This is the year of the Real Estate investment and not only that is the year of growing and getting wealthier and wealthier! The general consensus is that is going to be as last year a year of sellers (and if you want to know more of why is that and how it will help you go over here), but that also means is the year a lot of people will let go of properties you can take full advantage of, to put your money into the deals that really work and hold them into a positive passive income, but is it all focused on South Florida? Not really, but this specific area is growing into the list of cities to keep an eye out for this year as this Real Estate market expands and moves onto bigger and better projects.
First there’s a big thing to consider and that is the fact that this particular area of the US is very hot when it comes to immigration as South Florida can hold home for thousands of spanish-speaking people to live in and most important work in, but not only are they the ones who are coming so are bigger countries with even bigger wallets such as Canada, China, and Singapore being the leaders of this movement in which they come here to invest on properties to profit from, in the long run, taking advantage of the qualities of this market, so since it’s going to be a year of sellers there’s a few things to consider: there’s going to be more competitive and there’s going to be more money at stake which only converses into more wealth and therefore a far better business for those who have the money in their hands and are willing to go as soon as the deal shows up, so is it really a year of sellers or is it a year of cash buyers? Let’s dive into the signs that indicate that this is the year in which you should invest here in South Florida.
Number 1: Ranking in Markets to keep an eye out for!
According to the PWC’s Emerging Trends in Real Estate for 2018, Fort Lauderdale and Miami are both in the very top 15 Cities to keep an eye out for this year since their investments sinces to be growing in comparison from previous years, as now Fort Lauderdale occupies a very prestigious spot in the list as the 6th city you should keep an eye out for, since there’s a hype to put the money into the investment of already existing properties, which means there’s going to be a turn on the market, as those who old the properties will become the ones who sell and that bridge of cycled investment is going to close further and further, fortunately, this also means that the new deals are not only going to come from investors getting rid of their inventory to open for new opportunities but it will come from homeowners who want a change of perspective meaning there could be more direct deals coming your way, but not only that, the development of new properties will rise but in comparison of the investment is going to be low, so the side of the market you should be keeping an eye out for should be the existing one.
But, Fort Lauderdale only represents one county, so what about Miami? In their list occupies the 11th spot, and according to their analysis in this town the trend is going to be similar to Fort Lauderdale but the competition is going to be more rigged since the development of new properties is more proportionate to the investment of already existing pieces of Real Estate which makes the market in this area far more saturated as the market is already a highly competitive one in an area of the state that offers more demand than others, but that also means there’s going to be a higher chance to find hidden gems and come out winner to invest in equity. Now as for Palm Beach, in this list it occupies the 41st place of the list but with a good prognostic of growth in both areas of the market, which as always has made Palm Beach a more secure bet when you want to have a safe investment with a good growth of equity.
Number 2: Buy/Hold/Sell ratio!
When it comes to estimating what is moving the market forward it has to come to a simple fact, how is it working when it comes to the demand and supply that works inside of the inventory and in this case it’s working globally with a high percentage of buyers for a small percentage of sellers, which in returns means there’s not a balance, but the best part of it all comes to the ratio in which you can see that there’s an equal or close to equal ratio of buyers to holders. When it comes to the market strategy that works best to grow the pricing of the already existing properties is to hold them while their value appreciates so when it comes to selling it, the return of investment is far larger than it was before, and going by the previous example of Fort Lauderdale, you can see the way the market can fluctuate in percentages depending on the purpose of the property or the type of property itself, as when it comes to Retail properties out of a 100%, a 33% is going to be for the “Buy” segment, whereas a 47% is on “Hold” and a 20% is set on “Sell”, meaning there’s more desire to hold the properties to increase their price to go further into the market value in their form of appreciation, but in contrast when it comes to Multifamily properties it’s a completely different distribution as a 60% galls into the “Buy”, only a 27% is on “Hold” and a 3% is on “Sell”, which means there’s going to be a far higher desire to buy these properties and probably for 2019 is going to go towards the hold side of the coin so by next year they can be receiving a passive income they can eventually turn into bigger and bigger investments.
All of this is good news for Cash buyers going into this year because holding, in general, will become a big trend for next year, as purchasing properties in this up and growing market in South Florida will become the investment you can rely on upon the next 5 to 10 years to hold on to while it grows both in equity as it does in positive passive income so you can focus on bigger projects for you near future.
Number 3: Investor’s Demand vs Development Opportunities
For this year a trend that will be replicated into absolutely every single type of Real Estate investment is around the Invest vs Development, and you may be wondering what do you mean, that literally is every single year! But truth be told this year, in particular, there’s going to be a growth and fall when it comes to this, as what is considered the Investor’s Demand, which is basically the investment on already existing properties is more prominent than the development of new properties, so the winners are ultimately the Investors as the main growth and improvement is on their side for Miami, Fort Lauderdale and Palm Beach, but when it comes to development opportunities there’s going to be a big drop in the market as those properties won’t do quite as well, since they require more investment, time and effort. So, investors, you win this year and probably you will also win up to 2020 when there’s a far deeper need to develop new places in order to fit the growth of the population and occupancy rates rise higher and higher in all forms and shapes, from renting to owning properties.
The best part of this is that this growth not only goes in general but when you look at the numbers in the distinctive types of product out there you can see that in comparison from last year there’s still more interest on the investment rather than on the development, and the top 3 types of properties in this battle are Industrial/Distribution, Multifamily and Single Family, so if you were thinking on the investment of either of these for 2018 you are most definitely on the right path! But hey, do let us know what you’re looking for and we will point you towards the right properties and hopefully do some good business together!
If you want more predictions around this subject, Inman posted a blog post about Zillow’s predictions for this year, check it out here, is very interesting!
Number 4: Owning and Investing, you’re in!
We have spoken tons about the South Florida Market, but let’s give one final look at what could be coming our way for this year if you want to work Real Estate and what sides of it should you keep an eye out for and study it for the future if you so wish to invest more time in it as business prospects for this year and next year! This is the year you should buy and hold! Buying is definitely going to be a trend for 2018, as you will grow your properties in price through the year, and give you time and space into getting wealthier and wealthier with a good passive income that will allow you to retire at an early age, and build an empire without that much of a hassle but tons of hustle!
This is also the year of builders and developers, as builders will take over the rehab of properties, turning what already exists into a good old pot of gold for the market! And on third place comes in the Equity Investors, and those who will take advantage of the appreciation of their properties while they hold them through the year and into 2019!
The housing trend to end all trends is definitely the fact that there are far more buyers than there are properties, both in Florida and nationwide! As it is explained in this Forbes article, there’s a huge misconception that people are currently all moving back into their parent’s house, which while it can be true, it’s also not a huge factor when it comes to the statistics for this year! The vacancy rate on properties owned by end-buyers has dropped at almost the same rate than rental properties’ vacancy has, which is only translated into good news for the investor, because if you go for big rental projects you’re most likely to get your return of investment in big quantities! It’s going to be an interesting year as there are more buyers or consumers moving around rather than less, once again demonstrating that 2018 is definitely a seller’s year!
Now do tell us what you think about our analysis of the market for this year and our predictions of how 2019 will play out for Investors in South Florida as well as in the rest of the US market! Once again if you ever want to invest in here let us know right away so we can help you find your next cash investment!