NAVIGATION

July 28, 2016
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

'Small astronaut' gets opportunity of a lifetime at KSC
'Small astronaut' gets opportunity of a lifetime at KSC

Four-year-old "small astronaut" Harrison Sheldon is the child behind a series of photos by his father, Aaron Sheldon, that have garnered national attention.

Earlier Videos | Viewpoints@FloridaTrend

Ballot Box

Florida regulators have approved new water quality standards that they say will give them more control over chemicals in our water supply. But - the new standards allow more cancer-causing toxins into water systems. Your opinion?

  • I oppose the new water standards
  • Unsure
  • I support the new water standards

See Results

Ballot Box
Subscribe