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Is now the Right Time to Buy Investment Property in Daytona Beach?
The One Percent Rule of Real Estate investment was an old rule of thumb when I was growing up. The rule was quite simple - monthly rent should be one percent or more of the property value. So, a $100,000 home should return $1,000 per month in rent.
Are we close to that in the Daytona Beach Florida real estate market? Yes and no. For multiple unit properties, it is realistic to assume that you could get 1% of the property value in rent per month. For single residential property, it is possible, but very much more difficult. I would estimate that the current rate on single family homes is 0.5 - 0.6% in monthly rental. In other words, a $100,000 property would get about $500-600 per month depending on condition and location.
Does this mean we should stay away from investment property in the Daytona Beach area? Not necessarily. With low interest rates, the monthly payments are lower than previous periods. But even with the low interest rates, you would still be at negative cash-flow. Real property improves as an investment depending on your tax bracket. Rental property is eligible for depreciation deductions and all expenses, such as property tax, maintenance and repairs are deductible. The negative cash flow adds to the already attractive depreciation, property tax and maintenance deductions. I’m not a lawyer or accountant, but here is some good information on The Top Ten Tax Deductions for Landlords.
Investment property can be a tremendous long-term investment for those with high income needing appreciating assets that offer significant tax deductions. There are some tremendous opportunity available for property investors in the Daytona Beach area. There are a good number of homes and condos for sale as well as some great multi-unit properties.
Give me a call at 386-566-7503 or Search Daytona Beach Real Estate at my website. There are multiple search options that you can explore. No registration is required. I will also generate a list of properties to meet your criteria and email them to you.
5 responses so far ↓
1 lake mary fl remax // Feb 29, 2008 at 7:46 am
I agree with your comments on purchasing homes or multiple unit properties.
I do see that some of the homes are offered as a vacation rental and one may want to consider that also. This is a great events community with tourist coming for short and seasonal guest. This offers a great opportunity for rentals also. There are many opportunities in Florida right now and interest rates are low and I think this Spring will prove to be a great time to buy and sell for Florida.
2 Flagler Beach Florida Real Estate // Mar 14, 2008 at 7:12 am
Definately a great time to buy in Daytona Beach. Prices were elevated with the housing boom years past but have been reduced due to many foreclosures and offering a large inventory of houses to choose from. There are also condos to choose from and lets not forget new construction as many developers locally are offering incentives to buy. With interest rates low and many incentives coming out raising loan limits it has never been a better time to buy.
I suggest to meet with a lender and see if financially this is the best time for you and if so find a realtor and start the search. If the lender feels you need a better credit score start working on that and hopefully in two years you will it resolved and give you time to save for a down payment. I do think we will see another hit from the Option ARM and more people foreclose due to being in a loan that they should have never been and unfortunately for them will provide us with another oppotunity as the next are will set for more homes to be available.
For the investor this is a perfect market. It is a tourist area and will alway have people coming to visit and live. Vacation rentals seem to be growing in popularity as opposed to hotels may be another way to invest .
3 Blue Ridge Georgia Cabin Rentals // Mar 17, 2008 at 6:57 am
As the whole country is embracing the chance for investment with the inventory so high due to foreclosures many are thinking outside there communities for this investment.
I would think buying in a tourist area would be a profitable choice as they come for the beaches and you can rent till you choose to sell.
4 Daytona Beach Florida New Homes // Mar 21, 2008 at 7:17 am
This is the time that investor invest in areas where the market is where is at today flooded with foreclosures. This having the best price to buy and holding the property to sell at a later date having the greatest profit.
5 investment property // Mar 26, 2008 at 1:04 am
I agree with your post on purchasing homes and condos as well as great multi-unit properties. This is the correct time for lending money in real estate for Florida. For investors this is most sophisticated place. This is most helpful for tourists who are coming to Florida with less rental charges.
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