Within the last month, I’ve been approached by several different investors: some individuals and some groups of investors with millions of dollars looking to buy up as much property as they can and hold it for 7 to 10 years or more. They are looking for long-term buys and want to maximize their cash flow along the way. I’m even seeing private equity groups coming into our market buying hundreds of homes at a time. This is not easy to do. One needs a great contact at a bank with whom they can get the deal flow directly. Trying to buy that many houses individually in this competitive market is not easy.
The individual investors I’m speaking with are in the same boat. They are not interested in only buying one property – they want to buy 10 or 20. Why? It’s simple math, really. The prices are still depressed and undervalued. Rents are strong and cash flows are good. Why have your money sit in the bank, gathering no interest? Here you have a tax benefit of owning real estate, you get monthly cash flow, and you hope for some appreciation when you go to sell your properties in the future.
Oftentimes, investors are scared of the headaches associated with renting properties. That’s a big reason for our success; we offer full property management (as well as sales) and we deal with those headaches for owners. The owner just gets paid every month and they never talk to the tenants! That’s what makes the process go very smoothly and why it’s easy for an investor to buy several properties instead of just one. If they had to deal with all the properties and tenants themselves, it’d be a different story.
I think this is a very good sign for our market. These are long-term buyers who will be able to offer housing for the local rental population. A lot of families were displaced during the foreclosure meltdown and now more companies are creating jobs which are bringing more renters to our market. It’s not like in the past when it was just speculators buying houses to sell to other speculators. That was a smoke and mirrors boom that crashed hard. Investors willing to dump large sums of real money into our market is nothing but positive for us all.
If you’re an investor, don’t wait too long. Prices are already heading upward. They won’t stay this low forever.
Gabe Mellein was voted a Top Real Estate Agent – Exceptional in Service and Overall Satisfaction by Gulfshore Life Magazine in 2012 and 2013. He is the broker of Gulf Pointe Properties, Inc and has over 9 years experience in the SW Florida Real Estate Market. He is a member of The Naples Area Board of Realtors, Bonita Springs – Estero Association of Realtors, Realtor Association of Greater Fort Myers and the Beach, The Florida Association of Realtors, The National Association of Realtors, and is nationally certified in Feng Shui for Real Estate. Need real estate help? Please contact Gabe at: 239.825.2234, Gabe@GulfPointeProperties.com or www.GulfPointeProperties.com