Setting the Rent for Your Florida Real Estate Investment

Posted by on Mar 11, 2016 in Blog - Commercial Investment Properties | 0 comments

Setting the Rent for Your Florida Real Estate Investment

As we help you look for investment property in and around Central Florida you may happen upon what looks like the perfect building as it is in immaculate condition and at a great listing price. One thing you always have to keep in mind in the back of your head though is that there’s one thing that makes money on investment properties – rent.

Whether it’s a commercial or a residential building, finding tenants is the top priority for your new property. Positive cash flow from rent helps to fund building repairs, maintenance, taxes, and other fees and whatever is left becomes your take. It’s obvious then that the more money that comes in (rent) and the less that goes out (expenses) becomes a higher amount for the investor (profit).lease

Investors have to evaluate income potential when comparing properties. Income potential is based on how much rent you can bring in – so how is that number determined?

 

 

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The biggest factor that determines what you can feasibly charge in rent is the location and nearby comparisons. You can justify charging more for an apartment with a great view but will have to make exceptions for a building next to the airport. We’ll have to evaluate what your neighbors are charging depending on where you decide to buy and come up with a number that is both competitive but also profit-inducing.

The last thing to remember when calculating rent is that it’s based solely on having tenants and filling up the property. In an apartment building for example, charging $200 less per month “loses” you $2400 per year. If that lower fee though results in even one otherwise un-rented apartment being occupied at $800 per month that’s $9,600 you wouldn’t have had for an overall net of +$7,200 ($9,600-$2,400). Calculate that net times three rented out apartments ($21,600) and you see the importance in creating competitive pricing.

 

Tampa Hillsborough Commercial Property Management

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