In general terms, you can find condos that give you about a 10% gross return on investment. After deducting property taxes, utilities, condo fees and rental fees, you might be able to find properties that yield 4-5% net return (depending on your personal tax situation) on a cash investment. Many condos on Sanibel and Captiva are priced at levels comparable to the late 1990's!!! But prices are going up again though, with an ever shrinking inventory. In addition to your rental income, real estate appreciation on Sanibel has historically outperformed the S&P500 and appreciation certainly has come into play again. We have started a new UP-SLOPE, and this will probably continue for years to come. On a final remark, short sales and bank-owned properties on Sanibel and Captiva are few and far between these days. In order to get a great deal, you need to be ready to move quick and work with an agent that will be able to identify prime properties the minute they hit the market.
To answer William's question, how can you optimize your rental income. You have to be active on-line. Make sure your properties are prominently displayed on websites like homeaway.com and vrbo.com Use GREAT looking pictures, one picture tells more than 1,000 words Make sure your condo appeals to most people, so your condo needs to have all modern conveniences people are looking for like flat screen TVs, modern kitchen and bathrooms and nice looking furniture. The 1980's pastel colored wicker couches don't work anymore in 2013! That sound logical, yet you'll be amazed how many of those I still see almost every day.... as well as bulky old TVs with VHS players (I'm not making this up). If you can't find a condo in prime condition, you might want to think about buying a condo in a great rental complex like Pointe Santo that needs remodeling. There are MANY tradesmen locally that specialize in remodeling. A full remodel of an average 2/2 condo on Sanibel will run about $80,000. With full remodel I mean everything new from the drywalls in. So new kitchen, new bathroooms, new appliances, new flooring and fresh paint. Add some crown molding, get rid of the drop-down kitchen ceiling. If you're up for this, I personally think that you will have a better chance of finding what you're looking for at a lower overall cost.