Invest in rental properties is the same as invest in anything else. In fact, it is like any other business. The profit is the net between the income and expense. Therefore, the business carries the goal of increase the income and reduce the expense.
In the case of rental properties, the income generate from a given property mostly determined by the market condition and does not vary much. The only thing an investor can do is to reduce the vacancy.
There are, however, many ways to reduce the cost.
First, the real estate tax associate with a given property, in Duval county, is associate with the transition price. So it makes sense to purchase a property and fix it instead of purchase a turn key property. The saving on tax remains true regardless the level of handiness of the landlord.
Second fixed cost is insurance, shop for a high-deductible, reasonable insurance company and receive a reasonable bulk discount is all that one can hope for. Some landlords try to under insure the property or only carry liability. FatCat disagrees. Under insure a property is worth than no insurance at all. Insurance is for disasters that hopefully not going to happen but count on it to happen. To not insure or self insure only if one owns sufficient amount of properties that serves the purpose of diversification in the case of unseen disaster.
The third cost is the cost of the property itself, which must be depreciate according to very specific rules. This will be discussed tomorrow.
