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BEST FLORIDA SOUTHEAST BEACHES: Palm Beach, Broward and Dade County
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TEN GOOD REASONS TO BUY OR INVEST IN FLODIDA.
1. Florida Is An Established Real Estate Market
Fewer risks are associated with real estate investments in established markets as opposed to newer, emerging markets, although this security is often accompanied by higher property prices. The recent downturn of the US real estate market has created a unique position for investors, featuring some of the lowest property prices seen in years. These bargains have created an established market where the cost of housing is mirroring some emerging markets.
2. Florida Has A Strong Economy
The strength of the local economy provides additional stability for Florida, where the local economy is considered to be one of the most advanced in the entire country. The diversity of the economic activities across the state extends well beyond the tourism sector, with transportation, construction, education, healthcare and business facilities producing excellent overall results with economic growth.
3. Florida Features Excellent Buy-To-Let Opportunities
Investors are keen to take advantage of the excellent buy-to-let opportunities in Florida, enabling the additional benefit of having a holiday home in one of the world’s most sought after destinations. The attraction of the Disneyland brand has greatly assisted in the appeal of Florida to holiday makers, which can be seen clearly from statistics by the World Tourism Organization.
4. Florida Has A Superior Tax Position.
Florida has no state income tax. Moreover, the state does not impose any property tax.
5. Florida Provides Steady Capital Growth Potential
When comparing a real estate investment to stocks and shares, any downturns in the market occur with considerable less severity. Viewing how Florida has fared overall following the past 2 year downfall in the real estate sector, investors are continuing to consider entering the market, as Florida’s position has fared considerably better than the country as a whole. The future outlook for real estate in Florida almost guarantees a steady growth market, providing good capital returns and yield potential for early investors.
6. Florida Is Protecting Your Peace Of Mind.
6% Florida Property gain 'beats the pants off' a 10% stock gain in actual return on investment by a wide margin. Owning good, solid Florida Property allows you to sleep at night, or go on an extended vacation without worrying about your asset column. This is directly opposed to holding a substantial percentage of your assets in stocks.
7. Florida Features Multiple Exit Strategies
The strong and continuous demand for real estate in Florida provides an ideal position to buyers when considering their exit strategies. Foreign investors are at a distinct advantage as improvements in the country’s economic issues over the coming years will draw additional buyers to re-enter the Florida housing market.
8. Florida Is The 15th Largest Economy In The World.
Florida boasts of being the world’s 15th largest economy by generating 32000 jobs from the aerospace and non-mineral fuel industry only.
9. Investing In Florida Is Limiting Your Exposure To Risk
Banks incur little if any risk when loaning money on Florida Property due to the steady, solid growth rate of the property market, as well as the fact that if you default on your payments they will simply sell the property to somebody else. This is in direct contrast to the volatile stock market, which can vary daily with sharp increases and decreases in value. Furthermore, banks realize that a property isn't going anywhere, whereas many investors know all too well about .com and other types of companies that were there yesterday and gone today.
10. Over 1000 People Relocate To Florida On Daily Basis
People are relocating themselves to Florida due to its beautiful beaches and excellent job opportunities. This alarming number is more than any other state has.
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REAL ESTATE INVESTING IN FLORIDA
HOW AND WHY INVESTING IN FLORIDA?
Hereby, the real picture of Florida real estate market and what offer it has for an investor. First a comparison with other methods of building assets would allow us to understand that why it is such a productive and lucrative form of investing. Hypothetically, many investors may proclaim that they want to invest in into the Florida Investment Property market especially making allowances for the current stock market fluctuations and the HOT market for investment properties. Obviously, they still have to know the actual course of events about the Orlando property investing and the role of sale and leaseback method of property management.
Do you by any chance remember the last time your financial advisor or stockbroker convinced you to invest or move a portion of your assets into the Florida Investment Property market? Did he tell you that it might be a good idea? Perhaps never because it is quite simple as he works for commission and investing in Florida Property disappointingly brings them no benefit or commission at all. Most likely, the dispiritedness drops your interest, which may be deliberately not built and probably never let; an 'apples to apples' comparison of stocks versus Florida Investment Property quite like the one you will see here.
The first reason is Leverage. We do know that in order to finance we borrow money hoping to make more and rely on it to make enough profit to cover the interest payable on the loan or simply the banks create a situation we call Leverage. Banks are typically more interested in investors who invest in real estate than to loan money to buy stocks. Banks do not take risk for a dead investment or failure to get their interest back. They loan money to buy Florida Investment Property to create an opportunity to gain more profit. Property Investing in Florida has always have remained controversial among the investors as some feel that an average of 10% with little effort from stock is better than to invest in Florida Investment Property that only appreciates 6-7% per year. Suppose you take the above statement to be true and compare the REAL numbers, the stock investing is still less than the Florida Investment Property investment. Therefore, it is obvious and simple to compare both investments and realize which one provides a greater immediate return on investment. Moreover, there is not much take in on any income from your property during the course of the year, or the substantial tax advantages to owning property, which is what we will discuss as well.
The second reason is value of the property. As we discussed earlier that for example investing $10,000 into purchasing stocks as compared with Florida Investment Property, using the leverage of mortgage and your investment, the worth of Florida Investment Property will be higher. What you have to do is just find some excellent deals to invest in Florida. Other probability, which is worth taking under consideration, is that you purchase a $100,000 property that comes to a worth of $110,000 the same day you buy. Many would say does it happen. I would reply yes, all the time. Keep your self updated and well informed since in real estate investing information is everything that makes you a king.
You should go through the numbers to find good deals, as they are lying around you. Next question that would strike your mind probably would be that does anybody sell $110,000 worth of property for $100,000? Yes as many people want to sell their properties on immediate basis and the reasons are endless but just to name a few: job relocation, divorce, an estate being settled, current appraisal on the property not done prior to selling etc. are ideal deals you have to find that will accomplish two things. Firstly, more money added to your asset column in the form of equity and secondly additional LEVERAGE you have created for yourself as the property increases in value. One thing you must have figured out by now is that you do not make money in Florida Investment Property when you sell, but when you buy.
The third reason is superior tax position. United States tax code gives many benefits to investors who invest in real estate and make housing and other property available to the population. Florida Investment Property gives the investor best tax positions in the business world and the advantages are one of the main reasons. Another benefit is that all of your interest payments on this property are tax deductible. In addition, depreciate the property itself and all of its contents for additional tax advantages. It is possible only if you choose. Tax laws for Canadian investors are not different from Floridian investors. They all share same tax laws and for the Canadian investor it greatly depends on staying in Florida or if there just on vacation. The values are assessed and the taxes are levied on them that are around 2% of the selling price. For those investors who have mentioned that this will not be their primary home may not benefit from Homestead Exemption. Homestead Exemption has been increased to $50,000 however, if the property is used as an income producing property. We can see more Canadians buying in Broward than ever before. One of the reasons is the decline of the dollar and the other reason is that prices are much better today than two years ago.
Florida Investment Property market has dips as well as any other investment has but they are much less dramatic than that which can take place in the stock market, proven out by the banks' willingness to loan money on property. In order to Protect your peace of mind finally we understand the value of leverage and realize that a 6% Orlando Investment Property gain as compared to a 10% stock gain in actual return on investment by a wide margin which is approximately 50%. If we take into account, several other factors that can increase this number. Other factors include such as tax advantages, income on property etc. Florida Investment Property is solid and sound that gives you the liberty to sleep at night, or take an extended vacation with trouble free investment and a stable asset column.
Let us now talk about some other facts such as housing bubble bursting, market crashes, what are crashes and bubbles. A bubble is a type of investing phenomenon and a bubble occurs when investors put so much demand on a stock that drives the price beyond any accurate or rational reflection of its actual worth. Investing bubbles often appear as though they will rise forever but they eventually pop and the money that was invested into them dissipates into the wind. A crash is a significant drop in the total value of a market, creating a situation wherein the majority of investors are trying to flee the market at the same time and consequently incurring massive losses. In an attempt to avoid more losses, investors do panic selling during the crash. This panic selling contributes to the declining market.
Bubbles and crashes relationship is similar to clouds and rain relationship. No clouds no rain and bubbles are like clouds and market crashes are like the rain. Another important point that needs to be understood is the distinction between a crash and a correction. Generally, the rule followed is that a correction should not exceed a 20% loss of value in the market. Surprisingly, some crashes have been labeled as corrections not correct. It does include the distressing crash of 1987. After being acquainted with bubbles and crashes definitions, we now can take a look how they occurred throughout history.
There was a decline in market from peak to bottom. For example, land that could be purchased for $800,000, within a year, is resold for $4 million. This happened before crashing back down to pre significant increase levels. The prices were so excessively high that to buy a condo-style property in 1926 would have had been the same, as you would now pay for a luxury home. In 1920, Florida became the popular destination and residence option for those who did not like the cold. The population growth rate increased and housing couldn't match the demand. People began pumping huge amounts of money into the real estate market as the prices doubles and tripled. Land prices quadrupled in less than a year and in result, the sellers realized the bubble and simultaneously recognize the warning sign, and panic selling ensued. In this situation with more sellers and very few buyers, prices came down with a sickening thud and then crawled down even lower. If we do a synopsis of situation in 1920, it was only natural that people were beginning to believe such prosperity was infinite. Moreover, the real estate market was the recipient of a bubble not stock market.
The biggest market crashes in history have remained the main causes of the explosive growth in prices. In order to understand the housing bubble and its effects on home valuation, involves understanding the reasons why prices increased in the hottest areas. The inflation in home prices has been the result of the culture of the real estate sales and lending industries as the lending and sales side of the housing business are not too well regulated. Regulation and investigation absence dredge up some of the seamier practices in the field. More talented real estate professionals are present where there are more investment options and much money can be earned.
Florida is that such state and the news spread about the newer boom areas in Florida. This means rising prices in emerging markets other than traditional hotspots. The influence of big commissions has been pervasive in the real estate market. Looking at the various studies of overvalued real estate markets supports this hypothesis. The more mature markets of Santa Barbara and Miami made it to the top ten of the overvalued real estate markets. Since they are markets that are more expensive and traditionally, expensive markets have a higher entry price and the other side is that they are more remembered as for what happens after a housing bubble.
If we look at the market analysis reports from 2003-2010 the real estate news today are that things are starting to head up and lookup for the Florida real estate market. This hot market is heating up, we can see the smoke before the fire, and the smoke is starting to rise as the flame begins to ignite. Housing slump is at its peak, but inventory is steadily decreasing and home sales are beginning to increase. If we take peek at other metropolitan areas, such as Broward County, Dade County, Palm Beach, Naples, Myers, Miami, and Fort Lauderdale, the numbers of sales have increased while the absorption rate has decreased to at least half of what it has been previously.
Florida real estate market has been traveling in the past two years. When all of the shuffling and the inconstant movement are kept in mind, most of us plan to wait for the smoke to blow out and the fire to blaze again. However, here the things are vice versa so there is no need to wait for a whistle to blow to realize that the time has come to buy or to make an investment in real estate. Values have dropped from the unrealistic level to realistic in Florida and prices have corrected technically. Although, prices are still a bit more in South Florida due to the super real estate bubble after 9-11. Yet sellers think they should wait and get those once-in-a-lifetime frenzy opportunities but bubble prices will be explode in for a big disappointment. The prices we are seeing now when compared to the income made by the average wage earner in Broward County is making sense now. Just the way they were making sense in the 70's, 80's, and 90's. Moving to Florida is the best option now because it has always been affordable. The prices are expected to remain normal and affordable for a longer time. Short Sales, foreclosures, new appraisal standards and conservative lending standards are supposedly going to hold prices. Eighty percent of foreclosed properties were never listed for sale before they became foreclosures because the seller prices realistically were too high.
Now let us discuss Pre-foreclosure period. In order to understand we must first be acquainted to foreclosure.
Foreclosure – FCL means when a homeowner is unable to make principal and/or interest payments on his or her mortgage. In this situation the lender, bank, or building society, can seize and sell the property. This is stipulated in the terms of the mortgage contract. In some cases, creditors go for adjustments to the repayment schedule to allow the homeowner to retain ownership to avoid foreclose. This kind of situation is called a special forbearance or mortgage modification. Foreclosure begins when a lender files court action and records a notice of a pending lawsuit against the borrower in Florida. The lender has to notify the borrower and any other affected parties in person. In some other cases, mail or publication mediums are also in use.
If the borrower fails to respond the court action within a specified amount of time, the county clerk declares the borrower default and the lender then requests the court to make a final ruling. If the court ruling does not go in favor of the borrower, the total amount owed to the lender and the foreclosure sale date gets included in the ruling. State law does not make it mandatory for the lender to notify the borrower before initiating the foreclosure process. However, individual mortgages or deeds of trust might call for this. The foreclosure can be stopped up until the date of the sale by auction.
Generally, the sale date is 20-35 days after the court ruling. Notice of sale containing the location, date, and time of the sale is issued by the court clerk and is published once a week for two weeks. Second notice appears at least five days before the sale. The sale ordinarily occurs at the county courthouse at 11:00 a.m. on the sale date. The court clerk oversees the sale and the winning bidder deposits 5-percent of total amount. Remaining balance is to be paid by the end of the day. If the balance is not deposited a new sale is scheduled a minimum of 20 days later. The winning bidder acquires the certificate of sale after a successful bid. The ownership is then transferred to the winning bidder within ten days. In most instances, a borrower looses rights of redemption after the certificate of sale is issued to the winning bidder.
Short sale in real estate occurs when the seller owes more on the property than it is worth. If he fails to pay the difference, bank accepts less than a full payoff for the amount owed. Banks do not lose much money on short sales than they lose on foreclosures and accept a short sale. Keeping the sale price close to the current market value of the property makes it appear that a foreclosure may likely be able to happen. The amount owed is not the determining factor that the property is worth less than what is owed, and that the seller has a serious financial loss for example loss of job, business failure, severe illness, inheritance, divorce, mandatory job relocation, medical bills, military service, payment increase, insurance or tax increase, reduced income, separation, too much debt and incarceration. Real Estate Owned – REO means property owned by a lender. In most of the cases it is a bank, becomes owner after an unsuccessful sale at a foreclosure auction. Most of the properties for sale or auctioned are worth less than the total amount owed to the bank and the auction price is same, as the amount bank has to recover. This is one major fact that real estate investors form Canada can take advantage from. These properties can be bought at a discount to its market value.
Preventive foreclosure measures should be applied the moment you receive foreclosure notice. Contact the lender's Loss Mitigation Department and let them know about your financial or other ill situation. Furthermore, the best way to prevent a foreclosure is to start before you even receive initial notice. This situation also gives way for the investors to buy such property cheaper then the real market value and this is where the Canadian investors can take advantages.
The downward price pressure has stopped for most of the market so if you are buying to hold, better do at least 2 years NOI, and remember to make through the Negative cash flow. If you have the means to carry negative cash flow, buy into a crash. At this point, almost anybody who can invest should invest in Florida, even without much money. As always, Florida is seen as a veritable Utopia. Investors invest and buy for the values and homes are subject to be sold easily and in less amount of time. A typical foreclosure with minor repairs has multiples offers and it is true with the short sale. So all buyers out there should buy and invest now before the prices go up and this is once in a life opportunity. The key to investing is all about the exit, one of the basic rules is, have an exit before you enter, and have another exit if that does not work. If you only have one exit in your deal, you are making a mistake, the key to this game is following the rules, and the rule is that busts do not follow booms, booms follow busts.
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