Cape Coral Vacation Rental Investment Opportunities
Cape Coral Florida is a great location to invest in real estate. Many buyers invest in their own vacation home for their own use while others invest in Cape Coral homes to rent out for income.
How much money can a home in Cape Coral earn as a vacation rental?
That is determined by a lot of different factors. The first would be location. You know what they say, right? Location, location, location. Well, this certainly applies in Cape Coral. While honestly, you can rent a property located anywhere but most people want to be close enough to get to the beaches, close enough to stores and restaurants, close to boating, etc. This makes the South part of Cape Coral the most desirable for those reasons (at the time of writing this article - as the city continues to grow).
Secondly, it's important to decide if you are looking for a waterfront home or an off-water home. it’s important to understand that while most canals in S Cape Coral have access to the Gulf of Mexico, there are some that do not. They are what we refer to as “freshwater canals” which may lead to other canals or even lakes but do not go through to open water / the Gulf of Mexico. Obviously, the closer the home is to open water, the more valuable the land, therefore the higher the prices the closer the home is to getting out to open water. These lots are called “gulf access” and when you see “no bridges/direct access/sailboat access” those homes are generally very close to open water and allow for access without having to go under bridges and/or locks/lifts.
Next let’s talk about pools. It is almost always ideal to have an inground pool for your vacation rental. You also want that pool to be heated. It can be heated by solar or electric power. It is also possible to be gas heated but gas isn’t super common in Cape Coral.
Size of home. Consider who your target renter is. Do you want a huge house or something smaller? All are rentable but also bring different prices as well. The average occupancy is 6-8 and larger high-end homes perhaps 12-14.
Furnishings, decorations, extras. In this more and more competitive market, it is imperative that your rental stands out. This also includes your marketing. We definitely recommend you have the place decorated or staged by a professional if this isn’t in your wheelhouse. And we believe that professional marketing photos are a MUST.
What about expenses and help with managing the property including lawn and pool care?
The great news is that there are so many companies in Cape Coral that are licensed, insured and excellent to assist with these needs. You will find that lawn care runs about $100/month as does pool care. Your other expenses will be electricity (we recommend charging tenants over a certain figure - especially if you are allowing them to heat the pool with electricity). On an average 2,000 s.f. house we see a range between $200-400/mo for electricity (lots of factors to consider). If you are on city utilities you will also have a water & sewer bill. This typically runs between $100-200/mo for the average 2,000 s.f. house. Next would be the internet or cable. We are seeing most owners just having internet and smart tvs or some box for streaming services. The Internet runs between $65-200/month depending upon provider/services you select.
Taxes and insurance can vary greatly. You may see one house with a tax bill of $4,000 and another with a tax bill of $7,000 that appear to be the same value. The second could have recently had water/sewer put in and the owners had the balance put into their tax bill to pay over time. Or the $4,000 tax bill could be low because that homeowner has homestead or other tax exemptions. We can help you figure out the reasoning. Also, it’s important to know that your tax bill WILL change. With a purchase, there is almost always an adjustment. Without a homestead exemption, since this house is an investments property, you will be taxed the highest amount as well. Insurance varies a lot and it’s important to make sure the plumbing, electric and roof are all in good shape or you may not even qualify for home owner’s insurance. Also, our flood maps just changed in 2021 and so did rates, quite drastically. You can assume the current homeowner’s flood insurance policy in many cases and that could save you thousands. If they did not have flood insurance your new rate, if the house is in a flood zone, could be quite substantial. Again, we can help guide you on this.
I don’t want to cover too many topics in one article so I’m going to end this one here. We welcome your questions so feel free to call our agents to have additional information sent or questions answered.
If you would like to start a home search right here on our website click the links below: