April 28, 2024
A Blackstone rental in Tampa
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.
