Many of my customers who are seeking real estate here for an investment, ask me for a rental history for the properties they are considering. A reasonable request, right? Of course it is, and I am happy to do my best to get that for them. However, there are some problems inherent with this approach that I must point out:
1. Many owners spend a good bit of time on the island themselves, and typically in the winter, when rentals are at their peak. So this reduces and distorts the picture.
2. There are so many different ways to advertise a rental; and some folks do that well, and some do not. Some use a professional villa rental company, and some do not. So advertising makes a HUGE difference in your rental income.
3. Other factors can impact the rental income – such as the photography! If the property is nicely staged and professionally photographed, it will make a significant difference in the number of rentals, and even in the rental price.
4. Property expenses can vary widely. It is important to find good people who charge a reasonable amount. We can provide you with names and numbers of vendors in a wide variety of categories to assist with your property maintenance so that you are maximizing the profit from each rental.
Really, the most important thing to do when considering an investment property is to determine how rentable you think it will be (pool, sea view, and proximity to amenities are three important factors), determine what upgrades/updates will be needed and the cost to photograph the property, estimate the weekly rental amount you could get, determine a reasonable amount to spend for expenses, and project the income from there. Good rules of thumb are as follows:
Monthly Expenses for Condos:
Your condo fee will typically include cable, WIFI, garbage pickup, monthly pest control, and common area maintenance. You’ll need to pay for maid service ($125 – $200 per cleaning), airport pickup ($100 per rental), commission on rental (18 – 25%), and perhaps property management (sometimes that is included in your commission); liability insurance: $100 – $200 per month; Advertising: $200 – $300 per month.
Monthly Expenses for Homes:
Pool maintenance: $200 – $250 per month; Lawn maintenance: $150 – $300 per month; maid service: $150 – $250 per cleaning; airport pickup ($100 per rental), commission on rental (18 – 25%), and perhaps property management (sometimes that is included in your commission); garbage pickup $60 per month; pest control: $60 per month; cable & WIFI: $130 – $150 per month; hurricane insurance: $500 – $1500 per month; liability insurance: $100 – $200 per month; Advertising: $200 – $300 per month.
Monthly Income for Condos:
Of course your income will depend on how nice your unit is and where it is located. We price rentals here by the season (High season typically Dec. 15 – April 15; Low season typically April 16 – Dec. 14) and number of guests.
You can expect to get a MINIMUM of $100 per night for a condo, and $200 – $400 per night is more like it for a nice unit. If you market aggressively, you can expect to rent it out about 12 – 16 weeks in the winter, and about the same number of weeks in summer.
Monthly Income for Homes:
Your income will depend on how nice your home is and where it is located. We price rentals here by the season (High season typically Dec. 15 – April 15; Low season typically April 16 – Dec. 14) and number of guests (bedrooms).
You can expect to get a MINIMUM of $200 per night for a home with a view and pool, and $400 – $800 per night is more like it for a nice home. If you market aggressively, you can expect to rent it out about 12 – 16 weeks in the winter, and about the same number of weeks in summer.
Bottom Line
Your rentals will likely cover the cost of owning your condo or home; fees, maid service, insurance, etc., but mostly likely will NOT cover fees, expenses AND debt service (mortgage).
So pick the unit/home that YOU think would rent the best, fix it up nice, stage and have it photographed, and hire a professional vacation rental company to handle this for you – and then just focus on enjoying your place in paradise when it’s NOT rented!