Tag: Orlando Realtors

Is Orlando Real Estate Still a Good Investment?

Posted on by Jenny Zamora

Of late, there have been several bits of speculation and buzz that indicate that the Orlando real estate market is booming, with reports indicating decreased foreclosures, rising real estate prices, and a rising number of real estate sales. What we must ask ourselves is how stable is this current trend, and are we in promising times or living in a bubble that could end up in an economic collapse in times to come.

What’s changed over the last few decades?

In today’s economic and financial scenario, bank finance isn’t as readily available for Orlando real estate as it was decades before. As individual investors, individuals are hard-pressed to secure bank financing for real estate investments. What then happens, is that the small investors in a hurry to make a sizeable profit invest their own funds, often investing entire life savings to purchase real estate in order to reap the benefits in due time.

However, this doesn’t turn out well in most cases, as these investors find themselves struggling with statutory regulations such as tax assessments and payments, insurance premiums, and other fees involved in purchasing real estate. As a result, they get trapped in a state of limbo, finding themselves without their life savings, and with a compulsion to sell at a loss to recover this money.

Additionally, investor groups are backing end-users into a corner by securing real estate using cash, as the end-users cannot afford to pay all associated fees and taxes since they cannot secure bank financing. Hence, investors will end up driving out these end-users or renting out properties. In the case of rent, there is no appreciation in the value of the property, as property values will improve only if there are people willing to purchase them and start living in them. With the constantly rising prices, these practices place a lot of financial strain on the already struggling end-users.

Why reports don’t tell you things the way you need to see them

Despite the recent reports about reduced foreclosures and rising prices, why is it still a bad idea to invest in Orlando real estate?  This is because the reports don’t account for foreclosures that are dismissed due to lack of prosecution, which will not be accounted for until they are filed for again. Another possibility is that banks and similar financial institutions have a role in delaying foreclosures, simply to avoid the added burden of tax assessments and insurance.

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Orlando Foreclosure Discounts Shrinking

Posted on by Jenny Zamora

Orlando Foreclosure properties just aren’t the bargains that they used to be. In August of 2009, the average discount on a foreclosed home was about 24%. As of September of this year, it’s now down to about 7% compared to what a home buyer would’ve paid for the same property in a conventional transaction.

Orlando, which is one of the cities that was hit the hardest by the foreclosure crisis has such a strong demand right now for properties that the discounts are pretty much gone unless the house is in need of major renovations. Our company specializes in Orlando short sales and I can tell you that just about every one of our listings receives multiple offers for the listing price or above.  It’s extremely rare these days that we get an offer that’s lower than the listing price because buyers know that it’s a very competitive market right now. As a matter of fact, about half of our properties end up selling for over the listing price.

Regular homebuyers [not investors] are the main reason for the increased demand for Orlando real estate. Everyone wants to take advantage of the historic affordability, which means the combination between lower home prices and great mortgage rates. This doesn’t mean that you still can’t get a good deal in Orlando, but be prepared to submit multiple offers on multiple properties. It’s because of this that it’s much more work to be a buyer’s agent where you have to show multiple homes and submit multiple offers before you find what your buyer is looking for. It’s very common these days to go see a house that has been listed for less than 24 hours and find out that the home already has multiple offers on it.

Orlando Re-Habbers Still Turning a Profit

The average home buyer wants nothing to do with remodeling a home after they’ve purchased it. This is why there’s soo much competition for Orlando homes that are move-in ready. However, for the home buyer that is willing to roll up his or her sleeves and dive into some major home repairs, there’s still a profit to be made. There are some lenders that will complete the renovations on their own foreclosed properties before putting them back on the market, but most of the time they just want to sell them as-is.

Homes that are in need of repairs can still be good investment opportunities if you know what you’re doing. Using an experienced Orlando realtor to help with your search is highly recommended. It’s also important to know what repairs need to happen and how much the repairs will cost before you commit to buying a fixer-upper. Although profit margins are quite a bit smaller than they were a few years ago, a full-time rehabber can still make a decent living from flipping houses.

 

 

 

 

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Newer Homes Preferred by Orlando Real Estate Buyers

Posted on by Jenny Zamora

 

 The real estate scenario in Orlando is a flurry of activities with new homes coming on top in a competition for the buyers. This has created a unique opportunity for the sellers, especially for those selling homes that were built in the 90s, with buyers indulging in a bidding war for these properties. As far as Orlando short sales are considered, the buyers seem to have a lot more negotiating strength when pursuing older properties compared to brand new ones. This is because when it comes to the new properties, they almost certainly get tough competition from affluent buyers.

Analyzing the trend

 The current trend seems to be driven by all sorts of investors, those that are aiming for resale, as well as rent. A report released last month suggests that these investors have been responsible for the inflation in the housing market in Orlando, as far as prime residential properties that were built since 1990 are considered. This could be partial because houses built over two decades ago are often considered to be less appealing as they are more likely to require upgrades and repairs. However, this is something that is not necessarily true as even newly built properties could be in a worse condition as compared to some of the houses built in 90s that are still in excellent shape. 

These older homes can also be highly appealing, especially in pristine neighborhoods in Orlando real estate. However, the overall demand for properties in Orlando has been for greater newer properties. Orlando real estate comprises of about 30% of the houses that have been built since the year 2000. However, only 34% of the sales have been taken place in this group. The report also suggests that a similar trend has been observed for houses that have been built between 1990 and 2000.

One of the distinctions between the newer and older neighborhoods is that most of the homes that are rich in equity are not listed for sale, as compared to houses in areas that have been heavily hit by foreclosure since 2008. Buyer interest for homes built before 1990 has only diminished further;. these houses, which comprise of more than 50% of the real estate properties in the area,  have only made up for as much as 41% of the sales recorded so far, reflecting a negative impact on the market.

 

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Boom Time for Orlando Realtors as Apartment Demand Shoots Up

Posted on by Jenny Zamora

At the moment Orlando Realtors are making hay. It is all in the numbers: the rate of apartment occupancy increased to 94.5% from 93.9% of the previous year. As per the Charles Wayne, Consulting Inc published semi-annual report of residential markets, more than 19,000 units have been taken on lease. The 2009 report for Orlando showed only 87.5% occupancy in the multifamily residential space. So figures indicate a sharp rise in real estate leases in the region.

The real estate picture in Orlando

The rate of occupancy increased in nine submarkets of Orlando. Three submarkets, however, exhibited a slight decrease in demand. Occupancy rates were seen to be highest in the Apopka market. Apopka boasted of an average of 97.1% occupancy in September this year. Osceola County and South Orlando also showed high demand.

There was a discernible softening of demand in the Winter Park, Maitland, and North Orlando region. Only 90.8% of the total apartment complexes were occupied. The data, however, incorporate new projects currently under completion. The Charles Wayne Consulting census collated data from about 660 complexes within the Orlando area.

Approximately 3,000 units are being leased each year in the Orlando region. More than double the number of units are being built every year. The rate of apartment buildings being constructed has at least tripled in the previous two years. About 7,124 units were under construction in September compared to 1,929 units that were being built in September 2012.

Sales and leases

The Orlando real estate agent, Sperry Van Ness Florida sold 9 acres of land on State Road 50 in the Clermont area for a sum of $1.27 million. The seller was represented by Miguel de Arcos, of the Lake Mary office, Sperry Van Ness Florida. The buyer was represented by Karen Wentzell of Schmid Properties and Centennial Bank N.A.

A lease of 11,500 square feet at 755 Rinehart Road in Lake Mary was signed by the Florida Hospital Medical Group. The group was represented by Sarah Castor of the Cresa Orlando. Approximately 3,000 square feet were leased by Night Lite Pediatrics at the Hunt Club Shopping Center in Apopka. The tenant was represented by Bill Bagley, Dunhill Properties Inc. Saul Holdings Limited Partnership, the landlord was represented by Coldwell Banker’s Alana Hogan.

 

           

 

 

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Tips for Estimating Repairs on Orlando Investment Properties

Posted on by Jenny Zamora

Have you ever bought a car without first finding out how much the monthly payment will be or how much it will cost to insure it? Of course not, that would be crazy and irresponsible. You would first find out how much everything will cost to determine if you can afford it or not.  The same thing holds true when you’re talking about buying Orlando investment properties. When you buy a house with the intention of selling it for a profit, it’s crucial that you get the numbers right from the very start or you could end up losing money.

Know the difference between Cosmetic Repairs and Structural Repairs

Just about anyone can recognize when a house needs a paint job, new carpet, or maybe even some minor carpentry repairs. These items are considered cosmetic repairs and can usually be completed with a few thousand bucks depending on the size of the house.  In some instances, you may even want to do some upgrading such as new kitchen cabinets or replacing fixtures, etc. I consider these items to be cosmetic repairs as well though they will be a bit more costly. However,  it’s very important to know if the house you’re about to purchase has any major structural issues with it.

Structural damages to a house can be a game-changer and most of the time will turn a deal into a non-deal depending on the extent of the damage and much it will be to make the necessary repairs. Unless you are a seasoned investor, I would highly recommend that you steer clear of any houses in need of major repairs.  

Some examples of major repairs are as follows:

Updating the Electrical system– Houses that are older [30+] will sometimes need to have the electrical system brought up to code. This can sometimes mean that the whole electrical system will need replacing or rewiring.

Rotten Plumbing – Having corroded or rotted plumbing has the potential to be a rehabber’s nightmare. Plumbing runs through the walls as well as the foundation and leaky pipes can easily cause severe damage over time.

Dry rot and termites-  This can be another major problem to the structure of a house, especially if it’s an older home. There are rafters in the attic as well as studs in the walls that are made of wood and if there is evidence of termites or dry rot, you may be looking at replacing most of it which mean a lot of demolition in addition to replacing the rotted wood.

All of the above-mentioned repairs can cost a lot of money. Also, it can be risky because most of the time you won’t know the extent of the repairs until you start the project and know exactly what you’re dealing with. As an experienced rehabber myself, I’ve seen what I thought was going to be a $5,000.00 repair turn into a $15,000.00.

Keep it Simple

Remember that your goal is to resell the house for a profit. That means that you need to get a good enough deal so that you can do all the repairs and get it sold quickly. My advice to any investor experienced or not is to stay away from homes in need of major repairs. If you have to repair to many things, not only will you end up spending too much money, but it will also take longer to get the house ready to put on the market. Like that old saying goes “Time is money” and another month or 2 of carrying costs while your house gets repaired can mean thousands out of your pocket.

Follow this simple formula when looking at investment properties

1-Enlist the help of an experienced Orlando Realtor in the area you wish to buy-in.

2- Determine the value of the home after repairs. Always expect your house to sell for less than the lowest comp in the area.

3- Determine how much you will spend on making repairs then add on another few thousand to it to be safe.  You should also add your projected carrying costs to the budget.

4- Price the house correctly from the start, too many people make the mistake of pricing the house too high and it ends up sitting in the market for several months and they ultimately end up lowering the price anyway.  This is where a good Orlando realtor can help you tremendously.

By following these basic guidelines, you will have a much better chance of making a profit once the house is ready to be put on the Orlando real estate market.

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