kill you....

How do you define "the market"? Lots of new building and new rentals in the south. The north has a fixed inventory.

I have two homes in the north that I rent part time. Over the last three years, costs have averaged $18,000 per year, per home. That does not include mortgage interest. It also doesn't include major repairs like roofs and HVAC.

You can easily rent Jan-April for that amount. When you find a good renter, they will return every year. So no worries about dogs, damage, etc. In fact, the people in my homes do minor repairs, clean the windows, maintain the golf cart, etc. The leave the house in better shape than when they moved in. You can find really good people without much trouble.

My neighbors love my renters. I have one January renter, and one March-April renter in each home that return every year.

The downside is you can't use your home during high season.

If you need to make a few thousand dollars more, therein lies the problem. Summer renters are an unknown factor. You'll get families and transient workers in the mix of applicants. Short term renters are a nightmare to manage and a disruption to the neighborhood.

So my conclusion is that it's easy to defer a lot of the cost and come close to breaking even. But don't count on making money, keeping your home in good shape, and keeping the neighbors happy at the same time.

Annual Rental
 

We purchased our home five years ago and did annual rentals until we just moved in this year. So it is not exactly what you are looking for with the partial year rental. We use The Villages Hometown Property Management. You could call them and they should be able to answer most of your questions. We broke about even after the five years, but it did pay for the repairs and improvements that we would have had to pay out of pocket otherwise, like a new HVAC system. The TVHPM website has a listing of available properties you can look at as well. Good luck!

You can, when it involves a potential disabled tenant renting with their animal in a home that you own. That is the exception to the law. You don't have to verify that the animal is a service animal. You MAY verify that the tenant needs one (because he is legally disabled).

Most people who buy here, don't get a mortgage.

It's called consequences. You can build it right into the lease. Something like:

Pursuant to the ADA law about disabled tenants with service animals and emotional support animals, you can have an animal living here. However we, the landlord, must be informed of this by the date of the signing of the lease, and you must provide proof that you actually qualify to have one of these animals.

If we find out that you brought in an animal with you, and you didn't tell us in advance, then we have the right to kick you and your animal out. That would be a violation of the lease. If you have more than one animal, and you are only required due to your disability to have one animal, we can kick you out, or make you ditch the second animal.

Regardless of whether we authorize you to have an animal or not - any damages caused by any animal living in this property will be repaired by OUR choice of contractors, and paid for by you, within a reasonable period of time.

Lastly, as is within our rights as the property owner - should your authorized and permitted service animal cause destruction or disrepair to our property, we retain the right to toss you both out on your collective keisters.

Annual cost to maintain: 15K, break even rent = $1,250 per month annual lease. .
Annual cost to maintain: 20K, break even rent = $1,660 per month annual lease. .
Annual cost to maintain: 25K, break even rent = $2,083 per month annual lease. .

2021 Fair Market Rent in The Villages | RentData.org

however, this is where one of my original question is critical: target market?
very different rates based upon house, location and target market. .
retirees aren't looking for apartments in Wildwood,
working labor isn't looking for houses in TV (in general, there are always exceptions)

basic part of a start up business plan is the target market and expected income statement:

price per unit
volume of units sold
Gross revenue
cost per unit fixed/variable
Gross margin
annual fixed expenses
operating income

I always thought that God had a special blessing for people that choose to be a landlords for whatever reason.

Myself? I could never own to rent and never wanted the responsibility and the grief that goes with it.
I can peacefully sleep through the night without getting a phone call from your renter saying the AC isn't working.

One house for me, and it's the one I live in, thank you very much.

I wish all you a high return on your investment.

38???? that is NOTHING those numbers are wrong btw