Real Estate industry has its own attractions and that’s the reason it secures its position in top 5 best investment strategies for the long term. Florida has also faced a good hike in the real estate business by keeping its median price high for the past few years despite natural disasters faced by it. If you are thinking about investing in Florida real estate, it’s a great decision. To help you further with your investment decision, here are the top 5 tips to keep in mind to find the best real estate property in Florida for investment.
1. Define prerequisites before hunting
Florida is Sunshine state of America and each city has its own value. When you are buying a property for investment, you need to decide a few things before actually start searching property. The first thing you need is to define your maximum budget range. Once your budget is defined you need to finalize how you will get ROI from your investment. Will you make a motel or a rental apartment to earn monthly income from it? Or will you wait until market rates go high for the plot and then, sell it. These two things, budget and investment plan, need to be defined first.
2. Think Long Term
Many people think to get rich overnight, but this is not possible with investment in real estate. You need to think of the long term benefits. Thus, don’t believe in claims such as this Florida property will double the rates within 6 months or so. Whenever you are considering a property, think about its present value along with the Net Cap Rate of the property. This will help you in taking a decision based on facts instead of speculations.
3. Selection Criteria
Each investor has its own selection criteria and it can vary from investor to investor. Defining clear criteria for investment in prior will narrow down search and make hunting faster. Some of the common criteria are median rate, property type (plot / existing house / new construction), forecast value after 5 years, locality, economy of the city, etc. You should make a clear picture of the property you are willing to buy.
4. Make full use of technology
Use internet and online real estate listing websites to find expected property in Florida for investment. You can not only see the listing, but also hire a realtor in Florida who is experienced enough to help you the best property for investment in Florida. When considering a real estate agent for hire and a property for purchase, please make sure to use technology in your favor for verification. Read reviews, ratings and all available details about the property you are considering for purchase.
5. Keep Financial Rule of Thumb in mind
While considering a property for investment, keep “Financial Rule of Thumb” in mind. If you’re unaware of it, let us share it in your goodwill. There are three important “Financial Rules of Thumb”.
- 70% Rule of Thumb
It means the maximum property value is the 70% of its after repair value subtracted from its total repair cost and this is the value you should pay for a property.
- 2% Rule of Thumb
According to this Financial Rule, the rent collected from the bought property must be 2% of its total purchase cost.
- 50% Rule of Thumb
This rule state that 50% of your income generated from the property will be spent on expenses.
Keeping these three rules in mind will help you buy the best property which will generate adequate cash flow and will provide profit after all expenses.
These are the top 5 tips that will help you in making your investment profitable.