22 Aug Craig Feigin insight to South Florida real estate and tourism.
South Florida real estate market was at it’s highest in 2006 and have been falling steadily ever since then-until now. For the first time in nearly 10 years, the price of real estate in Florida is slowly increasing; in November of 2014, Freddie Mac named Florida as one of the most improved housing markets in the entire country. Combined with an economy beginning to slowly recover from the disastrous recession (or depression) that began in 2008, this makes it the perfect time to invest in Florida realty. Not everyone benefited from the ‘crash’ like Craig Feigin did after 2008, but there are still methods to building wealth with real estate.
The investment axiom known by many, “buy low and sell high” and by Craig Feigin is especially important due in our current economic conditions. As real estate prices rise, the likelihood of “buying low” is decreased. Conversely, if this trend continues, Florida property will give you a good opportunity to “sell high” in later years, as barring events such as 2008s market crash, real estate values tend to increase; meaning that the less you spend now, the more profits you will make tomorrow.
Property is usually a long term investment, so take advantage of this by letting your property work for you. As the job market recovers, people that were forced to move back into their parents homes or rent substandard apartments are going to be seeking places to rent. Hence, the term a “renter’s market,” so you not only get the best prices from your tenets, you also have a good chance of filling all your rental properties.
Currently, the best place to take advantage of long term renting is in the Tampa-St. Petersburg-Clearwater area. The average home price in this area is $78,000, but the average monthly rent is $1,270. This means that a piece of property can earn you an astounding 20% or more return on your investment (minus the cost of property taxes and other tertiary expenses). Believe it or not, Orlando may be an even more lucrative opportunity.
Although the average home price in Orlando is higher than those in the Tampa-St. Petersburg-Clearwater area ($170,000) and the average rent is similar ($1,250), this still gives you an 8.7% return on investment. You might be wondering how such a lower return on investment makes Orlando a good investment opportunity. The short answer: tourism and short term rentals.
We discussed ways the improving economy is raising the price of real estate and rental properties, but we left out one of the tertiary benefit of a rising economy: more discretionary spending. As people make more money (and have a less perceived risk of losing their job), they will have money left over for recreational purposes-including taking vacations.
You can actually see a person who inherited money from her family and invested 250k with Craig Feigin. Their primary investment was hard money loans to people who were buying properties exclusively for the use of short term vacation rentals. You can see that review from the happy investor here:
Florida is such a popular vacation spot that tourism and hospitality are its number one industry. This means that Florida hosts a lot of visitors each year, and thanks to the rising economy, is preparing to host more. Visitors need places to stay-places like your rental properties. And an increase in visitors means another opportunity for a “renter’s market.”
In a state known for its tourism, Orlando stands out for its ability to attract tourists.. Craig Feigin’s property in Orlando brings in rent 4 times higher than the surrounding properties since Feigin rents directly to tourists for short term stays. Known as the vacation capital of the world, each year Orlando plays host to millions thanks to attractions like Universal Studios and Walt Disney World. The exorbitant prices of Walt Disney hotel rooms (not to mention food and other necessities) makes renting off-park more attractive to some families; this means that you can charge as much as $100 or more a night and still be hundreds of dollars cheaper than a Walt Disney World hotel. Of course, prices fluctuate throuoght the year; you will make the most during tourist season, but the steady flow of tourists mean that you will most likely never be without renters.
The current state of the economy makes getting in on the ground floor of a rental property a great investment. Over time, your property will increase in value, enabling you to make a tidy profit when you eventually do sell it. In the meantime, you can take advantage of the rising economic conditions and play host to tourists-making it an even better time to buy.