Cheaper rent than mortgage Tampa area

[Calvin Alardo]

Hi,

I recently bought a townhome in temple terrace Tampa in 2022. I am looking to rent it out but the mortgage including the HOA is 2,000. The market in the area seems pretty competitive with some nice apartments costing around 2,000 for rent so I am considering renting it out for cheaper maybe 1.8/1.9 so it doesn't sit too long on the market. The townhome itself is decent but nothing high end. Hoping to get some insight from some more experienced investors?

[Alacia Mahnken]

Quote from @Calvin Alardo:

Hi,

I recently bought a townhome in temple terrace Tampa in 2022. I am looking to rent it out but the mortgage including the HOA is 2,000. The market in the area seems pretty competitive with some nice apartments costing around 2,000 for rent so I am considering renting it out for cheaper maybe 1.8/1.9 so it doesn't sit too long on the market. The townhome itself is decent but nothing high end. Hoping to get some insight from some more experienced investors?

What is your goal? Are you currently living there and you want to move somewhere else but you can’t sell it?

Negative cash flow is not something I’d be okay with, but I know there are some instances where people are okay with taking a small hit for a big pay off with the appreciation (and hopes that the rent will go up). Unfortunately, you also need to  account for expenditures other than your debt service…I.e. repairs, vacancy, etc. usually people assume these as a percentage into their calculation. It would be a no-go for me. 

Is it more than one bedroom? If so, you could consider renting by the room to increase your gross monthly rent. Just a thought of other ways to make this deal viable. 

[Jorge Vazquez]

Hi Calvin, That sounds like a smart strategy for your townhome in Temple Terrace, which is also where my primary home is located! I've been investing in Tampa for over 20 years and manage around 250 properties, so I'm quite familiar with the market. Pricing slightly below the competition can definitely help avoid lengthy vacancies, especially if it's decent but not top-tier. Your goal should be to break even or come close in the first year, then let inflation work in your favor for rental renewals and building equity. As mortgage rates eventually drop, your cash flow should improve over the long term. Consider highlighting any special features to stand out, and maybe even offer a move-in discount to attract tenants quickly. Feel free to reach out if you need more insights or just want to chat about the market here!

[Calvin Alardo]

Quote from @Alacia Mahnken:

Quote from @Calvin Alardo:

Hi,

I recently bought a townhome in temple terrace Tampa in 2022. I am looking to rent it out but the mortgage including the HOA is 2,000. The market in the area seems pretty competitive with some nice apartments costing around 2,000 for rent so I am considering renting it out for cheaper maybe 1.8/1.9 so it doesn't sit too long on the market. The townhome itself is decent but nothing high end. Hoping to get some insight from some more experienced investors?

What is your goal? Are you currently living there and you want to move somewhere else but you can’t sell it?

Negative cash flow is not something I’d be okay with, but I know there are some instances where people are okay with taking a small hit for a big pay off with the appreciation (and hopes that the rent will go up). Unfortunately, you also need to  account for expenditures other than your debt service…I.e. repairs, vacancy, etc. usually people assume these as a percentage into their calculation. It would be a no-go for me. 

Is it more than one bedroom? If so, you could consider renting by the room to increase your gross monthly rent. Just a thought of other ways to make this deal viable. 

Thank you for your response! 


it’s a 3 bedroom and about a mile away from USF so we considered that but the rooms are different sizes so I didn’t know if that would be a deal breaker for renting to college kids? 

long term I’d simply be okay with owning a few rentals for passive income and retirement. We are actually planning on moving in a couple months so we are trying to decide what to do with the property. I mentioned the temple terrace area because there are plans to expand similar to downtown Tampa. They are going to call it “uptown tampa” so I feel like the equity will increase in the long term that will pay off the negative cash flow I might have in the beginning. 

[Calvin Alardo]

Quote from @Jorge Vazquez:

Hi Calvin, That sounds like a smart strategy for your townhome in Temple Terrace, which is also where my primary home is located! I've been investing in Tampa for over 20 years and manage around 250 properties, so I'm quite familiar with the market. Pricing slightly below the competition can definitely help avoid lengthy vacancies, especially if it's decent but not top-tier. Your goal should be to break even or come close in the first year, then let inflation work in your favor for rental renewals and building equity. As mortgage rates eventually drop, your cash flow should improve over the long term. Consider highlighting any special features to stand out, and maybe even offer a move-in discount to attract tenants quickly. Feel free to reach out if you need more insights or just want to chat about the market here!

Thank you for your response! I am actually familiar with Graystone, you guys are doing great! That’s the thought process I had especially due to the “uptown” development they are having in the area.

[Alacia Mahnken]

Quote from @Calvin Alardo:

Quote from @Alacia Mahnken:

Quote from @Calvin Alardo:

Hi,

I recently bought a townhome in temple terrace Tampa in 2022. I am looking to rent it out but the mortgage including the HOA is 2,000. The market in the area seems pretty competitive with some nice apartments costing around 2,000 for rent so I am considering renting it out for cheaper maybe 1.8/1.9 so it doesn't sit too long on the market. The townhome itself is decent but nothing high end. Hoping to get some insight from some more experienced investors?

What is your goal? Are you currently living there and you want to move somewhere else but you can’t sell it?

Negative cash flow is not something I’d be okay with, but I know there are some instances where people are okay with taking a small hit for a big pay off with the appreciation (and hopes that the rent will go up). Unfortunately, you also need to  account for expenditures other than your debt service…I.e. repairs, vacancy, etc. usually people assume these as a percentage into their calculation. It would be a no-go for me. 

Is it more than one bedroom? If so, you could consider renting by the room to increase your gross monthly rent. Just a thought of other ways to make this deal viable. 

Thank you for your response! 


it’s a 3 bedroom and about a mile away from USF so we considered that but the rooms are different sizes so I didn’t know if that would be a deal breaker for renting to college kids? 

long term I’d simply be okay with owning a few rentals for passive income and retirement. We are actually planning on moving in a couple months so we are trying to decide what to do with the property. I mentioned the temple terrace area because there are plans to expand similar to downtown Tampa. They are going to call it “uptown tampa” so I feel like the equity will increase in the long term that will pay off the negative cash flow I might have ibeginning. 

 I would rent by room for positive cash flow. Rooms don’t have to be the same size. You could adjust the price based on size. 
Tampa is definitely an appreciating market, but why not take both the appreciation and the cash flow? 

[Kelli Bonner]

Quote from @Calvin Alardo:

Quote from @Alacia Mahnken:

Quote from @Calvin Alardo:

Hi,

I recently bought a townhome in temple terrace Tampa in 2022. I am looking to rent it out but the mortgage including the HOA is 2,000. The market in the area seems pretty competitive with some nice apartments costing around 2,000 for rent so I am considering renting it out for cheaper maybe 1.8/1.9 so it doesn't sit too long on the market. The townhome itself is decent but nothing high end. Hoping to get some insight from some more experienced investors?

What is your goal? Are you currently living there and you want to move somewhere else but you can’t sell it?

Negative cash flow is not something I’d be okay with, but I know there are some instances where people are okay with taking a small hit for a big pay off with the appreciation (and hopes that the rent will go up). Unfortunately, you also need to  account for expenditures other than your debt service…I.e. repairs, vacancy, etc. usually people assume these as a percentage into their calculation. It would be a no-go for me. 

Is it more than one bedroom? If so, you could consider renting by the room to increase your gross monthly rent. Just a thought of other ways to make this deal viable. 

Thank you for your response! 


it’s a 3 bedroom and about a mile away from USF so we considered that but the rooms are different sizes so I didn’t know if that would be a deal breaker for renting to college kids? 

long term I’d simply be okay with owning a few rentals for passive income and retirement. We are actually planning on moving in a couple months so we are trying to decide what to do with the property. I mentioned the temple terrace area because there are plans to expand similar to downtown Tampa. They are going to call it “uptown tampa” so I feel like the equity will increase in the long term that will pay off the negative cash flow I might have in the beginning. 

 Hey @Calvin Alardo! Have you considered turning the property into a mid-term rental? I would first confirm that your HOA allows rentals, specifically the terms that they allow, or any other rental restrictions that may need to be followed. Next, if you are comfortable with the numbers a long term rental would provide, keep that as a back up strategy and play with the numbers a mid-term rental in this area would bring. I think you will be pleasantly surprised with the potential cash flow. Traveling nurses and other professionals search this area often with the considerable amount of hospitals, medical facilities and corporations in the surrounding cities.

[Stephen Dispensa]

Calvin, 

Broker/Property Manager here in Tampa. Here's my process for setting rental rates:

1. I pull a report of comparable rentals (usually off of Rentometer, sometimes using MLS data as well)

2. I go through the comps to find the most relevant ones. I want properties of a similar size, shape, and condition.

3. I take the average price per square foot for those best comps and apply it to the subject property. I then factor in any utilities (besides water, sewer, and trash) that we are including if any to come up with a recommended price.

4. I list the property for rent on various sites including Zillow Network, Apartments.com, and Facebook Marketplace. 

If we don't have a tenant within 10 days we lower the price. 

There's really nothing more and nothing less to it. The unfortunate thing I sometimes have to explain to my client is that what they "want" in rent isn't always what the market will bare.

Long term the real goal is to put tenants in place who will respect the home and remain your tenants for a long period of time. You lose far more money on vacancy then you ever will on a lower rental rate.

[Laura Spaulding]

I would rent by the room as well.  Co-living can be quite lucrative when you are tight on profitability due to taxes, insurance, and the mortgage.  

[Bhargav Hirapara]

You also can rent out to USF student. You might have to put some basic furniture, but you could get $2400/month

[Kyle Wheeler]

Hey Calvin,

It sounds like you are ok with negative cash flow every month?

I run into this situation a lot where owners buy a property and then they move out for some reason and want to rent out the property but unfortunately the property was not purchased as an investment and the income will not support the expenses every month.

If I were you, I would look into a different strategy so you are able to have some positive cash flow every month.

Have you thought about furnishing the unit and doing Air BNB, or furnished mid-term rentals?

Another strategy that is gaining more popularity in urban markets is Co-living. Furnishing a home and renting out the rooms to tenants. 

How many bedrooms do you have? You can charge about $1,000 per room for this strategy in your area.

Let me know if you have any questions!