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Posted over 12 years ago

Exit Strategy: Real estate investment that maximizes appeal to home owners

Real estate optionI have always believed in the simple principals of property investing: purchasing in the best location your money will get you, buying at the bottom rather than the top of the cycle, crunching the numbers properly and carefully understanding what due diligence is necessary and how to do it.

Over the long term, real estate that adheres to these principals has proven to be a strong wealth preserver, a steady income earner and a smart hedge against local inflation. I´m not suggesting that people should allocate a large proportion of their wealth to real estate. However I certainly think it can safely be considered as a valuable addition to a balanced portfolio.

Track record

I have been active in the distressed real estate market in Florida ever since it first appeared. That being said, I´ll never know the market as well as a local.  

Track recordBecause of that I think it´s vital to work extremely closely with established partners who grew up here, know the industry inside out and have a lifetime of experience to draw from. That experience has probably saved me tens of thousands of dollars over the years.  

Recent Trends 

Monthly sales figures from the ORRA illustrate that buyers have been relentlessly snapping up inventory at record low prices and at a pace exceeding the boom times of 2005 and 2006. Demand is way ahead of supply (for example, sales of Florida condos are up 63% year on year).

An inevitable consequence of this is that quality inventory is very tight and prices are rising in some sectors. Inexperienced buyers are beginning to lower their standards and are making the same old mistakes all over again - i.e. buying in the wrong place at the wrong price and failing to carry out essential due diligence.

Getting it right first time

Getting it right first time

It doesn't have to be this way - getting the important aspects of purchasing real estate right is not rocket science. The most important thing to remember is that future investors are not your exit strategy. Investors are certainly active now but they will probably be dormant, selling or buying somewhere else in the future. 

Owner occupiers, first time buyers and second home owners are your future buyers and that is who you need to keep in mind when you´re purchasing now. Figure out what these people want and you´re well on your way to making a profit.

My real estate strategy revolves around selecting properties that adhere to both what I as an investor would like (wealth protection, income generation, inflation hedge) and what a future home buyer will want (great schools, solid infrastructure, low crime rate, recreational activities, realistic access to bank finance and a well maintained and funded local community).

So there you have it - find a property that matches an investors requirements today and a home buyers tomorrow. I´m not saying it´s easy - but if you can do it, then rental income should be more reliable and resale opportunities more abundant.  


Comments (2)

  1. Many thanks Johnny, glad you enjoyed it and couldn´t agree more with your sentiments.


  2. I agree with your article. This is an excellent time and opportunity for investors and will be into the foreseeable future.