U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > U.S. Forums > Florida
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 12-04-2006, 05:14 AM
 
3 posts, read 8,156 times
Reputation: 10

Advertisements


Hi to everybody:
Although I posted a similar message in a discussion related to Sarasota, And because we think in investing in a property in the USA, let me post the same message in a more general way:



French (Nobody's perfect Retired (Again) and active having lived many years in England (I loved it but the weather ) and in Hawaii (We loved it too) we just decided to visit Florida. We arrive in Tampa on Dec19 and leave on Jan 7th.
I read a lot (books, forums) and booked an hotel in St Pete for 3 nights.

Having some cash in $ to invest (Not a lot but some) and looking for getting more steady income we will look for buying a condo or appartment locally. Then rent it (Either permanently or part time if we use it as well from time to time)
Having been in touch with several realters, renting agencies and owners, having received many renting offers for this present stay, my intention is to visit several condos around Sarasota (Which seems a nice place to many people) and rent one or two for 2 weeks.
We will then spend our time between normal tourism (Hiking, visiting local attractions, museum, sites, sunbathing...) and meeting realters and owners.

As far as investing we are less enthousiastic than we were because 2 points emergent through our researchs:
Some professionals foresee a drop of 20% in propery value for the next 2 years!!!
When one compares the money to spend to maintain a condo (Tax, maintenance, repair, fees to a local rep..) and the renting revenue, the profit is zero or marginal. Once again we are not looking for investing then waiting for property price to increase and resell, BUT making extra money to add to my present pension.

Sorry for these long explanation and now my many request today:
1° Feel free to give us any hint for what we should see when around your palce (I have many books already and we will of course visit the local tourist offices when we arrive)
2° Although we have some offers (Condos for rent) any new one is welcome (1 clean 1bR/1Bath in a quiet place is ideal)
3° Should we forget about investing in properties for getting extra income? Any person to meet and talk about it welcome.
4° Any person to talk to, about other ways of getting extra income in the USA is welcome as well.

Congratulations to anybody getting to the bottom of the present message
Rate this post positively Reply With Quote Quick reply to this message

 
Old 12-04-2006, 06:18 AM
 
Location: in the southwest
13,395 posts, read 42,171,950 times
Reputation: 13461
Quote:
Originally Posted by Reece4183 View Post




French (Nobody's perfect
Our older son is a French major in graduate school.
Quote:
As far as investing we are less enthousiastic than we were because 2 points emergent through our researchs:
Some professionals foresee a drop of 20% in propery value for the next 2 years!!!
I think this is true. Could be even longer.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-04-2006, 06:20 AM
 
Location: western East Roman Empire
8,067 posts, read 11,868,249 times
Reputation: 8067
You've already answered your own question concerning real estate income: the yield hovers around zero due to high buy prices, high taxes, high insurance (and that does not include maintenance) and rents are low relative to these carrying costs (the buy/rent ratio is way in favour of renting). In this context, you are better off in short-term CDs right now.

Generally speaking, hot markets in the US such as most of Florida, California, Arizona and the northeast, are overpriced because of the credit bubble and in many areas there is a glut of supply because of over-construction.

You may find a viable investment in the Sarasota area, one of the regions of Florida where prices have come off the most in recent months, but, as you yourself already mentioned, they may come off another 20%, maybe even 30%, in the next two years or so. So you either need to know the area very well yourself, or you need a close relative or friend, or an honest real estate broker, but most real estate brokers are dishonest, so be very careful.

On the contrary, I would think you would have a better chance at capital gains in a few years: the value of the dollar continues to erode as a real estate prices stagnate or drop, so it may provide an opportunity to buy using euro or pounds; then, as foreign exchange cycles usually run over several years, there will be in future another round of strong dollar years, relatively speaking.

So investing in Florida real estate, buying in the next 6-18 months might be a good capital hedge, but for current income it is not a viable idea right now in most cases in Florida.

For the moment, you are doing the right thing by researching and looking, but you should probably wait at least another six months before buying - maybe a year and a half - and in the meantime examine carefully the reasons (current income vs medium-term capital hedge) while you park your money in some relatively safe instruments with a half-way decent yield.

Good luck.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-04-2006, 06:20 AM
 
1,418 posts, read 9,645,284 times
Reputation: 926
I'd stay away from investing in a condo that you intend to rent. Seems like every European has this dream of owning condos in Tampa or Orlando and renting them to someobody. But who? Right now there are too many people trying to rent single family homes that can't even cover more than 1/2 their mortgage. Condos have huge maint./association fees, not to mention the mortgage payment.

In the Orlando Area, the Condo pushers have stooped to hiring sexy looking girls to stand on street corners waiving signs saying "condos for sale". They continued to build condo high-rises and low-rises even when it was so obvious that the only people buying these things were investers! Now, they can't even give these lead baloons away. I suspect the same is true in Tampa.

The bottom line is this. In Orlando, Tampa, and Jacksonville are family oriented cities that cater to families with children. Everyone wants to own their own single family home. No one wants to raise kids in a condo. In Tampa and Orlando, we don't have many retirees. We don't have many young single 28 year olds that can afford to pay $300,000 for a condo and then pay $300/month association dues on top of their mortgage, taxes and insurance payments. So, WHO, is actually living in all of these condos? Maybe rich, middle aged men and women who never got married (because if you're divorced, chances are you ain't rich!).

Then, what happens when the bottom drops out of the condo market and investors are letting the banks take them back, even when they lose over $100,000 "equity"? Lets say you have a 29 story high-rise condo that is only 50% occupied. Who is going to pay all of the maintenance costs for those unoccupied units? It still costs just about the same amount to maintain a condo, regadless of how many people live there. Yep, your maintenance fees double, just when you realized maybe you shouldn't have bought that condo.

When people are paying $80,000 for a 2br/2bth condo high-rise unit in foreclosure, that's when I might consider investing in condo units. But, until then, I truly think there will be many unhappy investors.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-04-2006, 01:35 PM
 
3 posts, read 8,156 times
Reputation: 10
Thank you to each of you.

May I ask, what about investing in an appartment, in some place where people work instead of a tourist area?

Reece
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-04-2006, 01:47 PM
 
29 posts, read 119,712 times
Reputation: 27
Quote:
Originally Posted by Reece4183 View Post
Thank you to each of you.

May I ask, what about investing in an appartment, in some place where people work instead of a tourist area?

Reece
I personally don't see real estate in the united states as an investment opportunity right now. I think you should wait and see what happens over the next 6 to 12 months. I agree with the person that said you are better off in a CD right now. If you are stuck on real estate, look to another country, maybe India; their real estate markets are seeing similar booms to what we had, though I don't know where in the cycle (beginning, middle, end) it is; I just know that some of my colleagues are profiting nicely from it.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 12-04-2006, 01:57 PM
 
1,418 posts, read 9,645,284 times
Reputation: 926
Appartment investments can be decent long term investments, but several warnings.

1) They are work! You need to market the units, lease the units, run credit checks, have people in place to make repairs, deal with tenant problems, and best of all, you need to be able to evict tenants efficiently.

2) Appartments run at a premium right now, so you don't think you're going to get 80% financing and expect to pull any money out as income. If you finance less than 50% you will be able to pull out income - of course, your money will be tied up for years, so don't forget the opportunity cost in your calculations.

3) If you're a "softie", then don't become a landlord. As soon as someone misses their rent payment, you need to have a methodical way of delivering notices, and then evicting them. If you can't sleep at night when a pregnant mother of 3 crys about her last boyfriend who left her, stole all of her money and that's why she can't pay the rent this month - you better reply "here's your 3-day notice, read it and comply please, or you will be evicted.

4) Older appartments have plumbing and electrical issues, among others, and you can plan to at least have to re-plumb the place. New appartments are what I call "sawdust tinderboxes". If you've ever watched one of these things being built, you'd be affraid for your life to let anyone smoke within 10 feet of the thing. Also, after 7 years, plan on a complete re-build of all exterior surfaces due to wood rot.

The real value is in the land - cities and counties hate rezoning land for appartments. Too much stress on the schools; not enough tax revenue. So, they tend to appreciate as investments, over the long term. Just make sure you have the staying power, or you will lose.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Settings
X
Data:
Loading data...
Based on 2000-2020 data
Loading data...

123
Hide US histogram

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Florida

All times are GMT -6.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top