Property investors have played a crucial role in South Florida’s recovery from the big economic crash. For the past three years, prices have moved steadily higher on luxury homes in South Florida.
The good news for investors looking to jump in is home prices are still below their peak in 2007. Florida also ranks high in foreclosure inventory with the second highest numbers in the country. This presents a great opportunity for Florida residential real estate investors to buy waterfront property in Ft Lauderdale, rehab it and flip it for a nice profit.
Prices Are Up
To make profits in real estate, you need to spend money. The theory of buying low and selling high applies just as it does for stock market investors. It appears the bottom is going away and prices are creeping up. Coastal areas, such as South Florida, are seeing steady increases on property listing prices. Homes are taking an average of 60 to 90 days to sell. Construction starts and ads for labor construction help are both on the rise.
Other Investors Are Selling
Many large investors have purchased real estate over the past few years. They had the liquidity to wait for the market to bounce back. Now, some of those investors are looking to sell and cash out their significant gains. The bigger stock brokerages have also shifted hefty amounts of money back in the housing market in preparation for the growth season to come.
Lending Is Softer
To raise capital, investors often turn to a niche known as hard money lenders. These non-traditional lending companies provide investment property loans with underwriting based on the value of the secured asset. This differs from traditional lending, which bases its underwriting on the borrower’s financial history.
In the past, hard money lenders were eager to lend inventors quick cash, if they didn’t mind paying 14 to 18 percent for those short-term loans. Just prior to seeing gains in the real estate market, competition between lenders started squeezing their high rates down to the benefit of investors. Currently, a savvy investor could see rates as low as eight percent.
By the middle of September, top commercial real estate experts who gathered in Miami for the CBRE’s 2015 Florida Market Forecast event predicted robust growth in the state’s commercial real estate market, citing increased tourism and the rising population. The experts agreed South Florida is currently one of the best places in the country for investing.
Have you been watching the deals go by as you sit on the sidelines? If you have money burning a hole in your pocket, now just may be the perfect time to strike.
If you are looking to invest in luxury homes in South Florida, contact us. Our Fort Lauderdale real estate agents can help you find the perfect properties.