Simply answered with a cash buyer you can break even and possible have a bit of a cash flow.
Going the short term route would make it harder.
My investors buy a single family home and rent it by the year and come up with positive cash flows.
Single family homes are much cheaper to operate and in 3-5 years will most likely increase in value better than vacation homes.
Give me a call and we can go over a few examples.
It all depends on what your buying budget is.
There has been some very good advice given to this question so far.
Keep it up Trulia pros.

Robert

Hi Darren

You are correct in saying that "you could break even if you pick a well priced property for a cash sale in the right area." - but there are no guarantees and I cannot over-stress how important it is for you to do your research before making any commitment. Our experience is that the most satisfied clients are those who manage their property as a business and in particular do their own marketing - in other words, don't rely on management company efforts.

Please read through the notes on our web site (click below on Web Reference) and just let us know if we can help further.

Colin

Hi Darren,

I’m posting this as a general consensus for other buyers that might also read this thread.

The return on income depends highly on the location of the community, the amenities within, and the property itself. Some properties will generate enough income to break even of all expenses even while counting a mortgage if the down payment made was at least 25 to 30 percent and if you do owner bookings. (If you’ll like to see real life examples of this then contact me as I have a couple that I could show you).

A six bedroom home in the community of Windsor Hills could generate between $45,000 to $60,000 dollars a year gross, so if you factor the expenses even while counting the mortgage it will break even. If you don’t have to pay a mortgage because you bought cash then you’ll have an earning potential with such a property. I have real life examples of this if anyone is interested, but this is based on you getting owner bookings.

If you have to rely on bookings provided by the management company then your earning potential decreases because you’ll be paying a commission for these bookings. Also, a property in a different community, or even in the same community but rented by a less experienced owner, will not generate those figures.

So back to the question, “is this because of a code of conduct or alike or do very few people actually make an income profit each year?”

There’s no code of conduct that says we have to all tell you that at the most you’ll break even and yes very few people make an income each year, so we have to tell you what the average person might make.

If you don’t hold a mortgage, buy the right property at the right price in the right community, and do owner’s bookings, you’ll generate more income and thus get pass that break even ratio. But, if you rely on the management company to rent it for you, then at the most it will likely break even.

Best Regards and Good Luck!
---
Carlos German
When in doubt, talk to a Realtor who understands your goals.
Am I that person for you? There's only one way to find out…
Contact me today! 407 744 7190 or http:// http://www.rebycarlos.com

Hello Darren,

Letting property in the U.S. is very different than in the U.K.
For a short term rental home you will have to pay the utilities, homeowners association dues, etc.

If you pay cash for your Holiday home, you will have less out of pocket expenses each month.
Your real profit will be, as long as you have kept the home in good shape, when you sell it in a few years hopefully when the market is on a high note.

If you have a home in mind, I can send you an return on investment spreadsheet giving you an estimate of monthly costs.

I am glad to see you researching as much as you can before you buy your Holiday home.

First of all, we are REALTORS, not realators. If you really want to buy something that cash flows, call me now. This is the time when serious investors buy real estate in California.

Darren:

Being that you are from UK and in 34747 it will be easy to presume you are thinking of short-term rentals for investing. Because those are rented on a weekly basis most commonly, they tend to bring in more income than a monthly rental. So the real question is, what are the maintenance expences?

What always applies, no matter the type of rental is the price you pay for the property initially. Work with an agent that gets to know exactly what you want and can inform you as soon as it becomes available. Most properties in the Disney area with 4 or more bedrooms in the $250 or less range is a viable option for short term... specially if you are able to give the prefered 20% down at closing.

Well, hope this info helped a little.
If you would like to get by e-mail samples of homes in the above categories just drop me a note.

Tony.Vega@ColdwellBanker.com

Its very difficult to break even purchasing single family homes for rent, and get a reasonable "cash on cash" return on your investment. To do so, you really need the price to be about 10 times annual rent, which is hard to get even in this soft market. In this country there are big tax incentives for home ownership (capital gains breaks, mortgage interest deduction), which inflates the prices of residential units for home ownership.

Darren

My Investors will not purchase if the property does not meet their pre-determined % ROI. They do not buy if it merely breaks even. We keep looking until the "figures work"

Darren,

It depends on the type of property, location and what you paid for it. Unfortunately your question is too general as there are many variables which can influence your profit margin.

Phil