NAVIGATION

June 25, 2017
By-the-numbers: Breaking down a rental home deal

Photo:

Real Estate in Florida

By-the-numbers: Breaking down a rental home deal

Amy Keller | 1/30/2013

» A Blackstone rental in Tampa with four bedrooms and two baths was listed for $1,500 a month. Blackstone purchased the home for $120,000.

Initial Purchase 2012

Price of home $120,000
Initial repairs and rehab $15,000
Total investment: $135,000

 

Operations, 2012-17

Annual gross rental @$1,500 a month $18,000
Less vacancy, marketing, upkeep and taxes (-$7,700)
Depreciation (paper loss that translates into tax savings) (-$4,363)
Annual net rental income $10,300
Annual return from rent / Cap rate 8.6%

 

Exit Strategy, 2017

Expected sales price $150,000
Net on principal (sales price minus purchase price plus rehab) $15,000
Net rental income (over five years) $51,500
Tax benefit (over five years, assuming 35% corporate rate) $7,635
Total return over five years $74,135
Total return on equity (before capital gains) 11+% per year

 

*This hypothetical example uses sales data, tax records and rental listing for a four-bedroom, two-bath home that Blackstone purchased in Tampa last year. All other figures are estimates based on conversations with experts in the industry.

Tags: Real Estate

Digital Access

DIRECT DIGITAL ACCESS
Add digital to your current subscription, purchase a single digital issue, or start a new subscription to Florida Trend.

TABLE OF CONTENTS
An overview of the features and articles in this month's issue of Florida Trend.

ACCESS THIS ISSUE »

Florida Business News

Florida Trend Video Pick

Orlando International Airport: TSA showcases screening technology
Orlando International Airport: TSA showcases screening technology

The Transportation Security Administration on Thursday showcased the technology it uses to screen the almost 42 million travelers who pass through Orlando International Airport each year.

Earlier Videos | Viewpoints@FloridaTrend

Ballot Box

Do you support or oppose the U.S. Senate's GOP health care plan?

  • I support it - good start
  • I oppose it - because it doesn't repeal Obamacare enough
  • I oppose it - because it would harm low-income, seniors and more
  • Unsure, need to study it more

See Results

Ballot Box
Subscribe