tuzanne
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![[*]](./images/xpblue/default_icon.gif) posted on 15/7/2006 at 11:21 AM |
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Thinking of Buying a home to rent
QUESTION - IS IT WORTH ME BUYING A PROPERTY IN ORLANDO
Just a quick guide to how much it costs to buy a home and then recoup the cost to run it.
We found it easy to recoup the actual running and maintenance costs with rentals, such as Management Co. fee, insurance, cleaning costs, website
marketing, pest control, pool maintenance, general repairs, community fees etc, but found it a lot harder to recoup the actual cost of a mortgage.
We increased our UK mortgage by £150,000 to buy a 4 bed/3bath villa on a gated community, with clubhouse facilities, right in the heart of Kissimmee,
just of 192. This was not the cheapest option we had at the time and could have bought a re-sell for £20,000 less, but we really liked this villa,
and the fact that it had a clubhouse.
At the end of December this year we will have been renting out our villa for 3 years. We have worked out the costs to see how much loss we have made
each year, taking into account ALL COSTS and mortgage repayments. They work out as follows:
1st year - £9000
2nd year - £3500
3rd year - £2000
The first year was expensive as you had loads of starting off costs with buying furniture, TV's, BBQ etc for home and off course this was the year of
the hurricanes where we ended up paying out some maintenance repairs we did not expect. Also it was more difficult to rent out during the first year
when there was loads of building work being carried out around us for at least the first 4 months.
The costs the second year reduced considerably and we also stayed at our villa for 2 visits, taking 3 weeks rental out of the tota; available to
rent.
During this year we are not going to stay at our villa due to other committments so were available to rent out during the whole year.
Basically over 3 years owning the villa has cost us £14,500. This is the bad news, and a thing anyone buying a home in Florida has to bear in mind.
It is hard to make a complete profit on buying a home unless you are able to buy it with cash and not pay out for a mortgage.
The good news is that if we sold the villa at todays prices we would get £65,000 more than we paid for it. I know we would have to pay out legal and
realtor costs, but this is still a good return on our initial outlay.
What you have to bear in mind with buying a property is - can you afford to finance the losses while you own it.
We certainly do not regret buying the property as we feel that it is a long term investment, and I have quite enjoyed the work involved.
Good luck anyone out there looking to buy.
Sue
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pbensur
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| posted on 15/7/2006 at 01:57 PM |
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At today's property prices and with the market being what it is at the moment, anybody buying right now will hardly see an increase in their
investment at least not for a VERY long time.
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tuzanne
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| posted on 15/7/2006 at 06:03 PM |
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Yes I think we got in just in time Patty.
Sue
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pbensur
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| posted on 15/7/2006 at 10:05 PM |
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So true, Sue - good information you posted, it's important for prospective buyers to see the facts.
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disneydreamin
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| posted on 16/7/2006 at 07:39 AM |
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This is certainly an interesting report for anyone considering purchasing at the moment. If you have the capital growth in the property then any loss
you funded initially is easier to bear. However as the markets slow down people really do need to consider this carefully and work out how much
interest they are losing on their savings.
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