Florida’s abundance of REO inventory could be a blessing in disguise for national and international real estate investors. According to Core Logic, the single family home rental market is stable and shows a good amount of activity. This has the potential to give these investors return on investments that are far above most in the country. The predictions come from examining the capitalization rates amongst many different markets nationwide, and Florida, coupled with a few states in the mid-west, are at the top of the list. The rates are calculated by assessing the annual cash flow relative to the price at which they purchased the property. This has been our reality and has been relatively stable since 2010 in Florida.
A factor that is causing our capitalization rate to increase partly stems from the discounts investors receive when purchasing real estate owned distressed properties, which is usually around 30%. If more sales come to fruition, these discounts could be larger for investors, yielding even higher capitalization rates. Core Logic reports that some areas in Florida are at the 12% range in regards to cap rates, while the national average was 8.6% in January.
According to the Federal Reserve, during the last five years, completed foreclosures have transformed over 3 million homeowners into potential renters. Some investors are chomping at the bit to get in on this trend and make their dollars stretch that much further. Here in Tampa, Florida, we have seen a competitive trend with investment properties on the market for sale. No longer are the first offers being accepted. Investors are competing more and more for properties that were once available for longer periods of time. The listing prices and sale prices are moving upward.
If you are considering your real estate options, and you think you are ready to invest in today’s real estate arena, contact our investor specialists today to learn how you can take advantage of the real estate market during these unprecedented times.
SI Real Estate offers highly personalized, multilingual, full-spectrum real estate purchase and sales services. We are a boutique for sophisticated investors, select owners or renters who may be upgrading locally, or those making traditional relocations. We also provide turnkey landlord and tenant management. Blending comprehensive insight into the Tampa Bay area with international perspectives for a worldwide clientele, we like to think that “SI Real Estate is Global Real Estate in Every Way!”
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