[mpc_textblock content_width="100" font_color="#f8bf4d" font_size="80" font_line_height="1" font_transform="none" font_align="left" margin_divider="true" mpc_tooltip__border_divider="true" mpc_tooltip__padding_divider="true"]INVEST THE RIGHT WAY[/mpc_textblock][mpc_divider width="15" align="left" lines_color="#f8bf4d" lines_weight="4" margin_divider="true" margin_css="margin-top:20px;"]

A frequent question asked by those wishing to invest in a Vacation Homeis how much this investment can bring you over the years.

In this publication, we will teach you how to do this calculation, based on our experiences with the property management of our customers.

We set up a Vacation Home profitability calculator you can run simulations and get an idea of how much you'll make.

But first we want to explain in detail what this calculator is made up of.

[mpc_alert icon="eti eti_globe_alt" icon_color="#f8bf4d" icon_size="28" icon_background_color="#f3f3f3" icon_border_divider="true" icon_border_css="border-top:0px;border-right:0px;border-bottom:0px;border-left:0px;border-color:#f8bf4d;border-style:solid;border-radius:0px;" icon_padding_divider="true" icon_padding_css="padding-top:25px;padding-right:25px;padding-bottom:25px;padding-left:25px;" font_color="#5555" font_size="18" font_transform="uppercase" font_align="left" content_border_divider="true" content_border_css="border-top:0px;border-right:0px;border-bottom:0px;border-left:0px;border-color:#88d282;border-style:solid;border-radius:0px;" content_padding_divider="true" content_padding_css="padding-top:25px;padding-right:25px;padding-bottom:25px;padding-left:25px;" background_color="#f7f7f7" border_divider="true" border_css="border-top:5px;border-right:0px;border-bottom:0px;border-left:0px;border-color:#f8bf4d;border-style:double;border-radius:0px;" padding_divider="true" margin_divider="true" margin_css="margin-bottom:30px;" mpc_ribbon__border_divider="true" mpc_ribbon__padding_divider="true" mpc_ribbon__margin_divider="true"]Did you know that Orlando is the most visited city in the United States and the 8th most visited city on the planet?[/mpc_alert]

KNOWLEDGE FOR THOSE WHO HAVE ALREADY INVESTED AND THOSE WHO WILL INVEST


how-to-calculate-the-return-on-vacation-home-investment-property-buying

There are two situations in which this publication will be extremely useful as a source of knowledge for decision-making:

The first is if you already own a Vacation Home and want to understand (based on real figures) whether you are on the right track by looking at your property's profitability history. We also suggest you read our post X Ways to increase your property's occupancy rate.

The second is if you are still deciding on the Vacation Home investment and in search of more information in order to make the most assertive decision.We also suggest reading our post How to buy a house in Florida.

We set up a Vacation Home profitability calculator you can run simulations and get an idea of how much you'll make.

But first we want to explain in detail what this calculator is made up of.

[mpc_callout title_font_color="#e8c168" title_font_size="25" title_font_line_height="2" title_font_transform="uppercase" title_font_align="left" title="ADMINISTRAMOS SUA VACATION HOME" title_margin_divider="true" title_margin_css="margin-top:0px;margin-bottom:5px;" content_width="100" content_font_color="#d4f0ee" content_font_size="17" content_font_line_height="1.5" content_font_align="left" content_margin_divider="true" content_margin_css="margin-top:0px;margin-bottom:0px;" icon="fa fa-home" icon_color="#e8c168" icon_size="80" icon_border_divider="true" icon_padding_divider="true" icon_padding_css="padding-right:30px;" icon_margin_divider="true" icon_margin_css="margin-top:-20px;" background_color="#215072" border_divider="true" padding_divider="true" padding_css="padding-top:40px;padding-right:50px;padding-bottom:40px;padding-left:30px;" margin_divider="true" mpc_button__url="url:%23|title:Link|" mpc_button__font_color="#e8c168" mpc_button__font_size="16" mpc_button__font_transform="uppercase" mpc_button__title="SAIBA MAIS" mpc_button__border_divider="true" mpc_button__border_css="border-color:#f7f7f7;border-style:solid;border-radius:0px;" mpc_button__padding_divider="true" mpc_button__padding_css="padding-top:12px;padding-right:30px;padding-bottom:12px;padding-left:30px;" mpc_button__margin_divider="true" mpc_button__hover_font_color="#75cdde" mpc_button__hover_background_color="#f7f7f7" mpc_button__hover_background_effect="slide-top" mpc_button__hover_border_divider="true" mpc_divider__disable="true" mpc_divider__width="10" mpc_divider__content_border_divider="true" mpc_divider__content_padding_divider="true" mpc_divider__lines_color="#f7f7f7" mpc_divider__lines_weight="2" mpc_divider__padding_divider="true" mpc_divider__margin_divider="true" mpc_divider__margin_css="margin-bottom:-10px;" mpc_ribbon__border_divider="true" mpc_ribbon__padding_divider="true" mpc_ribbon__margin_divider="true"]Quer manter sua Vacation Home sempre ocupada? Cuidamos disso para você! Temos loja física no Brasil e USA [/mpc_callout]

Starting point, occupancy rate


1Some very important factors about your Vacation HomeThis will serve as a parameter and coefficient for calculating the return your property can bring you.

A occupancy rateis of paramount importance, and one of the main factors that make up the return on your investmentBut it's not the only one. After all, there's no point in having a property that's always rented out but poorly managed, generating unnecessary expenses and thus reducing your profit margin.

Therefore, the first very relevant piece of information we share with you is that the average annual occupancy rate of a Vacation Home property is 67% to 80%according to the properties we manage for our clients.

So keep these numbers, we'll use them later.

The definition of daily rate of the property is another very important factor to take into consideration, especially if you are still in the process of deciding which investment you want to make.

Since the daily price of a property can vary depending on the region, condition of the property, decoration, photos, convenience items in the area, proximity to the main attractions, etc...

Another important point is that the daily rate varies according to the time of year (vacation period, summer, winter, etc.). For the calculations below, we are using the average over 12 months.

Thus, we already have the second indicator that will make up our profitability study.The daily rate will depend on the type of property being rented.

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The daily rate of the property can have a direct impact on the profitability of the investment you are going to make or have already made. We can carry out a valuation of your property, or the property you have in mind, to give you an appropriate estimate of this price. [/mpc_callout]

Being quite simplistic and using only the information provided so far, we can already make a small calculation, considering a full year:

Gross Revenue = (Occupancy rate * 365) * Daily rate.

Assuming that our Annual occupancy rate is 80%, then this means that the property would be occupied during 292 days of the year and 73 days would be completely empty.

If the average annual daily rate is USD 250.00, then we have:

GROSS REVENUE at 292 days x USD 250.00 = USD 73,000.00.

These coefficients are our starting point, but calm down, other coefficients will have to make up our profitability grid.

What costs make up our Profitability grid?


2 After understanding the first stage of our profitability calculation (Occupancy rate and daily rate), the next step is to find out about the costs involved in renting and managing a property.

The first investment involved is commissioning the manager who will look after your property, keep it running smoothly and give you and your guests all the advice you need.

A commission fee of the administrator, is 20% on the gross revenue value of the property.

Thus, following the ANNUAL GROSS REVENUE that we found above (USD 73,000.00), 20% of this revenue will be for administrator payments, i.e. USD 14,600.00 annually in commission.

At this point, two very common questions arise: What is the role of the administrator? And why should I pay commission?

Therefore, we have listed below some of the responsibilities of the property manager:

  • Have the knowledge, tools and resources to make the property available / offer it for rent as much as possible on the main search portals, such as Booking.com, Decolar.com, CVC, Viajar.net, etc...
  • Manage payment gateways (PayPal, Visa, MasterCard, etc...) and proceed with transfers and payments to the owner.
  • Be the point of contact for your guests.
  • Keeping the property clean during and after your guests' stay.
  • Monitoring and signaling possible preventive and/or periodic maintenance of the property.

There are many other functions performed by Property managerbut which are outside the context of this post.

But to keep you up to date, we've listed exactly how it works in the post X Ways to Increase Your Property's Occupancy Rate.

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7 Ways to Make a Profit on Your Vacation Home[/mpc_callout]

Fees and Maintenance


3 Some other fees and maintenance also make up our profitability.

They are:

 

  • HOA à (Homeowners Association Fee) Costs on average USD 350.00 / month.
  • Property management fee USD 150.00 / month.
  • Pool maintenance (if any) USD 100.00 / month.
  • Electricity / Water / Gas USD 280.00 / month.
  • TV / Internet / Phone USD 74.00 / month.
  • General maintenance to USD 125.00 / month.

Total -> USD 1,079.00 / month or USD 12,948.00 per year.

Returning to our initial calculations, we had:

GROSS REVENUE = USD 73,000.00

COMMISSIONING ADMINISTRATOR 20% OF GROSS REVENUE = USD 14,600.00 / YEAR.

ESTIMATED EXPENSES = 12,948.00 + 14,600.00 = USD 27,548.00

ESTIMATED ANNUAL NET PROFIT -> 73,000.00 – 27,548.00 = USD 45,452.00.

Remember that your net profit is dollarized.

Now convert this same profit into Reais and see the additional income your investment is bringing you.

[mpc_alert preset="mpc_preset_20" icon="fa fa-dollar" icon_color="#88d282" icon_size="28" icon_background_color="#f3f3f3" icon_border_divider="true" icon_border_css="border-top:0px;border-right:0px;border-bottom:3px;border-left:0px;border-color:#88d282;border-style:solid;border-radius:0px;" icon_padding_divider="true" icon_padding_css="padding-top:25px;padding-right:25px;padding-bottom:25px;padding-left:25px;" font_preset="mpc_preset_13" font_color="#5555" font_size="18" font_transform="uppercase" font_align="left" content_border_divider="true" content_border_css="border-top:0px;border-right:0px;border-bottom:3px;border-left:0px;border-color:#88d282;border-style:solid;border-radius:0px;" content_padding_divider="true" content_padding_css="padding-top:25px;padding-right:25px;padding-bottom:25px;padding-left:25px;" background_color="#f7f7f7" border_css="border-width:0px;border-radius:0px;" padding_divider="true" margin_divider="true"]Do you like the result? The concept is simple, you are investing your assets in the strongest and most stable currency on the planet![/mpc_alert]

But it doesn't stop there... You can finance the propertyand have the possibility of paying the installment with the profit from own rentalIf you're looking for a vacation rental, you can have a property to spend the vacations with your family without having to pay for accommodation, and you can still have money left over. As detailed below.

[ipt_fsqm_form id="6″]

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The best value for money in Orlando


  • Better occupancy rate
  • Close to the main attractions
  • Best stores and convenience items
  • Complete leisure facilities for your family

In the best area of Orlando

 

 

 

[/mpc_callout]

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More than selling real estate, we are concierge specialists. We take care of everything so that you can have the best experience with your investment.

We have physical stores in Brazil and the USA

 

[/mpc_callout]

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[mpc_callout preset=”mpc_preset_16″ layout=”style_2″ title_font_preset=”mpc_preset_17″ title_font_color=”#555555″ title_font_size=”25″ title_font_line_height=”2″ title_font_transform=”uppercase” title_font_align=”left” title=”GREEN CARD” title_margin_divider=”true” title_margin_css=”margin-bottom:10px;” content_width=”100″ content_font_preset=”mpc_preset_44″ content_font_color=”#888888″ content_font_size=”16″ content_font_line_height=”1.75″ content_font_align=”left” content_margin_divider=”true” content_margin_css=”margin-top:0px;” icon_align=”left” icon=”fa fa-id-card-o” icon_color=”#b39a68″ icon_size=”64″ icon_border_css=”border-radius:0px;” icon_padding_css=”padding:0px;” icon_margin_divider=”true” icon_margin_css=”margin-bottom:0px;margin-left:-15px;” background_color=”#ffffff” border_css=”border-width:10px;border-color:#b39a68;border-style:solid;border-radius:0px;” padding_divider=”true” padding_css=”padding-top:50px;padding-right:25px;padding-bottom:25px;padding-left:50px;” mpc_button__align=”left” mpc_button__preset=”mpc_preset_29″ mpc_button__url=”url:%23|title:Link|” mpc_button__font_preset=”mpc_preset_20″ mpc_button__font_color=”#ffffff” mpc_button__font_size=”16″ mpc_button__font_transform=”uppercase” mpc_button__title=”SAIBA MAIS” mpc_button__background_color=”#b39a68″ mpc_button__border_divider=”true” mpc_button__border_css=”border-top:2px;border-right:0px;border-bottom:2px;border-left:0px;border-color:#b39a68;border-style:solid;border-radius:0px;” mpc_button__padding_divider=”true” mpc_button__padding_css=”padding-top:12px;padding-right:32px;padding-bottom:12px;padding-left:32px;” mpc_button__margin_divider=”true” mpc_button__margin_css=”margin-top:0px;margin-left:0px;” mpc_button__hover_font_color=”#b39a68″ mpc_button__hover_background_color=”#ffffff” mpc_button__hover_background_effect=”expand-horizontal” mpc_button__hover_background_offset=”0″ mpc_button__hover_border_css=”border-radius:0px;” mpc_divider__preset=”mpc_preset_7″ mpc_divider__width=”30″ mpc_divider__align=”left” mpc_divider__content_type=”icon” mpc_divider__content_position=”0″ mpc_divider__content_padding_divider=”true” mpc_divider__content_padding_css=”padding-right:5px;padding-left:0px;” mpc_divider__icon=”fa fa-stop” mpc_divider__icon_color=”#f3f3f3″ mpc_divider__icon_size=”15″ mpc_divider__lines_color=”#f3f3f3″ mpc_divider__lines_weight=”3″ mpc_divider__margin_divider=”true” mpc_divider__margin_css=”margin-left:-5px;”]Podemos lhe auxiliar com o processo de obtenção de Green Card. More than selling and managing real estate, we are Concierge Specialists. We take care of EVERYTHING for you.[/mpc_callout]

Possibility of paying for the financing of your Vacation Home with the rental income itself


profitability of a vacation home
Champinons Gate - Orlando's Best Value for Money

4 As mentioned above, you may have the possibility of pay for the financing of the property with the rental income it generatesYou can make a profit and still have a house to spend the vacations in with your family, without the cost of accommodation.

As we explained in the post How to buy a house in Florida, it is possible to finance a property in the United States, even if you are a foreigner, which in fact was responsible for 22% of all purchases in the United States, with sales of 153 billion dollars in more than 284,000 homes.

The interest rate is low compared to Brazil, averaging 5.5% per year.

Today, in 2018, for financing a property of approximately 500,000 dollars, for example, only 30% is needed as a down payment, and the financing can be done in up to 30 years, which would give an average installment of USD 2,600.00 including all taxes.

If we measure the estimated net revenue from the previous year (USD 45,452.00), the estimated net monthly value is USD 3,787.00.

This way, your rental income can pay off the mortgage, leaving you with a balance of USD 1,187.00 per month or USD 14,244.00 per year free in your pocket.

Remembering the main point, you will have equity in dollars.

In short, knowing how to get the best return from renting out your property is the best way to make a safe investment, and above all dollarize your assets.

 

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Simulate the profitability of a Vacation Home tailored to your needs. [/mpc_callout]

The scenario above was calculated with an occupancy rate of 80%, which is an optimistic scenario.

Doing the same simulation with the worst case scenario of occupancy rate 67%, i.e. your house being vacant for 120 days or 4 months (which is unusual), the result we get is:

GROSS REVENUE at 244 days rented x 250.00 daily rate = USD 61,000.00

COMMISSIONING ADMINISTRATOR -> 20% OF GROSS REVENUE = USD 12,200.00 / YEAR.

OTHER EXPENSES = USD 12,948.00 / YEAR.

ESTIMATED EXPENSES = USD 25,148.000 / YEAR

ESTIMATED NET PROFIT -> USD 61,000.00 - 25,148.00 = USD 35,852.00 / YEAR OR 2,987.00 / MONTH.

In other words, you still have the possibility of paying off the mortgage and keeping the balance of the property, as well as being able to go on a trip with your family without having to pay for accommodation.

 

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Find out all the details about buying a house in Florida. Discover how simple and profitable this process can be. Dollarize your money!     [/mpc_callout]

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