Examining the St. Cloud Rental Market- Why developments don’t work as good investments.

 Examining the St Cloud Florida Rental Market  Why developments don’t work as good investments.

While planned developments appeal to the average consumer, they can be money pits in disguise.  The park-like settings, and Norman Rockwell appeal comes with a hefty price tag. 

Consumers want nice amenities. They want community pools, and fancy clubhouses, fitness centers, and lighted sidewalks for evening strolls.  All of these things cost the builders money. Or does it?

CDD fees (community District Development) are bonds the builders put in place to pay for amenities like sidewalks, street lighting, club houses, community pools and common areas. These bonds are rolled into the property tax paid by home owners.

 Novice investors lost their shirts when the housing market peaked back in 2007.  Why?


Saavy investors look at the bottom line. Novice investors did not.  Attracted by the new, shiny, and nice features not the bottom line. They were thinking like “home buyers” and not like “investors”.  As a result, they got sucked into losing propositions.

Novice investors, did not factor in the carrying costs and additional fees as part of their investment. For that reason sub divisions while appealing to consumers as primary residences are attractive, are losing propositions for seasoned investors who know the burden of additional taxation such as CCD fees and Home Owners Association fees chipped away at their profit margins.

Comparing apples to apples, a 3 bedroom 2 bath home within the city limits of  St Cloud Florida (outside of development) may have property taxes within a range of $2000-3000.  A similar home inside a development with CDD fees would have a tax base of $3000-4000.  Not including the additional cost of the home owners association fees. 

It is not hard to figure out why they went belly up when the market went flat.  They got caught short as value began to decline and the carrying costs were prohibitive from profitable renting.

While sub-divisions are still appealing to many as primary and secondary homes, they are by no means “tax-payers” when it comes to investment and return on investment unless renter have deep pockets. Which in this economy is hard to come by. 

What Renters are Looking for.

It can be summed up in just 2 words.In two words: AFFORDABLE HOUSING

Most renters are very cost conscience. Times are tough all over, unemployment is high, and disposal income is diminishing.  As a result renters are looking to cut costs where ever possible.  They are turning to the historic homes, and smaller homes in town as a way of saving money and cutting back on paying for amenities they will rarely use.