There are rental properties that perform well and those that underperform for various reasons. There are many factors that cause a property to earn a higher return on the original investment. The location of the property, monthly rent received and number of months a property is rented each year are a few of the factors that are important to achieve higher earnings. When opportunities are presented to you as an investor, knowing what properties to take advantage of and which ones to avoid can help you capitalize on the best sources to grow your investment income.
Rental Properties with Historically High ROI
Properties along the coast can be argued as being some of the most successful rental properties. Many investors that have the opportunity to purchase coastal rental properties do so to take advantage of the tourism population that is usually year round. Many residents that arrive to tourist destinations along the coast make plans to arrive during specific time periods. This includes college students, retirees and family vacations. The Florida economy is partly supported by tourism making rental properties along the coast a big advantage to investors searching for a higher annual income.
Lakefront properties are always in demand for many reasons. People that move to Florida for employment reasons or to retire appreciate properties that have lake access. Florida has many different lakes and multiple properties on lakefronts that are rented by people from all walks of life. The easy access to the lake often includes boat ramps that are useful for fishing, skiing and other aquatic entertainment and recreation. The peaceful surroundings that water offers is one of the things that renters search for when making a decision to occupy available properties. Many of the lakefront communities are family-friendly and are attractive to families that want to live on one of the many Florida lakes.
Ways that ROI Can Be Improved for Rental Properties
A property does not have to be near water to achieve a higher than average return on your investment. There are many things that you can do as a real estate investor to increase your profits. One way is to not spend your own time managing properties. The time inestment, travel expenses, disputes and legal fees that could arise can easily eat away at any profits that you earn from rental income. A good property management company knows how to maximize your investment dollars to earn more money.
A periodic review of the monthly rent is just one indicator used to help increase the profits that you receive from a Florida rental property. Renting below the market average for the location where your property is located will cause you to earn less money. Property managers that know the local economy can help you determine the rent that should be charged to tenants. A reduction in taxes will allow you to keep more of your earned income. Getting expert help from a CPA or accountant that has current real estate investor clients will help you maximize your ROI on any rental property.