Courtesy of our friends over at Rent Jungle, we have a clearer view of what the rental prices are for 1 and 2 bedroom rental properties in Jacksonville:
This is helpful data for potential investors looking at buying additional units, but it’s also helpful for owners thinking about renting out their property and who want to run the numbers.
As we’ve said in previous posts, when looking at the potential ROI for a rental property, there are many more factors to consider than just the market rental rate and your expenses (mortgage, HOA, taxes, insurance.)
The most important consideration for any rental purchase is always going to be: likely vacancy time.
If your property should rent for $1200/month (market rate) and you assume you’ll be bringing in $14,400/year as a result, you need to change the formula! What you should be factoring in is 30-45 days of vacancy time before it gets rented, and then probably 20-30 days vacancy time between tenants.
Don’t forget about turnover expenses, too! Things like paint touch up, lock changes and minor upkeep are all things that are generally a landlord responsibility to pay for. Tenants can be charged for items that exceed “normal wear and tear”, but not for routine maintenance and upkeep of the property.
If you’re considering hiring a Jacksonville property management company, that factors into the expense equation as well. Most companies charge between 8% and 12% of the monthly rent, plus most companies charge the first full month’s rent to place tenants. While most reputable property management companies will actually reduce your vacancy time and find better tenants and reduce your cost of expenses (all of which offsets their cost to you), the ones that charge a tenant placement fee will certainly set you back. You’ll have to decide what your time is worth!
Given the complexities that soon begin to emerge when looking at the full picture, it becomes clear quickly that where you buy your rental property, how many bedrooms it has, the condition of the unit and even the time of year can all play a significant role in your ultimate ROI with the property.