Just ran across this in Yahoo Finance. If any of you investors are looking at property in the U.S. be careful about Florida. The U.S. Census bureau came out with this info. I am posting the link so you can read it for yourself and make your own decision.
http://finance.yahoo.com/news/Nearly-20-of-Florida-homes-cnnm-2507768369.htmlYes, tons of vacancies. Miami has the most and it is most drastic in the condo market. Miami currently has 5 years of condo inventory on the market. Regardless, same goes for AZ, NV, CA, AZ, etc. where there are a lot of bank owned homes. Banks typically do not rent out homes they repossess due to liability purposes. So as the bank releases their homes for sale, these homes will remain vacant.
On another note, the rental market is very strong and vacancy rates for "performing homes" are in the 8% range. Performing homes are those owned by investors or homes qualifying as rental stock. Factor in the bank owned homes and vacancy rate goes higher. You cannot calculate that though as it is not part of rental stock since the bank won't allow rentals.
CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone Memjcantrell wrote:Just ran across this in Yahoo Finance. If any of you investors are looking at property in the U.S. be careful about Florida. The U.S. Census bureau came out with this info. I am posting the link so you can read it for yourself and make your own decision.
http://finance.yahoo.com/news/Nearly-20-of-Florida-homes-cnnm-2507768369.htmlMJ,
You specialise in Kansas City?
How are you finding vacancy rates there?TH
My KC property had multiple tennants wanting to rent it prior to closing .
I hope this is common in KC but i dont know.
Overall vacancy rates seem quiet low .T.H. and Rick,
The vacancy rate in Kansas City is quite low. According to which analysis you speak with 12-14%. However, the market is a little different there are over 6000 families that are qualified for section 8 that can not find housing. This is due largely in part to the banks not releasing their portfolios due to the high demand for investment property in the area. So there are homes that are awaiting rehab. We have no shortage of renters it is quite the opposite we have a shortage of available properties. Every unit we receive is rented within 30 days to a section 8 tenant. And the demand is even higher in the urban core of Kansas City. The other highlight is that in the final quarter of 2010, we saw a 2% drop in the rental vacancy rate. As these properties come available that number should fall again by second quarter of this year. Hope this helps.
To further clarify, I have seen these reports and have dug a little deeper as I have had a few calls from investors who have seen this report. I am a former analyst myself for a bank and know how these "other analysts" put their numbers together. Unfortunately, they mislead using a media blitz to make up a good article with terrible due diligence as reflected in the proof below.
- U.S Census Bureau on Vacant Homes Definition: LINK and LINK
- In the links above, a vacant home is also defined as one being of "temporary use".
- So, these "genius" analysts have not done their due diligence. The vacancy of 20% in the reports INCLUDES homes of TEMPORARY USE.
- Yes, I am a FL real estate guy, but these analysts have not disclosed in their worldwide media campaign that Florida is one of the top second home destinations in the world.
- In this report of 20% vacancy, they are including the second home units…
- Yes there are vacancies… but the number is incredibly misleading.
The vacancy report is misleading and investors need to be aware of the definition of a "vacant home".
Cheeves
CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeSPOT ON CHEEVES FINANCIAL,
Many media people stick pieces of puzzle together in this way, it looks as what they want to be looked. There are plenty of areas in Florida, where landlord gets inquiries from prospective tenants as soon as properties hit the market.
A COMMON SENSE FACT ABOUT KANSAS – Kansas has reduced just around 20% in GFC. A city which did NOT have a enough capital growth in good time (when almost every place's price was surging), expecting a quick capital growth in bad times is pointless.
LET SEE FEW FACTS ABOUT FLORIDA – The spirit of innovation is evident in Florida; as it is getting reputation of “Innovation Hub of Americas”. Let’s see why Florida is much more diverse than theme parks and famous beaches; and what reputed global researching firms say about it. Among all American states, Florida:
1. ranks 1st for business (The Chief Executive)
2. national leader for entrepreneurial activity (Kauffman Foundation)
3. business climate is among top 5 (The Tax Foundation)
4. ranks 3rd as largest state for hi-tech companies (TechAmerica CyberStates)
5. ranks 3rd as largest exporter of hi-tech goods and services (TechAmerica CyberStates)
6. ranks 4th largest CyberStates for hi-tech employment (TechAmerica CyberStates)
7. has one of the world’s most extensive multi-model transportation system
8. one of the only states which have a clear vision for long term future plans – Strategic Plan for Economic Development.
9. workforce Ranks 1st on America’s top states for business ranking (CNBC)http://propertyshopusa.com/why-investors-love-florida.php
Thanks
I've assessed the market in Florida thoroughly and together with my in house investor base, we look to acquire property between $50,000 – $100,00 per unit. The hardest part in sorting through the deals that fall on my desk is that you have to get the area right. The one type of property that I have really honed in on are class A apartment communities near to one of the major universities in Florida. Tenant class in these areas are generally very high, Cars in the parking lot are very nice and a majority of the students living off campus are the graduate students that take their studies very seriously. If you can enter a market close enough to the universities you have a consistent rental pool to draw from that requires minimal effort to manage. This play has delivered the most sustainable rents so far..
We have recently secured a site in Tampa, close to USF and it sits at 100% occupancy.
JMCI :
I love that area of Tampa. I just brokered an apartment complex disposition / acquisition and investors love the area because of USF area. Although I'm not a fan of buying single condos in FL at the moment, I like multi-family and single families. I just bought an REO single family home and is working out really well.PropertyShopUSA:
Outstanding article in your link. Very accurate.CheevesFinancial | Cushman & Wakefield - Commercial Property SW FL
http://www.CommercialRealEstateVoice.com
Email Me | Phone MeHi,
Yes, Florida is I think the best and has good returns. It is also on the up – vacancy rates are falling. i like Orlando, Tampa and Fort Myers.
Regards,
US banks DO NOT rent homes. Ergo the opportunity for investors. If they did there would be no investment market to speak of the banks would just rent them out and ride out the storm.
No matter the market you have to factor in a vacancy factor long term for your rentals.
Most of the pro formas I see grossly understate this and come up with big net returns that are just not realistic, still great returns but I think you can cut them by 30 to 50% of advertised and be in the realm of reality and not dissappointed.
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