Jim Esposito
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Scenario #5
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Fort Lauderdale, Florida, Real Estate Investment, Vacation Rental
Scenario #5
$85,000 in Projected Annual Income
On a One-Time Investment of $127,000
How Is That Even Possible?
2-Bedroom Condo, Walk to Beach
Turnkey, No Repairs or Remodel Required
Furnished, Reduced Outfitting Cost
Very few Condominiums in South Florida allow short term Vacation Rentals.
We do know of some, however, and keep an eye on those buildings.
Considering a Condo, of course, the owner must pay Monthly Maintenance. The Good News is that in most Condominiums the largest component of that Monthly Maintenance is typically "exterior" Insurance. "Interior" insurance is usually optional, less expensive. Additionlly, Condo Monthlies will almost certainly include Water and Trash, Pool Maintenance and Landscaping.
Contact us if you are interested in watching those properties. We set up a Saved Search with Automatic Alerts which will send you an email when a unit in one of those buildings comes on the market.
We've put together some "Ball Park" Scenarios using sample Properties, consulting with Rene and Matty from iTrip Fort Lauderdale about projected rent and occupancy rate. Hopefully, these will assist you in getting a handle on the numbers.
Please be aware these are ball park estimates based upon our "best guess" professional opinion, may not necessarily be based upon the "Industry Standard" 60% average annual rental rate, but what we estimate, which will differ from property to property. In addition, there is no way of knowing exactly what any projected property might require in repairs, renovation or design to maximize your investment. We will assist you, getting the best numbers possible through your due diligence period, however, the actual projections for any specific property will be up to you to determine.
Estimated Income Property Financials
Purchase |
400,000 |
Estimated Outfit |
7,000 |
Total Investment |
407,000 |
Estimated Gross (Estimated 40 Weeks @ 4,000 per) |
160,000 |
iTrip Management Fee (25%) |
40,000 |
Effective Gross |
120,000 |
Estimated Property Expenses
Property Taxes |
7,000 |
Monthly Maintenance (12 Months $460 per) |
5,520 |
Insurance (Estimated) |
1,000 |
Electric (Est. 300 per month) |
3,600 |
Estimated Expenses |
18,120 |
Estimated NOI |
101,880 |
Estimated Cash on Cash Return
Projections above are for Cash Deal. Obviously. We don't know what down payment you plan to post, what your interest rate may be. Depends upon the loan you might qualify for. For an investment property you might be required to put at least 30% Down. In this example that would be $120,000. An Interest Rate of 6% on the balance of $280,000 adds up to $16,800, lowers the estimated NOI to $85,080 per annum. An estimated "Cash on Cash Return" of 67%, versus a Cap Rate of 25%.
Cash Invested (30% Down plus Outfitting) |
127,000 |
Effective Gross |
120,000 |
Estimated Expenses |
18,120 |
Debt Service (6.0% Interest on $280,000) |
16,800 |
Estimated NOI |
85,080 |
Don't Forget to Add In Property Appreciation
In 2021 Average Sale Price for a SFR in Fort Lauderdale
went up 36.2%
Median Price increased 20%
And 19% in 2020
S&P Dow Jones Home Price Index
South Florida (Red) versus United States (Blue) from 1988 thru 2022
Shaded areas indicate U.S. recessions
See 2021 (and 2020 Year-End
Real Estate Reports
for Fort Lauderdale, Broward County & The State
from Florida Association of Realtors
Fine Print
This is a "Sample" Scenario. How much you can actually get in rent for any property will depend upon the location, the features (pool, hot tub, waterfront, etc.) and the condition of the property, and can only be estimated at this point. There are a number of resources you can utilize to determine your own estimates, and we suggest you do so before entering into any contract.
In addition, there is no way of knowing exactly what any projected property might require in repairs, renovation or design to maximize your investment. The ulltimate decision of how much money to put into any particular property is up to you, of course, but that may affect how much rent you can receive.
The "Tourist Taxes" for the State of Florida (6%), Broward County (6%), and the Tourist (1%) are not included in these numbers because they are collected by the Booking Website when the property is Booked. As part of their services, iTrip pays these taxes to the appropriate entity.
Everything You Always Wanted to Know About
Investing in (Owning & Renting Out)
Short Term Vacation Rentals in Fort Lauderdale
But Didn't Know Who to Ask
See "Sample Scenario" Properties
Outlining Projected Expenses, Revnues and Returns
Would You Like to Invest in Vacation Rentals?
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