Florida investors may be interested in learning that commercial real estate can be an exceptional method of earning a passive, profitable stream of income. While a real estate investment can be different from typical securities like stocks or mutual funds, commercial real estate can be successful and secure as an ongoing investment and business opportunity. When selecting a project in which to invest, there are several factors an investor should consider in order to make the best choice for his or her portfolio and style.
Investment in residential and commercial real estate is continuing to grow in Florida and across the country, as major real estate investment trusts (REITs) continue to acquire and build new homes for generating rental income. The percentage of occupied rental homes in 2017 grew and is expected to continue to rise as even more rental homes are acquired and built by the large REITs across the country.
Florida investors may be wondering what the future holds for the commercial real estate market. After decades of regular double-digit returns, it seems that, on some levels, the market has slowed down. In 2016, the returns fell below the annual average of 10.1 percent for the first time since 2008's major economic crisis. In addition, some forecasts envision 6 percent returns for 2018 and 2019.
Real estate investing can be a lucrative business venture in Florida. To be successful, it takes hard work and a commitment to persevere, but the success that ensues can be rewarding both monetarily and personally.
Florida residents who are looking to buy a home with an HECM reverse mortgage may benefit from understanding the new rules surrounding this type of loan. In the past, a buyer could reduce the mortgage insurance premium by drawing less cash. However, there is now a flat fee of 2 percent of the property's value regardless of how much cash is drawn.
Florida residents may not all agree with the tax cut proposed by the GOP. Some who study the issue believe that it is generally better to have a stronger economy and higher taxes as opposed to lower taxes and a weaker economy. However, the bills may provide ways for those who own commercial real estate to make a profit. Those who are single tax filers and make less than $157,500 may be entitled to a 20 percent tax reduction.
Major disruptions in the retail sector across Florida and around the country have created changes within the commercial real estate market. Many retailers have either gone out of business or have retreated from brick-and-mortar stores to concentrate on e-commerce efforts. As a result, landlords and property managers are actively seeking new commercial tenants while entrepreneurs are likewise seeking opportunities.
Those who are selling commercial real estate in Florida generally want the deal to close as soon as possible. Those who are prospective buyers want to make sure that they are getting a quality property. Therefore, it isn't uncommon for buyers and sellers to have different ideas as to how the due diligence process should play out. In some cases, buyers may want more time for due diligence because it also buys time to find financing.
Renting out a single-family home may seem like an easy way for Florida residents to make money investing in real estate. However, there are many problems that an investor may encounter. First, the owner of the property has to decide whether to manage it on his or her own or pay someone up to 10 percent of the property's income to look after it.
While the summer months are usually the slowest for Florida commercial real estate transactions, this season has been different. In the past few months, sales and leases were strong across the country, according to a survey of brokers.