The housing market and economy in most parts of the world are as bubbly as ever, despite the coronavirus crisis. In 2020, there was a strong housing demand in almost all the regions in the US, driven by millennials increasingly reaching their home-buying years and a resilient economy.
Other factors fueling the surging demand include increased work-from-home opportunities and reduced mortgage rates. Property developers such as Fiddler’s Creek golf Aubrey Ferraro find the growing demand, music to their ears.
The Rising Demand
Apart from the low mortgage rates, the main culprits for the surging house prices in 2021 are the buyers. They are causing quick house sales. Some of them are so hyperactive that they are making offers before seeing the property in an attempt to win the bidding wars.
Currently, the housing market favors sellers and in particular, property developers like Aubrey Ferrao, who specifically has a better knowledge of the luxury housing market in Naples. Builders are having an easy time selling the new residential homes during the pandemic, and they are raising the prices.
Tips on Investing in the Real Estate Market
- It is critical to acquire the services of a qualified and experienced real estate agency that will provide you with rental performance analysis based on your goals. You may want to see your rental income rising over time or your home appreciating, and these professionals come in handy.
- First-time property investors overlook various things such as costs and margins, and it is a mistake. Buyers of distressed properties set returns of around 5 and 7% because there are expenses to meet. As an individual investor, set a return of around 10%, and maintenance expenses at around 1% of the property value.
- If you are purchasing a condominium, consider its financial condition first. Is it well capitalized? How does it cover the costs of projects? Is it through a reserve account? Check whether all the owners are current with their payments.
- The bylaws to landlords should not be too strict in the number of units allowed and other issues. Are there special fees charged for renting out a unit? Get a copy of the bylaws and determine whether they are consistent with your objectives.
Some condo associations have restrictive laws that sometimes make it challenging for condo buyers to turn a profit when they rent out. Read the rules and do your calculations.
Real estate investing can be quite profitable if you plan well. Nonetheless, there are quite a few factors to consider, such as associations, overheads, and bylaws. These can negatively affect your profit margin quite significantly.