Is buying a rental property too expensive in Florida right now?

Question

I’ve been wanting to buy a rental property to start building a real estate portfolio but it seems like in my area that the real estate market prices are so high that I won’t be able to make enough cash flow? Anyone have any thoughts on this?

Tyler Gibson · Answer

@Michael Cronk you have 2 options find a lower class property that costs less or look farther inland. more in the center of the state. In orlando everything that is near downtown is expensive unless it is in a high crime area. so I bought in Daytona Beach in a lower class property.

Tim Bradley · Answer

@Michael Cronk Down town Orlando is hard to get cash flow with only 20% down. There are for sure places you can make it work within a 1-1.5hr radius (and I’m sure less) of DT. I just closed on a place in Summerville that cash flows $300+ / month. It was a new build too. I just asked my realtor where the investors are going and he knew immediately. I can send you his contact info if you want. I have used him for my last 3 rentals.

Tim Bradley · Answer

@Tchaka Owen if you’re going the traditional route and not forcing appreciation through rehab or finding some world class amazing deal and pull all your money out after close then cash flowing with 20% down is a good target.  Of course having no money in and still cash flowing is even better.

Michael Cronk · Answer

@Tchaka Owen @Tim Bradley @Tyler Gibson

Thank you all for your input, I’m still really new to real estate investing and still learning. I am looking for a rental with positive cash flow. Just trying to get some skin in the game!

Tchaka Owen · Answer

I'm not saying it's a bad target, you can put 50% down if you want. What i'm saying is that you must account for the opportunity cost of the down payment (whatever the percentage). To put more down in order to get positive cash flow is deceptive.

Tchaka Owen · Answer

@Michael Cronk - Vero is not one of the cost-prohibitive areas of FL. Did deeper and you'll find deals.

@Tim Bradley - If you have to put down money to cash flow positive, it's not truly positive. Ie, there's an opportunity cost to the money being put down. All astute investors should factor that into calculations.

Michael Cronk · Answer

@Tim Bradley that would be great! I would really appreciate if you did send me his contact information. Thank you so much!

Is buying a rental property too expensive in Florida right now?

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