A reader recently asked a question I hear every week: "I'm selling my California home, which I turned into a rental, and I'll net about $300,000 after taxes. I live on the Treasure Coast now. Should I buy a rental down the street for cash and rent it for $2,000 to $2,500 a month, or just put the money in a high-yield savings account? Prices are dropping and homes are sitting."

Here is my honest answer after more than 25 years of selling bank-owned homes and buying investment property myself: at full retail price, I don't think it's a good time to buy a rental. Unless you're getting roughly 60 cents on the dollar before repairs, the numbers are thin. Here's why, and what I would do instead.

Run the Rental Math First

Take the example above: $300,000 cash and rent of about $2,250 a month. That is $27,000 a year in gross rent. Now subtract what a Florida rental really costs:

  • Property taxes: a rental doesn't get the homestead exemption, so your tax bill is higher than your neighbor's who lives in their home.
  • Insurance: wind and hurricane coverage often runs several thousand dollars a year, plus flood insurance if you're in or near a flood zone.
  • Maintenance and repairs: roofs, A/C units and water heaters wear out faster in our heat and humidity.
  • Vacancy and turnover: plan on a month or so empty between tenants.
  • Management: typically around 10% of rent if you hire a property manager.
  • HOA fees, if the home is in an association.

After those costs, a $300,000 rental at $2,250 a month often nets somewhere around $12,000 to $15,000 a year, or about a 4% to 5% return. These are rough estimates; your actual taxes and insurance quotes will decide it.

Compare It to a High-Yield Savings Account

As of early November 2026, the best high-yield savings accounts are paying around 4% to 4.4% APY, according to rate trackers like Bankrate and NerdWallet. That money is FDIC insured, has no tenants, no roof and no hurricane risk.

Savings rates are variable and can drop, so that 4% isn't locked in. A rental also gives you possible appreciation, depreciation write-offs and rent that tends to rise over time. But when a full-price rental only returns about what a savings account pays, you're taking on a lot more risk and work for very little extra.

The 60-Cents-on-the-Dollar Rule

The investors I work with who do well in this market aren't paying retail. They buy below value, usually bank-owned (REO) homes, foreclosures or properties that need work, and build equity the day they close instead of hoping prices rise.

My rule of thumb: if you can buy at about 60% of what the home is worth, before repair costs, you have a cushion. If the market softens, you're still ahead. If it rises, even better. At that price, the same $2,250 in rent produces a much stronger return on your cash.

Before Your Other Home Closes: Ask About a 1031 Exchange

This is the most important point for anyone selling a former home that's now a rental. If you plan to buy another rental anyway, you may not have to pay that capital gains tax right now.

A 1031 exchange lets you defer capital gains tax when you sell investment property and buy another one. When the property started out as your primary residence and was later rented, IRS rules (Rev. Proc. 2005-14) may even let you combine the home-sale exclusion with a 1031 exchange, depending on how long you lived there and how long you rented it.

The catch: the exchange must be set up with a qualified intermediary before your sale closes. You then have 45 days to identify replacement property and 180 days to close. Once the sale money lands in your account, it's too late. Talk to a CPA or tax attorney now, while the home is still on the market. (I'm a broker, not a tax advisor, so get professional tax advice for your situation.)

One thing to weigh: those deadlines can push you to buy quickly, which works against waiting for a below-value deal. Line up your financing, your criteria and your agent before the clock starts.

Is the Treasure Coast Market Really Tanking?

Not across the board. Local reports show single-family home prices on the Treasure Coast roughly flat to slightly up compared with last year, after declines from 2023 to 2025. Condos and townhomes have been weaker. Many of the homes "sitting for months" are simply priced too high. That's good news for buyers who negotiate, and it's exactly where below-value deals come from.

Frequently Asked Questions

Is a rental property better than a high-yield savings account?

At full price, often not by much on cash flow alone. A rental wins when you buy below value, hold long term and are ready for the work and risk.

What is the 60 cents on the dollar rule?

Buying a property for about 60% of its market value before repairs, so you have built-in equity and a margin of safety.

Can I do a 1031 exchange on a home I used to live in?

Often yes, if it has been converted to a rental and held as an investment. Timing rules are strict, so speak with a CPA and a qualified intermediary before you close.

Where do investors find bank-owned homes on the Treasure Coast?

Through a broker who lists them for the banks. Good REO deals often go fast, so it helps to have proof of funds ready.

Want Help Running the Numbers?

I'm Wayne Gebhardt, owner and broker of Homesaver Real Estate LLC in Stuart. I list bank-owned homes for lenders and work with investors across Port St. Lucie, Stuart, Fort Pierce and the rest of the Treasure Coast and South Florida. If you're weighing a rental purchase, I'm happy to run the numbers with you and let you know when below-value properties come up.

Call or text 772-600-4836 or email Wayne@Homesaverrealestate.com.

Homesaver Real Estate LLC, 395 SW Sally Way, Stuart, FL 34997. This article is general information, not tax, legal or financial advice. Savings rates and market figures change; verify current numbers before you decide.