I am an investor buying foreclosure properties in low income neighborhoods. What kind of rental returns can I expect in Tampa FL?

Asked by Matt Andrews - Real Estate Investor, Clearwater, FL Wed Feb 17, 2010

Buying mostly 3 and 4 bedroom block homes in north Tampa

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John M. Howe…, , Tampa, FL
Wed Feb 17, 2010
I work with a number of investors acquiring rental homes in low-income neighborhoods such as the 33610 and 33604 zipcodes, where the majority of investor homes are rented under the HUD Section 8 program. 3-4 bedroom block homes are readily available there in the $25-50k range, bought "As-Is". A buyer may typically expect 2500-5000 repairs/improvements to make them rent-ready (as a builder you can probably do it for less), but the HUD-subsidized rental rate is typically around 1050-1200/mo for a 3-bedroom, and 1300-1450/mo for a 4-bedroom. The trick then is to find and keep a good section 8 tenant--which may be easier said than done.

If you're looking more in the Carrollwood area of North Tampa, homes will likely rent in the 1200-1500/mo range (or higher), tenants will not be section 8, and the homes will be bought in the 50-100k range. As a result cash-on-cash rental return % will be lower, but 5-yr upside appreciation potential may be greater.

If you would like to discuss further, give me a call at 813.843.1474 or email at jhowell003@tampabay.rr.com.

John Howell
Licensed Real Estate Consultant
Keller Williams Tampa Central
3 votes
Tony Delgado, Agent, Tampa, FL
Wed Feb 17, 2010
Depends on what area you buy and what price you pay. I've sold places where rents are $800 a month with a purchase price of 45K. No repairs necessary. Not a bad return but that's subjective.
1 vote
A+ Electric, , Tampa, FL
Wed Mar 9, 2011
Not related to Q: but I am a local electrical contractor. Work is slow so I'm approaching house flippers to offer them awesome deals to do their electrical work. Andy 813-312-2764
0 votes
Cynthia Skip…, , Tampa, FL
Tue Feb 23, 2010
I work with an investor, buys many cash houses,refabs them and has section 8 tenants that come with every investment home he sells. Doing it here and in New York. We list and sell them and the buyers can make at least 17 percent on their investment - Moral of the story. Its a tricky business and if you don't have a system or process in place, it could be a money pit.
Have a realtor run some rent rates and/or go on the HUD website to see what voucher amounts are going for on what your buying.
Web Reference:  http://sentryrealtymgt.com
0 votes
Becky Slocum…, Agent, Tampa, FL
Wed Feb 17, 2010
We use a range of .75 to $1.00 per square foot.
Web Reference:  http://Www.YourTampaHome.com
0 votes
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