Did you know that over the past five years the value of homes in Florida has increased by nearly 69 percent? Even rents have increased by 25 to 31 percent, depending on the area. This upward trend does not seem to be slowing, making now the best time to invest in real estate in areas like Palm Beach.
Palm Beach oceanfronts and Palm Beach lakefronts are some of the most coveted real estate in Florida, and they are a wise investment choice because of the ROI you can expect. But how can you choose the right property?
Read on to learn some tips on how to choose Palm Beach waterfronts in which to invest.
1. Palm Beach Waterfronts: Determine Your Investment Goal
Before looking at properties, you need to know what your goals are when investing in real estate. It is not enough to have the cash ready for the investment if you are not sure what you are going for. Some of the things you have to determine are if you plan on buying the property and holding on to it, if you want to flip it, or if you want to build something from scratch.
Deciding what your goals are will help you narrow property choices when beginning your Palm Beach, Florida real estate venture.
2. Location Is Key With Palm Beach Oceanfronts
Location is one of the most important factors when investing in real estate. Buying the cheapest property in the most affordable locations can seem like a good choice but it will not bring you the kind of ROI you want. It is a gamble to invest in locations that may never truly become up-and-coming.
When investing in West Palm Beach, Florida real estate, look for a location that has had steady growth and one where that trend looks to continue. Many times this means choosing a location close to an area of rapid commercial expansion but you can never go wrong with waterfront properties.
Track trends in the surrounding areas but do not only focus on real estate trends. Look at the new businesses coming in, since this can tell you whether the place will expand or not.
In Florida, there is a consistent demand for single-family homes, so all it takes is for you to decide on the location that can bring in the return you would like on your investment.
You want to travel to the location often and get a sense of it. A common mistake people make when investing in real estate is to try and do it from a distance. You need to study the market, know the neighborhoods, and understand the local real estate trends before you can know the property is the right one.
3. Check for Hidden Liens on Palm Beach Lakefronts
Something that can destroy an investment deal is hidden liens that do not show up until the closing attorney runs the title. Before deciding on a property, you want to check Palm Beach official court records to clarify any doubts you may have. A check can tell you if there are any lawsuits or court cases involving the property.
You can also turn to the Palm Beach property appraiser’s office. You can learn if the property has gone through an appraisal process and the records can let you know if there is a lien on the property that has not been satisfied. Another resource to help you know if there is a lien on the property is the Florida Department of Revenue.
Not learning about a lien on the property can slow down the deal and lead to delays, so do not get involved with a property until you know it is clear.
4. Do the Numbers
Before committing to a property, you need to get data about that property. You want to know about vacancy rate, tax information, and expected yearly maintenance costs.
You will want to know your capitalization rate to be sure you will get a good deal. The 1 percent Rule says that the right property should bring in 1 percent of its purchase price each month. You may also want to run a CMA report of the area to see what properties have sold, what they went for, and what monthly rents are like.
5. Know What Trading up Entails
If your goal is to sell a property and invest the money in another one using a 1031 deferred tax exchange, you want to know what to expect from the process. There are rules that you have to follow right from the start to ensure your gains are not taxed so you can make the next investment.
Tax-deferred exchanges can be a good idea for many investors and can be a more viable choice than a “buy and hold” property. Just remember that you must reinvest your net sale price and your net cash proceeds. There are also some restrictions about the kind of property you can invest in, so having a real estate expert on your side helps.
Investing in Palm Beach waterfronts is not something you want to rush into. Take your time to know the numbers not only of the property but of the entire area. Even better, reach out to experts like us at Linda A. Gary Real Estate, who know the area because it is our home.
Whether you are looking for Palm Beach oceanfronts or Palm Beach lakefronts, our team is here to ensure you find the perfect property. Contact us today to learn what Palm Beach has to offer!