Few years ago South Florida ranked among the worst places for investment, especially in the housing market. However, this has taken a turn for the best, as investors have divested from the traditional condominiums to middle income housing investments which are more affordable, coupled with the beaches and have large market demand.
There are few key pointers that would attract foreign investor to invest in a middle income housing project rather than in a condominium.
Gross income versus fixed expenses
The investor must determine the gross income from a condo through the comparison with the fixed expenses, needed for the condo operating costs. These costs would include the monthly fees needed for condo associations, insurance premiums for liabilities, repairs, taxes, contracts for appliances and others. On the other hand, the fixed expenses of a middle house would also include tax, liability insurance and a fund reserve for any repairs but, due to the fact that such a property has multiple units within a single locality, this would mean that the expenses per unit would be lower compared to condos that are in different locations (Keely, 2012).
When it comes to the gross income, the approxiate return for a condo as compared to a five-complex middle income house may be lower. Similarly, once a tenant has vacated the condo, there is no income but the fixed expenses must be meet. In the case of apartments, where one tenant vacates, your income still flows and there is ease of finding another tenant as compared to a condo.
Foreclosure has left many people without a place to call home, which has seemed many people moved to rental houses. The vacancy rate is gradually reducing. The middle class housing has also been a haven to people with low incomes at the wake of economic recession, making the market demand raise and, therefore, a perfect investment venture, compared to condos that go for higher prices which many people cannot afford. This implies that the houses cannot stay vacant for long and therefore income is instantaneous.
South Florida is a home for many legal migrants and also has a high population of refugees, many of whom cannot afford the luxury of the high priced condos, leaving them with the better option of apartments and therefore the vacancy rate will continue to reduce, with an increase of the migrants.
Many investors who are currently taking loans for the purpose of constructing investment houses and the applications for the construction permits for apartments have shot up and there is ease in the acquisition of credit facilities, as compared to those constructing condos, as the market demand for the middle income houses being high, means a shorter time to get tenants (John, 2005).
Due to low interest rates, there is hope for long term investment, even in the wake of warnings from the commercial arena that the prices will plummet resulting in economic catastrophe. Where the construction activities slow down, there will be the need to fill office and retail spaces, compensating for the slow growth (Murry, 2012). However, in the case of a person who owns a condo, they are mainly constructed for residential purposes and their prices are not friendly to persons who would rent them for business premises.
The state of Florida has a long term and lucrative investment potential for foreign investors. As for the middle income housing, the residents with modest incomes will always provide an eager market for the houses, attaching their importance, and therefore, it will be safe for foreign investors to invest in the middle income housings as opposed to condos, that have smaller niche in the market.
Buy South Florida Real Estate essay paper online
- Redefining English Curriculum Programs in Saudi Arabia
- H&M Gets Hotter: Fashion at Its Fastest
- The Whistleblower Protection Act of 1989: Visible to All, Protecting Few
- Cultural Differences in Work Places
- Considering WAN Design
- Dynamic Aircraft Company
- The Politics of Performance Appraisal
- Project Management Assignment
- EMS Recommendations
- A Principle Is an Essential Truth