Florida Investment Property

Investing in Florida property is a big decision to make and not one to made lightly, but if you can afford to hold a property for a few years or longer, then we believe that investing in Florida real estate is one of the most astute investments you can currently make.

Every market has increases and decreases in value - just the same as the stock market - but over time you will see values increase steadily. Real estate, property, homes, bricks and mortar, whatever you prefer to call it is on e of the safest investments that you can make, when viewed over the meium to longer term.

We have all read the press and the articles about investors losing money hand over fist in the last couple of years, but let us try and put it into perspective.

Did the investors want to hold the property for several years?

No. Many of them wanted to buy and "Flip" the property either at or before closing.

Did they take a serious look at the amount of "investors" buying both in the development and / or within the vicinity?

No. The majority followed the crowd and invested because their friend, brother, boss etc were buying and sensible due diligence seemed to go out of the window. The developers were holding "lotteries" because there were so many clients interested. It was inevitable that many buyers would not complete, due to lack of financing even before the downturn in the market, which meant that investors would have to compete with developers pricing in order to sell the property.

Did all of these investors pay a deposit of 20-30%?

No. Many put down as little as possible - sometimes only one or two thousand dollars, with a belief that they would be able to raise finance when necessary. The banks were already over-stretched after 2-3 years of ridiculously high real estate sales. Those investors that DID pay a larger/normal deposit are at least in a position of being able to pay for the property and will be able to attain their money back and equity gains in a few years, once the market has adjusted.

So where does this all leave us today?

With the US and the UK both putting tens of billions into the banking sector this week, it doesn't appear to bode well for those looking to invest in a new home in Florida and with banks uneasy - to say the least - to lend money, it will be very difficult if not impossible for many first time buyers to get their feet on the property ladder without someone "gauranteeing" their loan. The days of 100% mortgages have all but, become extinct and in our opinion, not before time. We have always recommended our clients to pay, wherever possible, 20-30% down as a deposit and foreign buyers have indeed found it essential to do so in order to get a mortgage. Now anyone looking to buy a home in Florida, will need to put down "at least" 20-30% in order to get a mortgage, you will need a strong proof of income, a good credit report and even then the documentation will need to have all of the T's crossed and I's dotted to perfection.

The flip side of the market is actually very interesting. Bank rates are low, sellers are keen to "Talk Turkey" and prices are the same as they were at the beginning of the century. Home buyers that are cash rich are in a great position to buy a great new home at a discount price - The rich get richer and the poor get poorer - springs to mind but with a difference.

If you are looking to upgrade your home locally and your house was worth $300,000 before 2005 and now it is worth 20% less, many owners believe that a $60,000 drop is bad news. But, if you are looking to upgrade to a home that was worth $500,000 and is now worth $400,000, you are actually $40,000 better off and with lower interest rates, your monthly payments shouldn't increase too much, assuming that you are already tied to a fixed rate that has been in place for a few years.

Well in simple terms, NOW is a buyers market for those lucky souls that have liquidity. Surprisingly that is a lot of people! The majority of retirees prefer to buy their new homes in Florida for cash - No mortgages, no obligations, no monthly costs - other than HOA fees and utilities.

"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
-- Warren Buffett

Sue Lutter who is our broker/realtor in Fort Myers was talking to a client that bought a property back in 2005 who has now decided to buy another unit in the same block as his first at over a hundred thousand less than his first. His philosophy is that if he buys this second unit he will be halving his loss on paper. And as there is a tenant waiting to enter the property, he figures that the investment will be covered by the rental income and he will be able to wait a couple more years to take his profit.

There are a number of financial equations that you can look at, but if property is cheaper today than it was 3-5 years ago, then it is extremely likely that it is on sale. A property bought now at these low prices, means that you will require a LOWER monthly rental income in order to cover your costs, which in turn will enable you to undercut many if not all of your new neighbours. This lower rental price should make your property far more appealing when compared to other properties in the street. A property with a good long ter tenant or a vacation rental with high occupancy should be your goal. A low purchase price is the key, if you buy right and just as importantly, can afford to buy, then the risk is negligible IF taken over a number of years.

There is a vast choice of property in Florida currently suitable for investment, essentially broken into four categories:

• Land

• Commercial

• Long Term Rental

• Vacation Rentals

Once you have decided which option suits you best, it is then a question of choosing the right location.

Land investment or land banking as it is also known, is great for holding on to for several years as the annual taxes are generally very inexpensive, insurance negligible and there are no utilities to pay for.

Commercial property investments can be stores, offices, garages, warehousing, etc can be great investments if they are, as with anything, in the right location. Downtown areas can yield excellent returns if the local authorities are in the process of or are in the planning stages of renovating and rejuvenating the area.

Long term rental homes should be in close vicinity to and have good access to employment areas, be within the best school zones as you can afford, if you are aiming at the family market and near to hospitals and care facilities if you are aiming at an older market.

Vacation homes should be EITHER close to Orlando and the theme parks, where you will find a steady demand for weekly accommodation, or near to the beaches and other "Natural" attractions which are suitable for family holidays and / or longer term snowbird/ winter leases.

If you buy the wrong property in the wrong area it is irrelevant how cheap it is! Allow our realtors to guide you through the potential maze of Florida real estate investment and be assured that they will locate the right investment vehicle to meet your needs.

Please take a look at some of our properties by clicking on the city links in the grey section to the right of the page or simply fill in our enquiry form explaining what type of investment vehicle you are looking for and what you want it to achieve

Take a look at some of our properties in Florida:

Pre Construction property | Vacation Homes | Luxury homes | Golf course Homes

Florida off plan properties, Orlando, Disney, Kissimmee, Osceola, Orange, Oviedo, Lake, Tampa, Clearwater Sarasota, Bradenton, Anna Marie Island, Palmetto, Parrish, Nokomis, Siesta Key, Manasota Key, Longboat Key, Venice, Englewood,Punta Gorda, Port Charlotte, Cape Coral, Fort Myers, Sanibel, Captiva, Bonita Springs, Naples, Miami, Miami Beach, Daytona, Jacksonville, Aventura, Brickell, South Beach Miami - SoBe, Hallandale, Sunny Isles, Hollywood, Bal Harbour, Fort Lauderdale, North Bay Village, Pompano Beach, Surfside, West Palm Beach, Florida Keys, Upper Keys, Middle Keys, Lower Keys, Florida Off-plan pre-construction property, Florida beachfront and Florida waterfront real estate, Florida single family homes, Florida condos,  Florida townhomes,  Florida luxury golf course villas,  Florida mansions, Florida estate homes. Waterfront, gulf access, sailboat access, canal and deep water real estate in Florida. Highlands Reserve Golf community in Orlando, Sandy Ridge, Aviana Resort Orlando, Bellatrae Resort Orlando Bellavida Resort, Orange Tree Resort Orlando, Naples Bay Resort, Florida Active Adult Communities, Florida +55 Communities

Florida Investment Property - Investing in Florida