Top 5 Reasons Why Its a Great Time to Invest in South Florida Residential Real Estate
As the title suggests, now is an excellent time to invest in South Florida residential real estate. Here are 5 reasons why (in no particular order of significance):
1) According to the Florida Association of Realtors® statistics, in the last year, prices have dropped well over 20%… this means affordable home prices for both homeowners and investors. In South Florida, specifically the prices have dropped at an even higher rate. For many South Florida real estate investors, this is the first time that they can cashflow $300+ per month on rental properties as part of their long term buy & hold strategy. Many who were investing 5 years ago were actually spending money each month to hold their rentals and were speculating on rapid appreciation that did come to fruition but only for a short amount of time).
2) Speaking of long term buy & hold strategies, its a smart one because the U.S. Census Bureau estimates that Florida is one of three states that will account for nearly half of the total U.S. population growth between 2000-2030. The Bureau also estimated that by 2011, Florida would be the third most populated state in the country! Let’s face it — people are still moving to South Florida and will continue to year after year — both families as well as retirees. These people will need homes to rent and homes to purchase.
3) Foreclosures, particularly in South Florida are in abundance and there doesn’t seem to be a quick end in sight. According to public records, new foreclosure filings in Miami-Dade and Broward counties are on pace to exceed last year’s by substantial numbers. While this is indeed a crisis and an unfortunate series of events, from an investors perspective, there is an opportunity for rehabbers to purchase distressed homes at low prices, fix the homes up, and resell on the market at a competitive price for a quick sale to new homeowner. Foreclosures in
4) Interest rates are low, which translates into more buying power for homebuyers. Low interest rates in combination with government programs such as The American Recovery and Reinvestment Act that provides tax credits, help to increase the eligible homebuyer pool.
5) With the economy troubles, the perspective of most may be that there is a limit of available funds for real estate investing. While its true that available capital and funding has decreased from traditional institutions, the fact remains there is a substantial funding available via private investors – many of whom are retirement-age or near retirement and are seeking opportunities to avoid running out of money and diversify assets after getting a huge black-eye in the stock market. Rehabbers and landlords have an opportunity to find those private investors and begin to build wealth for themselves and provide a safer return on investment for the private lender.
I believe that these 5 reasons alone provide a compelling case for why those who have been considering South Florida real estate investing should get off of the sidelines. An investor with integrity and good intentions should see this current market as an opportunity to build wealth and also help many struggling homeowners who have faced foreclosure and are in need of affordable housing options while rebuilding credit.