Florida Buyer Broker
Most Floridians know there is not a shortage, of investment properties.
There is a shortage of affordable, rental housing and affordable homes for primary and second home buyers.
A Bill was recently passed in Florida to help developers of investment properties build more large rental communities. The bill also lifted some of the stringent building and zoning permit timing. The bill provided a large sum of money to developers who would build housing which offered 70 affordable, housing units in their project.
The likelihood of any of these new properties being “affordable” by the time they are completed is not realistic. This is great news for these developers and investors and very bad news for renters. The increase cost of real estate taxes, building supplies, insurance, even mortgage rates (builders borrow money) will only continue to increase the price of new rental and new home prices.
Most recently, Florida also passed a bill to prohibit rental increase limitations on investment rental properties.
As a result of these new laws, Florida developers are now building single family home rental communities an large apartment complexes.
Renters will need to continue to rent or live on the street!
Renters are already paying more than the cost of what a mortgage might have cost a few years ago. Inflation of current rents and living expenses in Florida are high and income levels are low. Florida minimum wage will raise in on Sept. 2023 to $12 per hour. Inflation of basic necessities, like food and gas, make it almost impossible for renters to save for down payments and closing cost to purchase a property. They are likely increasing their credit card debt which lowers their credibility with finance companies which will make it more difficult to pay for a loan in the future if they do borrow to buy a home.
Who is buying Florida Investment Properties?
During the Covid years many secret international buyers purchases investment properties. They funded someone in the US and purchased US investment properties. The properties were purchased with CASH and quick closings.
One very large real estate firm in California bought and flipped properties until the end of 2021. They admitted their valuation system was incorrect and properties did not appreciate 25 to 30 percent in a matter of a few weeks or months. They sold off their inventory of homes. The company had such a large internet presences, it impacted property prices throughout the US. No adjustment was make by real estate agents who based their comparable sales on the inflated prices. Large investment companies continue purchasing homes throughout 2021, 2022 and 2023.
Real estate brokerages have been buying properties from sellers and flipping them to investors.
Smaller investors typically keep a property for 2 years then sell it. Prices in many areas are decreasing and inventory is increasing. Smaller investors in Florida will be selling while larger investors will wait and purchase more properties at lower prices to increase their inventories.
Florida investors are discovering the increase in property values comes with increase in property taxes and insurance rates.
In Florida incomes of annual renters make it impossible for them to pay the high seasonal rates many investors thought they would obtain annually.
Some vacation rental areas in Florida has a glut of short term rental properties waiting for the seasonal renters to come and pay high seasonal rates. This winters seasonal renters should expect to pay even higher rents to make up for the investors losses.
Many of those investment companies will be either taking their equity out of the property via refinancing, then selling. Smaller investors will take their equity. Some may then try to sell via short sales or let the property go to foreclosure.
Many Florida coastal areas where investors have heavily purchased are already saturated with homes for sale.
Some areas are saturated with high priced properties coming on the market creating more competition between sellers to obtain buyers in the winter of 2023.
As interest rates rise, smart investors will look for investments where they can get a positive return on their investments. Especially, if they are getting a negative return on their real estate investments.
Sellers listing agents have confidence in buyers who obtain the services of Florida Buyer Broker a Single Agent buyer agency, serving buyers with integrity, loyalty, honesty, skill and expertise.
Beverly Howe Owner/Broker Loves to talk about real estate with buyers. She is also a 1031 Exchange Specialist and Master Certified Negotiation Expert.
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