You have decided to build your portfolio by purchasing Florida investment properties. The lure of making $100 –  $1K a month in rent has convinced you to pursue this investment strategy. Before you purchase your Florida investment properties, read our tips on how to select real estate investment properties, calculate and understand CAP rates, and how to correctly account for capital gains on your tax forms.

Florida Investment Properties : A Smart Investment Strategy

Florida investment properties can yield great long-term profits for savvy investors, especially for those smart individuals who know when to take advantage of a stable investment market. By charging a fair amount for the market in which your Florida investment properties are located, you can easily earn $100 –  $1K a month per property. Real estate investment can be short or long term, and the latter is very popular in the United States. Investors interested in long term Florida investment properties can pursue different options, including rental properties, buy and hold properties, and commercial properties. With the right amount of patience, investment savvy, and research, an investor can make $100 –  $1K a month.
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Making $100 –  $1K a Month with Florida Investment Properties
There are multiple ways to make long term real estate investments, and just as many ways to ensure that these properties earn you $100 –  $1K a month. Here, we will discuss three types of Florida investment properties: Rental properties, buy and hold properties, and commercial properties. Each type of property has specific aspects that benefit investors.

• Rental properties. This is the most common real estate investment. Rental properties allow investors to purchase a property while being able to recoup some money through rental income, which can be $100 –  $1K a month, depending on the property’s location. This allows the investor to have some cash flow while also having funds to pay the property’s mortgage, establish a fund to cover repairs, and so on.
   

  In the long run, rental properties can lead to a high return, as demonstrated by the estimated range of $100 –  $1K a month in rents. However, the investor must do some research for this to happen. The investor must understand the market and have patience. It might take years for the property to turn a significant profit. Nevertheless, it is not unheard of to make $100 –  $1K a month on this sort of investment property.
  To put it in concrete terms, consider this case. A real estate investor purchased a Florida investment property for $150,000 three years ago. She has been renting it out for $1,000 per month for the last three years. As a result, the investor has made $36,000 in rental income (after taxes) in just three years. Additionally, the prospect of appreciation must be considered. If the appreciation of this property has reached 15% in three years, the investor’s return would correspondingly increase.

• Buy-and-hold properties. These properties are not very different from the rental properties discussed earlier. Both types of investment properties involve renting the property; like rental properties, buy-and-hold properties can make $100 –  $1K a month. However, buy-and-hold properties are purchased with a different intended outcome for that investment.
   

  Buy-and-hold property investments generally require less maintenance and out of pocket spending on the investor’s part. Buy-and-hold investments are purchased with an eye on appreciation predictions, and with the intention to sell them years later for a profit. This means that buy-and-hold properties do not need the specifications of rental properties. These factors make this type of property an ideal investment for individuals interested in Florida investment properties.
  Nevertheless, this type of property has some drawbacks. One of the major, and costly, differences between rental and buy-and-hold properties is the amount required to furnish, maintain, and pay taxes on the property. However, if you make $100 –  $1K a month a month on this rental property, covering these costs should not be too difficult.
  Buy-and-hold properties can make a savvy investor significant money—as long as he or she has a smart investment strategy. To put it in concrete terms, consider this case. A real estate investor invested $200,000 in Florida investment properties. This investor wants to purchase 3 studio apartments, each worth approximately $60,000. The estimated appreciation rate is 5% per year for each property. If the real estate investor holds these properties for six years, then he or she will net a total profit of $54,000 for the 3 studio apartments over six years only.

• Commercial properties. This category is growing by leaps and bounds these days. The United States commercial market is massive, and commercial real estate investments can result in huge returns. Commercial real estate properties are leased to businesses, which can range from small specialty stores to large shopping malls. You could make $100 –  $1K a month from these Florida investment properties
   

  When you purchase commercial Florida investment properties and lease the real estate to businesses, whether they are local small shops or larger corporations, your real estate investment can generate significant cash flow. However, you must consider some realities about commercial investment properties. These properties can remain vacant longer than residential ones. This should not dissuade you from investing in commercial properties. The United States population is growing, and as a result, individuals are seeking work—and entrepreneurs as well as established business owners need commercial properties to rent. Florida investment properties could result in a profitable investment through rental income, and a savvy investor could sell the property when demand is high and make a significant profit.
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Florida Investment Properties and CAP Rates

One of these most important terms to understand when investing in real estate is “capitalization rate,” or “CAP rate.” This is how investment properties are measured.
If you are getting a bit overwhelmed, do not worry. A CAP rate is important, and easy to calculate for Florida investment properties.
To calculate a property’s CAP rate, you divide the building’s annual net operating income by its purchase price. For example, if your Florida investment properties costs $1 million dollars and generates $75,000 of net operating income a year, then it has a 7.5% CAP rate.  
Different CAP rates represent different levels of risk. A low CAP rate implies a lower risk; conversely, a higher CAP rates imply higher risk. You must ask yourself what your tolerance is with respect to risk, and this determines the correct CAP rate for you to pursue. 

Determining Correct CAP Rates for Florida Investment Properties
When you analyze CAP rates and try to determine the correct CAP rate for Florida investment properties, use these factors as a guide.

• The Florida investment property’s location. A wealthier population will drive the local economy more, which is why CAP rates are lower in Miami than Manalapan. However, even within a metropolitan area, CAP rates can vary according to neighborhood. You can ma
• Current interest rates. If the Fed adjusts interest rates, CAP rates can also fluctuate up to 1%, even if the value of the Florida investment property itself does not change. In this instance, rising interest rates will mean a fall in property values—and rising interest rates lead to increased cost of debt which can decrease your net cash flow. Even though you do not have much direct control over interest rates, you need to be aware of what they currently are and where they are predicted to go.
• Your property’s asset class. Florida investment properties come in many forms, including residential, commercial, and industrial. The lowest perceived risk is with multifamily residential properties. Everyone needs a place to live; this is a constant in the United States. Not everyone will need to buy artisanal, handcrafted soaps, and renting to this sort of commercial enterprise might result in more loses and overturn. The property’s asset class also factors into the amount that you can charge for rent, potentially exceeding the $100 –  $1K a month estimated range.

Florida Investment Properties and Capital Gains

"Capital gains" is the term used by the IRS to denote a profit made on an investment. If an investor experiences a loss of investment, the term is “capital loss.”
Capital gains result from the successful sale of investments, including stocks and specific real estate such as Florida investment properties. Note that the $100 –  $1K a month that you can make on a property does not factor into the sales or purchase price. Capital gains applies to rental properties (residential, commercial, or industrial); the IRS does not consider one’s personal residence is not considered an investment property.
The term "short-term capital gains" applies to profits made from investments that are sold within a year of the purchase, and are taxed at the same rate as regular income. Therefore, higher the individual investor’s income, the higher the tax rate he or she will pay on these capital gains.
"Long-term capital gains," unlike “short-term capital gains,” applies to profits made on investments sold after having been held one year or longer, which is likely the category into which your Florida investment properties will fall. Long-term capital gains are taxed at a flat rate. Real estate capital gains are usually long-term gains as most real estate investments are held at least a year.
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Florida Investment Properties , Capital Gains, and Tax Season

A capital gain is not just the difference between a property’s sales price and purchase price. It also includes cost of improvements to the property, such as additions and renovations, newly purchased appliances, and closing costs in the purchase and sale process. These amounts are subtracted from the sales price to determine the investment’s capital gain. (Note that the $100 –  $1K a month that you can make on a property does not factor into the sales or purchase price.) Both capital gains and loses on any Florida investment properties must be reported to the IRS on Schedule D, Capital Gains and Losses, and then transfer the amount to line 13 of Form 1040.

Florida Investment Properties : Your Ticket to Long-Term Real Estate Profits

To be a successful real estate investor, you need to have a clear vision of what you want to accomplish. Long term investments require patience and understanding the market, but the benefits of such investments cannot be overstated. With the right business acumen and patience, you could make $100 –  $1K a month from Florida investment properties. And remember to report those capital gains to the IRS by Tax Day!

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