Investors
Let's not forget about our investment opportunities.
Now, here lies many of our concerns. Wherever do I put my cash, assets, or retirement funds in these unstable economic times?
CD's? Although safe, the cash is only available after 6 months or at the end of the CD's term without heavy penality. But the return in interest is just not there.
Money Markets? Similar to the above CD accounts and again with minimal interest paid, but the cash is readily available.
Gold? Well, a bit risky with these current hefty prices, and those prices are bound to drop...but when and how much of a drop?
Stocks? It appears quite evident that only the "insiders" know what's happening in the market. The vast majority of the stock investors can feel the risk and experienced the constant, sometimes daily, up and down price fluctuations. If interest rates begin to rise, which they will, then the stock market would more than likely take a very deep dive.
Art and antiques? Sure...for long term and those prices are down now. Liquid? No. The problem is that the good items are well up there in price. You might want to leave this to an fine art or antique expert...or to a Trump.
Real Estate? Perhaps the most unique at this time and obviously my choice. However, real estate was definitely not my choice a few years ago, but it is now...and here is why.
Generally, the purchase prices of real estate tend to increase and decrease rather slowly, rendering this investment fairly stable. And we are currently, and finally, on a slow but steady rise in prices and seen by many as a good alternative to the above investments. In fact, few investors will deny the already evident and continued rise in prices in the typical growth areas. Fewer still will deny the growing demand of the awaiting Baby Boomers. And I think we all agree that when the interest rates begin to climb, the buyers will rush in before the rates rise again. That inrush only creats even higher prices and when the prices increase the buyers will again rush in before it rises even higher. And on it goes again.
Of course, there are down sides to each and every investment category. And for real estate investments it's the annual real estate taxes. Now, at the current purchase price of a $6500 building lot the real estate taxes actually amount to about 1/2 of 1% of the purchase price. And as the prices increase that percentage diminishes and, of course, those real estate taxes are deductible on your IRS return at the end of the year.
My recommendation now is that the investor maintain a Money Market Account for those rainy days and then start on real estate investments again. The scenario goes like this: I select the investment building lots, you inspect them, you buy them, the prices increase, you sell them or keep them for the long haul...but not too long! And that's where I come in...to determine when to continue buying, stop buying, when to sell all or part, and when to start buying again.
Please understand when the real estate market really opens up again, our many builder client will again be looking for plenty of land inventory. And...that is where you, the individual investor; You, the investment groups; And you, the Land Banks supply those building lots to our land hungry builders as well as to the public. That is what I'm recommencing at this opportune time. I mean, it's almost like working with a legalinside trader, isn't it?
More on Home and Commercial investments
Purchasing a home or commercial property for investment generally requires a tenant to support some cash flow, as the resale value increases. Either the investor handles the property management of: the home, or the commercial property, by him or herself with the actual rental, the lease, collection of rents, maintenance, periodic inspections, possible evictions, and the other needs to maintain the property as a viable investment...or they hire a professional property management company. We have such a company. Asset Marketing & Property Management, Inc. was organized in 1992 to handle those elements for the investor. For more detailed information, please visit our website at: www.AmPmRentals.com. to see how we support our investors.
More on Building Lot investments
The investment in fully improved building lots have great advantages and there are more than 200,000 of them available in this area. The initial investment is far lower than an investment in a home or commercial property, you can spread out your investment in multiple properties, the real estate tax carrying cost is relatively low, there is no maintenance, resale opportunities are greater, and closings are simple and fast. Therefore, the vast majorities of our investors have turned to building lots as individuals investors, investment groups, builders, and Land Banks.
But, before you jump into the any real estate market, there are circumstances that must be considered, such as history, demand, prices, opportunity, timing, and supply. These are detailed below.
History: You don't want to guess where to plant your investment monies. You want an area that had previously exploded during the last real estate expansion. You want a proven area. The North Port, Florida area is such a proven area.
Demand: The Baby Boomers are chafing at the bit to get their homes sold in the Northeast and the Midwest in order to enjoy our Florida winters. The statistics are telling us that 10,000 people are retiring every day, and...our home sales have more than doubled in just the last year along with the rising prices of our building lots.
Prices: After our last real estate explosion in 2004, 2005, and 2006, our building lot prices crashed from a high of $40,000 per building lot to about $3,500. However, we have been climbing back slowly but steadily. As of January 2014, we are selling typical building lots for an average price of $5,500 and experiencing growing numbers at $6,000 and $6,5000. Out of state investment groups have been gobbling up lower priced building lots along with the general public causing the rising of prices.
Opportunity and Timing: Certainly, this is another opportunity as the prices are definitely rising and the timing is excellent. However, investors need to justify the balance of price and timing with decision. In other words, waiting another 6 months may increase your cost by 15% or more and that means it also reduces your eventual profit by that same number. Now, please understand that I'm not saying...You better buy now! What I'm saying is just be aware of these circumstances, as an investor. I mean, we all know there is no guarantee, that's a given, but when the real estate market begins to duplicate that same scenario as it did in 2004...I mean, you've just got to look.
And further Elements
Now, I don't wish to become political and I'm not concerned with anyone's political affiliation, however, it is my belief that if and when we attain a true pro-economic growth administration in the White House, whether they be Democrat, Republican, or Independent, we will see an economic and real estate expansion, in a relative short period of time, that we have never seen before, in my opinion. And that again would be unbelievable for our active investors.
About the past
It was certainly an exciting time for us and so many investors and Land Banks, as well as for the builders who we supplied land to, all during the 2004 expansion era. We sold more land than any other real estate broker in the Charlotte and Sarasota Counties, thanks to our investors and investor Land Banks. That was where so many of our investors became millionaires in just a few years.
The other element was that we saw the land market beginning to slow down in direct proportion with the systematic slow down in new home sales from our many builders back 2006 and 2007. that is when we recommend that our land investors stop buying and begin selling off at least half of their land holdings, for cash. Fortunately, many did just that. As you probably recall, the financial industry didn't begin their massive contraction until 2008, along with the rest of the country, and well after we saw it beginning and we reacted to it. The reason we were able to see the land market dissolving so early was because we were at the very source. We are always at the very beginning of land investment expansion and we are always at the very beginning of the land investment contraction, just as Florida is the first to expand in real estate and the first to slow down. A very good place to be for our investors.
What is a good lot investment?Now, please understand that the lowest priced lots are not necessarily the best for investments as they tend to be the least desirable. The best investments are the lots that are most sought after: good streets with good houses, nicely wooded, close to shopping and other amenities, etc. That is what we recommend for our investors...then, of course negotiate the price. That means, when it comes to re-selling those properties, you can get higher prices, the least sales resistance, and a quicker sale. That is an intelligent and safe investment with the least risk in a rising market.
Also...
Now, perhaps I'm not much different from a financial advisor or planner...except that if the land prices begin and continue to drop due to an unforeseen circumstance, you won't hear me say, "Just hang in there!" For once those prices begin to drop...they generally continue, and if so...then I'll tell you to sell! Sell them whether you sell them on your own, with another real estate broker, or through my office.
There are no short up and down fluctuations in land prices, assuming we're in an open and honest market, and not in a new subdivision with one self serving owner/developer in full control. You really don't want to sit there until those prices hit the bottom especially if you already got the scoop to sell. When the real estate market stops...then you stop buying. These lessons, and more, I've learned from my many years in real estate, not to mention, the the real estate expansion of 2004, 2005, and 2006, then the massive real estate contraction from 2007 and on through 2012.
Whether you are an indivudual with $8,000 to invest, an investment group with $500,000 to invest, or you're just looking for more information. You can contact us by clicking on the email button. 