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Sample Profit & Loss
Estimator
This is a sample of a $300,000 purchase at
20% down. Decreasing down payment will make the number of rentals required to
"breakeven" to be higher. This does not take into account the tax benefits of
second home ownership to US buyers.
 Recently several
people have been asking the same question. Will I breakeven with short term
rental income? The simple answer to this is that it depends on you....
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The chances of breakeven dramatically increase with the
size of your down payment. With the advent of rapidly increasing property
prices, (something we all want) the days of 10% down allowing you to break-even
your first year are rapidly disappearing.
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The second factor entirely under the owners control is how
much effort you want to put into generating bookings. As many of my clients
know, I will help you generate bookings as much as I can, and a good management
company is certainly a good start, but please augment these bookings with a few
weeks of your own. If you have followed my advice you will have a gorgeous
property minutes from Disney. How many families do you know who would want to
rent your property?
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Do not assume that your property will be booked for the first 2
months, and budget accordingly. Your property will have to be furnished, and
marketed, so if you do generate income from the very start that's great, but do
not expect it.
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Please don't cut corners with the furniture package. I am going
to repeat this, because I tell everyone this and some people do not listen.
Please don't cut corners with the furniture package. When you sell/buy
any home what do you look for? Something that is aesthetically pleasing. The
rental market and the secondary resale market are the same. I have seen
identical properties on the same street for sale. The one with the tastefully
decorated interior sold in 19 days. As of today the other house (a town home in
Emerald Island) is selling for the same price and has been on the market for 178
days. That $4,000 savings on the furniture pack hasn't really paid of has it?
Rentals work in the same manner. If your rental house looks like a home, renters
become repeat guests, and that will help you get closer to that magical
breakeven we are all striving for.
Please look at the sample expenditure sheet below. Please note
the 20% down. Just because the builder only needs
10% down doesn't mean you can't put more down.
Sample Income & Expenditure
Income & Expenditure
| Purchase Price |
$300,000.00
|
| Down payment (20%) |
$60,000.00
|
| Mortgage Amount |
$240,000.00
|
| Monthly Payment @ 7.00% (30 year term ) |
$ 1,400.00
|
| Annual Expenses |
| Property Taxes |
$ 2,720.00
|
| Electricity |
$ 2,100.00
|
| Telephone |
$ 300.00
|
| Insurance |
$ 500.00
|
| Pool Maintenance |
$ 840.00
|
| Lawn Care |
$ 840.00
|
| Pest Control |
$ 300.00
|
| Management Fees |
$ 1,500.00
|
| Licenses |
$ 150.00
|
| Replacement (linen & breakages) |
$ 500.00
|
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| Sub-total |
$ 9,750.00
|
| Mortgage payments |
$16,800.00
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| Total Annual Expenses |
$26,550.00
|
| Annual Income |
| High Season 20 weeks @$1,150.00 |
$23,000.00 |
| Low Season 32 weeks @ $900.00 |
$28,800.00 |
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| @ 100% Occupancy (52 weeks) |
$51,800.00
|
| @ 63% Occupancy (32 weeks - 20 High, 12 Low) |
$31,400.00
|
| @ 82% Occupancy (43 weeks - 20 High, 23 Low) |
$43,700.00
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| Projected Annual Gross Profit |
| @ 63% Occupancy |
$4,850.00 |
| @ 82% Occupancy |
$17,150.00
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Above figures are for example only. Estimated costs
and projected income provided by management
companies that are deemed to be reliable.
All figures are for example only. Your results will vary. No guarantees as
to income are stated or implied. Florida law prohibits such claims
Mortgage rates vary according to market conditions and mortgage programs.
Income can and will fluctuate according to season and demand.
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