Rentals as retirement income
 

Hey all-

We're looking at TV not only as a place to live, but also as a source of retirement income.

If I sell my other real estate, which is in California and not easily managed from Florida, I'll have roughly $1M to invest.

We were considering buying, say, four $250k homes and leasing them on annual leases only, and living on the income. If they would each produce $1,500/month net, that would provide enough income for us. And, doing a 1031 exchange, real estate into real estate, would allow me to defer taxes.

We're just not sure what the demand is for annual-lease property in TV. Any thoughts on this? Any alternate suggestions?

Thanks-

Dave

I think annual rentals are rare but possible. Another thing to consider would be going the route of buying (approximate price) 8 - $125,000 patio villas and renting them for 6 month out of the year for $2000 a month. The maintenance and overhead would be less on the villas. Just something to think about.

What I would do differently from your (o.p.) plan is to buy less expensive, smaller homes, in the price range of $180,000 to $210,000 (courtyard villas or ranch/cottage homes).

Then the rent is affordable to more people, the property taxes and bond, air conditioning, landscaping costs, etc are lower.

In the $250,000 price range, it's a bigger, more expensive home than many singles or couples want/need/can afford.

Also, if the wheels would totally fall off the economy (God forbid), it would be easier to sell a less expensive home than a designer or premier.

would you provide the needed pest control, yard service and power-washing of the homes? These should be considered I would think...also internet and cable or dish for t.v.'s?

RE Investment in The Villages
 

Dave:
If you paid cash for those four houses you likely could get close to what you're looking for. Might be tough finding four houses to do a 1031 as a package. Or you can look at houses outside The Villages and pick them up at a discount. I picked up four houses in the last seven months. There are still a lot of REOs, short sales and what I call foreclosure defense cases to be had here in Florida. The volume is starting to drop off compared to previous years but there is still plenty for all that want them.
Another option is to put your money with a Private Money Lender (PML) who works with investors like myself. They are paying 6%-8% most times and charging 14%-15% plus points to investors.
Another option is to become a PML yourself. I pay 10% to PMLs and provide them with an appraisal and a contractors estimate of repairs for every deal they fund. The limit to how much I can borrow is generally 70% of the retail price after repairs so you know I have some skin in the game as well. The PML money is secured by a mortgage on the real estate.
So you have lots of real estate options for your money. The question comes down to do you want to be a landlord into your golden years or be the bank?

If you would like to discuss further please call me
Carl Mullin
CAP Real Estate, LLC
352-446-8559

I can tell you if I could have found a really nice rental that included everything except utilities for $1500/month in The Villages on a long term basis I would have been all over that. I was hell bent on never "buying" my home again because of the volatility we saw over the past years, but when I saw how expensive rentals are in The Villages and how easy it is to sell a property here I had a change of heart. Not sure what the demand would be and the expenses to keep a house running in TV are quite high. Lawn, pest, cable, internet, power washing, yard maintenance, amenity fees, bonds, etc. The good news is electric and water are pretty reasonable.

I think your net is high when you factor in all the costs. I would think your net would be about $6,000 a year. There is definitely demand for year leases which I think are best because the people in longer leases tend to take better care of properties.

look at the rental sites for long term and see what is rented and not rented might help

Question: We are going to be putting our house in TV up for rent shortly on a monthly basis starting in October. We just picked up our golf cart and was discussing the rental with someone who suggested we do not just 'throw in" the golf cart on the rental due to liability issues. He suggested deeding it to the renter on a temp basis......I have no idea what he meant by this. Can anyone fill us in that has experience with this? Suggestions? Any info on the ins and outs of renting would be greatly appreciated1

Thank You

Check with your insurance agent how your particular policy works. My understanding is if a renter uses your cart and have an issue you are not covered.

Amen

I would live here for awhile before I jumped into anything and keep your finger on the pulse.

I had a conversation with a guy who had/has 26 rentals in TV. Many of them, not all, were in the Historical area of TV. This was a couple years ago. I put my pencil to a couple of rentals and found it hard to be profitable and potential for a lot of hassle. One thing to remember, if you rent it out for less than six months there is sales tax to pay. I would think about it "long and hard" with some professional advise before I invested a million in rentals.

I agree with others that that might be an unrealistic net amount. There would also be an initial cost of $7-8 for each house to completely furnish them, from beds and couches down to the salt and pepper shakers.

You could do long term unfurnished rentals, but that market is smaller and you'd be getting $600-$1000 less per month once you average out the high/low season rents.

i would start with one and then think about the rest....if i had one mil i would do something else...most rent to offset till they move.