Understand that that's gross yield. That's before debt service, taxes, insurance, HOA fees, vacancy expenses, maintenance, repairs and allowance for further rental/prop value declines. Suddenly it's not quite the windfall you might think it is.
Comps based on square footage in this area (walking distance to the beach) are $2000-2500/mo. Add in the efficiencies/guest quarters each property has, and you have $3k.
Vista 92083 there are a few properties. You'll need to renovate a little, but they are around 1%... 92078 and 92069 (San Marcos) has a few that are slightly below 1%. You have to look for the segments of the market that were the predatory subprime breeding ground.
Taxes, insurance, and maintenance are a killer in FL. Post an example of the actual cashflow on just 1 of your 2%+ properties. Show the expense side so we can compare apples to apples (debt service, taxes, insurance, etc. etc.)...
Thanks for the tip. ZipRealty has it listed for $135, including water. Renting is allowed by the HOA. [Edit: Just looked at a second source, listed as $170 which is more realistic.] I rotate between Illinois and Florida. I'm always shocked at how affordable the housing prices is when I come to visit.
I know people who have rental properties. The biggest struggle is the renters. Will they pay on time? Will they pay at all? Are they going to stay there for a year and cause just as much damage to the place as they paid in rent? About 10 years ago, I rented an apartment and there were a bunch of young people next door. They partied hard. They knocked down a wall in the apartment without asking the landlord. They painted the place their own colors. They did drugs. They were fun people. When they moved out, I ran into the landlord who said that he had to hire a contractor and pay them $12000 to fix the apartment. The people I know who rent properties are constantly on the door-steps of their tenants. One of the people I know delayed filing actions in court believing that it might worsen the problem. Well, without any actions filed, the problem only got worse. Then there are the tenants who demand their rights and want everything in the place up to code exactly and wont hesitate at complaining to some government agency or taking you to court. From what I have observed, being a landlord sucks unless you have good tenants. In my life experiences, I dont think you can tell who will screw you and who wont screw you. People are all the same and, in the end, you cant trust them or make them do what you want them to do....
OK, here you go. Purchase price $150k. 20% down, $130k financed 30 years @ 5.5%. Monthly expenses: P&I: $740.00 Taxes: $600 (currently appealing ) Insurance: $400 Vacancy (10% of monthly rent): $300 Repairs/maintenance (1% of purchase price/12): $125 Total current monthly expenses: $2165/mo. Current rent: $2700/mo (down from $2900 at time of purchase) Positive cash flow: $535/mo.