Long Beach Island Real Estate Rental Properties
Are LBI Real Estate Rental Properties Profitable 
Are LBI Real Estate Rental Properties Profitable 
Are LBI Real Estate Rental Properties Profitable
Long Beach Island Real Estate Rental Investments
I am often asked by those looking to invest in the LBI real estate market if a summer rental property is profitable. While there is not a one size fits all answer to this question, under the right conditions, they can be very profitable in a variety of ways. When looking to invest in the LBI real estate market, a buyer should consider the investment in two ways: rental income and market appreciation. Before we go any further, I must say that all investments should be discussed with a financial planner, accountant, etc. to see what makes the most sense for you. When looking to buy a rental property in the LBI real estate market, there are a few variables that buyers should review:
- Fundamentals of the market (location, lot size, etc.)
- Can the property be rebuilt
- What does the current rent potential offer and how can it be improved
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market
Are LBI Real Estate Rental Properties Profitable
When buying any home in the LBI real estate market for any reason, the fundamentals of the market should also be kept in mind. Things like the size of the lot, location relative to the beach, etc. can have large swings in the growth and appreciation of the asset. They will also have a significant influence on the ability to rent and sell the home down the road. Secondly, the potential for building a new home is of paramount concern. There is simply no better way to beat the market than to construct a new home. Doing so should give you an immediate equity position equating to 20%-30% of the project cost as well as increase the amount of rent a home can generate. Lastly, rentals should be looked at as a long term investment. To this end, there are ways to grow the rental and the profitability of the investment over time. It can be advisable to start with a smaller home and make necessary improvements to it to increase the rental income. Over time, the house can be torn down and a new home built in its place. That will increase the equity position of the home as mentioned above, while at the same time increase the rental income.
Buying a Rental Investment Property in the Long Beach Island Real Estate Market
Of course, the amount of profitably in the rental will depend on the home, location, amenities, and how the house is financed. Investors who plan to finance the majority of the purchase will see a lower rate of return. In my experience, this can vary from just covering the ownership costs of the home to about 3%-4% return on the investment. In a case where a home is purchased, torn down, and rebuilt it is not uncommon to see a 12%-15% return on the investment when the transaction is paid for in cash. I am happy to review any potential investment and give you my thoughts on the profitability of the rental and ways to improve upon it. If you have any questions about buying, selling or investing in the LBI real estate market, please do not hesitate to contact me.
By : Nathan Colmer |LBI Real Estate Agent | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market
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