Can I get more cash flow from this property?

4 Replies

I'd like to understand if i am getting the most out of this property: 

It is a 1550 sq ft single family 3/2 ranch home in the Orlando Fl. SODO-ish area. Corner lot is 110' wide x 140' deep. house sits right in the middle and is 67' wide x 25' deep. the rest is backyard and front yard. It has been a consistent cash flower for the last 5 years w/ no issues.

It is on E Grant for those familiar w/ Orlando SODO, between Orange and Delaney Park.

As-is, property is worth approx. $300k to the market as a good guess. Bought it for $180k 5 years ago as a buy and hold.

Developers are putting $400-600k homes on tear-down properties all around it.

I looked at tearing down and putting a 4-plex on the lot...not allowed per code.

I looked at tearing it down and doing a duplex...after all costs and penalty of interrupted cash flow...bad move.

I looked at tearing down and putting two single family homes...bad cash-flow move.

It just seems that with a lot so large relative to the size of the home is in such a hot/in-demand area, i should be able to get more cash flow. 

Anyone have any thoughts/ideas? Thanks in advance.

Tiny house community? Really, I think your options are to update/remodel what you have and make sure you're getting premium rent for the area OR just SELL (as is) and put your equity elsewhere. Have you checked into potential rezoning class, like offices, etc? 

Thanks, Courtney. No, its not a tiny house community. We have pushed the rent up each year to what the market can bear. Of all options, selling and using equity elsewhere may just be the best.

@Elwyn D. Have you thought about marketing the property to a builder?

Keeping it as is, only doing necessary repairs, and keep doing annual rent increases. This is your best option if you intend to hold. Your greatest cost is the income you are losing on the dead equity. You are presently losing about $500/month on the opportunity value of your equity. If you subtract that from your rental income your property itself is probably negative cash flow. Based on the value of the property you have likely surpassed it's investment value point.  You would need $3500/month in rental income to make this property a keeper.

Best option to increase cash flow would be to sell and reinvest in largest multi unit with minimum DP.

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