Torcana Investment Blog

Let's face it, we're in a depressed economy. Everyone is looking for greater returns on their investments. Nothing is now as it was. There are lower returns on bonds, the stock market is a roller coaster of uncertainty and it is tied too closely to shaky international markets. 

Investments are always a risk and buying property in Florida is no different. However, there are plenty of positives and profits to be made .... 

Location #1: Why Florida?

Even though the state of Florida has been battered as much as most states by the housing crisis, there are still rock-solid investments in real estate. Economic problems have not changed the fact that the state is still a prime relocation area. There are reasons that it will remain that way: Ocean breezes, temperate winter climate and prime vacation destination.

The Sunshine State is still a draw for young and old alike. Here are a few other reasons it will remain as such:

• There are greater numbers of baby boomers retiring each year. Florida is their golden destination to spend their golden years.
• The population as a whole is more health conscious. Florida offers year-round outdoor activities such as walking, jogging, biking, tennis and golf.
• The state is easily reached from the populous northeast via the I-95 corridor. From Virginia, Maryland, D.C., and New York, the state line can be crossed in a day by vehicle. Multiple airlines have continuous flights in and out.

Location #2: Why Orlando?

There are cities in Florida that have felt the crush of the housing decline to a maximum. Others, such as Orlando and Miami have sustained themselves rather well. But Florida properties have never lost 80 percent of their value in a day, such as certain stocks. The trick is to find a city that offers growth potential but has not been dealt a crippling blow by economic circumstances.

• Banks will be more ready to lend in areas that have lower foreclosure rates.
• Prices on real estate are, in many cases, at a 10-year low. People are buying property in Florida for lower than the original construction price.
• Cities are ready to move forward and improve facilities and neighborhood areas. Look for a progressive municipality with low crime rates, long-term plans for improvement and incentives for drawing business and industry.

Location #3: Which neighborhood?

There are very good prices on homes and rental property in depressed neighborhoods. The drawback is -- they are depressed neighborhoods. Investing in such an area could be disastrous. What to avoid:

• Areas with new housing and a high foreclosure rates. Developments built only a few years prior to 2007 have a high number of homeowners underwater in their mortgages. Target communities that are 10-20 years old. 
• Beware of unkempt landscaping, peeling paint, potholes in community roads, unfinished amenities and developments with scarce and unfinished homes or apartments. These areas have less creditworthy occupants, more transient owners and high maintenance costs. Renters will likely neither be long term, responsible nor stable. Rental income will be less reliable and periods between tenants may be long.
• Properties in such areas will take much longer to stabilize, will attract crime and irresponsible behavior and short term returns will be shaky. Such real estate is usually a bargain because it's such a high risk.

• FHA financing to appeal to owner occupiers once the investor is ready to exit the property.
• Low vacancy levels in the neighborhood indicates a stable market and responsible owners and lessees.
• High owner occupancy creates a responsible neighborhood. High absentee ownership can lead to community problems.
• Low levels of rental and mortgage delinquency are indications of a stable real estate area.
• Well-manicured landscaping, building and street maintenance are further indications of a solid investment.
• Commercial areas, hospitals, schools, libraries, parks and other recreation facilities in walking distance are a draw to owners, renters and increase long-term occupancy.

Finding a solid real estate investment in Florida now will ensure healthy short-term gains and a long-term profit when exiting the investment.

Housing values will increase and Florida properties will be leading the way.
 

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Now is the time to invest.
 

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Florida's natural beauty, climate and tourist appeal will continue to draw an influx of buyers and renters.

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Regards

Colin Murphy