By Sunny Isles Real Estate Expert on July 13th, 2011
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as well as depressed prices have positioned the Miami real estate market for investors. Traditionally real estate investors seek properties to flip, a particularly viable financial option during the recent foreclosure crisis. However, recent investment activity within the marketplace has been with the intent to rent, not flip. Why the change in direction?
Driving Forces Behind Rental Interest in Miami
The demand for quality Miami rental properties as well as across the entire South Florida is on the rise. There are three contributing factors to the rise in demand; foreclosure rate increases, uncertain economic conditions and lack of new apartment building construction.
The primary force driving rental interest is the volume of homeowners who have experienced a recent foreclosure, are in search of a new home for themselves or their families. Real estate experts suggest that the rental market will continue to strengthen into 2012 and through 2013, as the number of foreclosures remains constant due to the current economic crisis.
Another Miami real estate rental driver
is the uncertainty still present in the job market. For those who are not homeowners, despite depressed prices making now a prime time to purchase, many are not ready to return to homeownership. Many are uncertain about their job stability and are currently more comfortable with a rental contract.
The economy has taken its toll not only on the individual homeowner, but also the Miami commercial real estate as well. As belts tightened on commercial financing opportunities, many developers placed multi-family projects on hold. Fewer apartment rental choices have also contributed to the increased interest in both single family properties and multi-family properties for short term and long term leases.
Demand for rentals will place power into the hands of landlords, creating opportunities to generate cash flow and to capture capital property appreciation once the market turns and investors choose to sell. Therefore, renters should seek longer term leases in order to lock in prices, as they certainly have the opportunity to rise with continued market demand.
The old adage, “strike while the iron is hot”, couldn’t be truer than when applied to the Miami luxury real estate market. Prices are right and demand is high, creating prime opportunities for real estate investors with a strong cash position and/or financing opportunities to cash in!