To Buy A Rental Property
Deciding Factors for Buying Rental Home in Florida
The Florida beaches are the ideal destination for tourists. From windsurfing, bicycling, and fishing to snorkeling, boating, swimming and sunbathing, Florida is the blend of beauty soaked in the sun surrounded by a growing real estate market. Disney World, Sea World, Universal Studios in Orlando, to the excitement of South Beach in Miami, to the white sand beaches of the Gulf of Mexico, and so many other attractions make Florida one of the ever growing tourism markets across the globe. To bask in the magnificence of such an amazing destination, investing in property has made a strong comeback since the “Great Recession”. The Florida real estate market is ideal for 1st-time buyers and savvy investors alike, as they once again see Florida as a hot investment vehicle.
Advantages of Buying Rentals
The most prized and amazing vacation destination, Florida is an ocean’s paradise and has best beaches of the world. With the pristine beaches, close proximity to the beautiful shoreline and tropical climate makes the state of Florida, one of best for buying rentals. The vacationing crowd can be a good source of your living. So, opting for your first rental for a longer term can be a wise decision on your part.
- Investing- When you are paying rent to your landlord for the rental, all monetary benefits are received just by him. But, when you make an investment towards your first rental, the money spent on its improvement or other areas to make it worth living, directly benefits you through equity or appreciation of the asset. Your house must always be a long-term investment and it is sure to give you guaranteed and better returns.
- Tax benefits- Are you aware that your mortgage loan interest amount can be deducted from your taxable income? Similarly, real estate taxes can also be deducted. If you buy a rental property, you may also qualify for various tax credit. These and other deductions can add up to thousands of dollars in savings. Consult with your tax advisor regarding your specific situation.
- Freedom- The pleasure and pride of owning your home is a huge motivating factor for buyers. It does not just give you monetary freedom but also makes you free from the obligation of paying your landlord each month with nothing to show for it when you move out. By investing in a rental property are putting yourself in a better financial position.
- Obtain the Break Even Amount when renting- Calculate your break-even point by adding up your monthly expenses such as mortgage interest, maintenance cost, advertising and promotional costs, local taxes, etc. for your rental investment and use this as a guide for the monthly rent that YOU charge.
Disadvantages of Buying Rentals
- Cost- Along with the preliminary mortgage deposit, furnishing your rental can also dig a hole in your pocket. To maintain the market value of the property, it is essential to furnish the house with every amenity that the tourist looks for.
- Location- The position of your rental is of great importance. You need to consider the right area when you are investing for a longer term on a rental. If your location is not right you may not get the renters you desire.
- Maintenance- Any property needs to be maintained year around even when it is vacant.
- Distance- You may have to cover a long distance to take care of your second home which is time-consuming. Buying rental property in close d+riving distance to your primary home can save you a significant amount of time.
Ascertain the price appreciation of the target rental property you wish to invest in and try to get a rough idea of the income that the intended property can generate to make a great investment on your first rental property.