Buying Investment Properties in Florida

Investing your money into a market that has the potential for a sizeable profit margin is what we are all looking for. If you think you missed out on the housing industry, let’s look at some details of what actually happened over the past several years and what is projected for the Florida market. Buying investment properties in Florida is a golden opportunity right now.

From 2003-2004, Florida real estate emerged as one of the hottest markets in the nation. Prices quickly began to soar as developers and contractors started investing. By 2005, property values had appreciated by 45% in one year. No one really looked at the obvious end to the price escalation and everyone was buying high in fear that they would never again be able to afford a home in Florida if they didn’t. Builders were backlogged with two years worth of work.
The market began to slow down in 2005, but the buying frenzy continued until the bottom finally fell out in 2007. The ease of obtaining a mortgage only added to the amount of purchases. By the time the dust settled, the foreclosures and short sales began to drive the prices downward. Homes that were valued at $250,000 just a few years ago, were now selling for $80,000, which brings us to where we are now.

The pendulum has swung both ways and now is the time to invest before the market makes its second climb. Sales for 2009 have already increased by almost 40% over last year. Prices are still well below value, but as buying trends continue, prices will eventually balance out with the true replacement value of the homes. This is where the smart investor can take advantage of the current pricing and profit from it. Obviously if you can’t build a 2,000 square foot home for $80,000, the market has overcorrected and will balance out in upcoming months.

How to Get the Best Investment Deal

Short sales used to be a time waster. Recently, banks have begun to use short sales as a way to avoid costly foreclosures. This is the reason why many homes are still occupied by individuals who have not made a house payment in months. Foreclosures can cost the bank as much as $50,000 and they are in no hurry to lose money. As soon as the market begins to pick up and home values increase, short sales may pick up speed.

This is only one option. There are plenty of good deals to be found right now. Depending on when a seller purchased their property, you can still find excellent pricing from a ‘for sale by owner’ deal. If the property was purchased before the sharp increase of 2003, you may be able to purchase at a good price.

In order to obtain the lowest price in today’s market you should search every option, including short sales, REO’s, the MLS and even buying at the courthouse door.

According to the National Association of Realtors, the lending crisis is almost past and the rest of this year will be about cleaning up the mess that was caused by it. Homes are at the lowest prices in ten years but are expected to increase within the next several months. Now is the time to invest.
Whether you are looking to invest in Florida properties to resell or to hold on to as rentals or personal retirement, it is a good time for buying investment properties in Florida.