How to make more money from Orlando investment property with DIY rentals
Its rental arithmetic! I have found with my real estate firm Florida Countryside www.floridacountryside.com that Orlando investment property, “buy to let buyers” will initially employ a property management firm to both maintain and rent their home, although many will later progress to finding their own tenants, for this is how they can achieve the best financial return!Ever since I first got involved with Orlando real estate sales to Brits back in the 80’s, I have been an advocate for “DIY rentals” and here I will explain why.Whilst it is almost a fundamental requirement for an absent homeowner to employ the services of a good property management firm to provide regular home maintenance, the rental booking issue is a very different matter. There are many management firms offering exclusive maintenance preferring to leave the job of finding renters to an owner, whereas others are more keen to promote their booking service, for this is where the company can make the most money!Several firms have contracts that allow a “mix and match” service to operate, which in effect allows either the company or owner to find the renter. When the owner finds the tenant without any help from the management company then considerable cost savings can be achieved!When an owner takes exclusive control of finding the tenants a greater financial control is enjoyed plus there exists an opportunity to personally assess the suitability of any future tenant.With over 700-property management firms currently operating in the greater Orlando region alone, competition is fierce and this has led to some unscrupulous management firms making wild claims and promises about the amount of potential rental income they can readily achieve for clients.Another marketing ploy to watch out for is the so called “rental guarantee!”. From my experience rarely is there a sound rental guarantees that does not either have some kind of a catch or downside.Even when such a proposals is indeed genuine, there is a downside for most will only offer a rental sum below the market rate and why settle for less than your home is worth? When a somewhat high rental projection is offered I strongly suggest that the proposal is carefully reviewed and all paperwork is properly scrutinised, for I have never found there to be a “free lunch ”.Consider the following scenario, for there is probably an offer like this currently being offered by someone;A management firm is offering a rental guarantee that looks like it is “too good to be true”.It offers to pay the owner a sum that covers absolutely every outgoing and yet although the price of the home may be a little higher than normal, it is not outrageously high!By all accounts it appears as though the developer may be willing to suffer a financial loss and all of the risk is weighed in their favour. Ask yourself why?I do not know of any reputable builder or developer that would do this unless that is their business is in some kind of financial crisis and les face it, such problems are often kept extremely quiet!Take your time to seriously consider a proposed deal and try hard to find any hidden catch!Next is “the leaseback offer”; this is when an owner wishes to rent back the home from the buyer and normally a written contract that is duly aligned to the purchase contract is provided.In my opinion this is the best kind of purchase option, albeit again watch out for offers involving multiple homes!Often the best proposals will only apply to a few selected new homes, such as when a builder wants to obtain future model /show homes.In this circumstance I still recommend careful scrutiny and in particular check out the competition to ensure that the sales price is realistic, for it is possible that the price may just have been inflated to cover the attractive rent that is being offered!Most property management firms are good at their job and I do not want to give the impression that all are untrustworthy or are trying to rip you off.However in my opinion NONE should EVER be totally relied upon to make any owner considerable sums of money!They will all look after themselves first, a tour operator or holiday company second and a private owner last. They will call it “enterprise and commercialism” and there should be no mistake.Besides the potential pitfalls of solely relying on a management firm to find you rentals there is a high cost.Property management firms charge sums that normally range between 10
Tell others about
this page:
Comments? Questions? Email Here