1. How is the real estate investment market in Manatee/Sarasota?
According to Fortune Magazine (May 30,2005), Bradenton is the 9th-hottest real
estate market in America. Sarasota ranks eighth. No other Florida market is
rated higher. Bradenton has recorded a 46.7 percent increase in homes prices
2. Why is our area such a hot real estate market?
Location, Location. Factors include: The Interstate-75 Corridor, Access
to Airports, Beaches, Access to Major Employment Centers
- Strong Job Creation in Florida and our local area
- Baby Boomers are retiring to Florida in record numbers
- Our prices are just catching up to other areas, like Naples, there is still value here
- 15,000 new residents each year are moving into Manatee County
3. I understand that inventory is low….how does that effect the market?
- Two years ago we had over 1300 active residential listings in the Manatee Multiple Listing Service.
Today we have only 650 active listings. That's a 50% decrease.
- Low inventory coupled with Increased Buyer demands drives prices UP.
4. We hear a lot of talk about a "real estate bubble"...is investing in real estate still a good idea?
believe there is still a lot of life left in this real estate boom.
Market researchers tell us that 2002-2007 will be the years of greatest
growth in housing in Manatee County area. North Manatee will experience
the most growth.
Interest rates are still low and not expected to increase significantly in the next 12 months.
- A lot of money has already been made, but there are still many good opportunities.
- Remember, even in a BAD real estate market, it's possible to make good deals.
5. How would you compare the volatility of the stock market to the real estate market?
- The word "volatility" just doesn't describe the real estate market.
1975-1998, only 14 of the country's largest metro areas experienced
price declines of 5% or more over a 3-year period. It just doesn't
happen very often.
- Stock prices can sink drastically overnight compared to real estate prices that change slowly.
- Companies issuing stock can disappear entirely. Real estate doesn't disappear.
hear stats with numbers like 34% and 41% increases in home values here
locally in Manatee/Sarasota county, do you find those numbers are truly
accurate reflections of what is really going on in the market?
We prepare monthly reports which tracks our
local real estate activity. We know appreciation rates to the penny.
For example, for the month of May 2005 homes prices were up 31.7% over
May a year ago. That's a $73,550 increase.
you find that sellers are seeing those statistics for the area of 34%
& 41% and overpricing their homes compared to what the appraisers
are able to comp them for?
- Even in this hot
real estate market some homes don't sell and usually it's because of
price. For example last month 99 listings either expired or withdrew
from the MLS.
- We are seeing some appraisal challenges.
danger is that a seller may find a buyer willing to pay an
"above-market" price and then see the deal fall apart because the
property won't appraise.
- Sellers should be happy with the tremendous appreciation they can realize without allowing greed to create a problem.
8. What kind of return on investment should someone expect from real estate?
For example, a person may put down $30,000 on a $150,000 house. If that
house appreciates 6% to $159,00, that's a $9,000 gain or a 30 return on
investment. That's what makes real estate such a great investment.
- We are currently in a hot market with double digit returns. That won't last forever.
- From 1972-2002 the average home price appreciation was 6.1% nationwide.
- We recommend a conservative estimate of 2-4% for financial planning.
- But remember real estate is a leveraged investment….
investment property, what kind of numbers should an investor be
expecting from rental properties? What kind of numbers should they be
expecting of cash flow?
- A person needs to
study the market to determine expected rental rates. In some markets
the rent may be 1% of the market value. In our current market it's les
than 1% of the market value. A $200,000 home may only rent for $1200.
- A low rent to market-value ratio may make it hard to have a positive cash flow. Something investors avoid.
- However, negative cash flow can make sense in areas of high appreciation like we are seeing here.
- Our soft rental market should change as it becomes more difficult for people to purchase. Rents should be expected to increase.
10. What advice do you have in regards to finding tenants for investment property?
11. Is there a rule of thumb for how long an investor should hold onto a property before selling it?
- Always, always do a background search on prospective tenants
- Make the property attractive. Ask yourself, "Would I want to live here?"
- Treat your tenants fairly and with respect. (After all, they're paying your mortgage.)
- It depends on what your goal is?
- Buy-and-Sell investors will turn the property as quickly as possible.
- Buy-and-hold investors may hold a property for years and years.
investors buy newer properties and hold them for 5-7 years and then
trade to a newer property to avoid big ticket maintenance issues like
roofs and air conditioning systems.
- We recommend that your real estate investments be part of your retirement planning.
12. What are some of the advantages of investing in real estate?
13. What are the tax advantages of investing in real estate?
estate is depreciable. The IRS allows you to reduce your taxable income
through depreciation even as the property increases in value.
- When selling a property, capital gains taxes can be avoided by using a 1031 exchange.
14. What are some of the disadvantages of investing in real estate?
- Like any type of investing it takes some time and effort to learn the market
- Have cash savings to invest as a down payment is a disadvantage to some. Although 100% investor financing is possible.
- If you buy and hold you need to be prepared to deal with tenants.
15. What reasons have you heard people give for NOT investing in real estate?
Here's a list of reasons we've heard over the years:
If you don't want to invest in real estate any reason will do. If you
really want to invest in real estate no excuse should prevent you from
- I don't have time
- There are no good deals left
- I don't know if the property I'm interested in is a good deal or not
- I don't know how to get started
- I might have negative cash flow
- The prices are too high where I live
- I can't sleep at night if I have too much debt
- I might have trouble getting a loan
- I can't come up with the 20% down payment
- I have poor credit
- There's a real estate bubble…the prices are going to fall
- I know someone who lost money in the real estate market
- I don't want to deal with tenants
- The real estate market is slow
- I don't have enough money to get started
- I have too much credit card debt
- I'm too young
- I'm too old
16. It seems like a lot of people become wealthy by investing in real estate, why is that?
America's first millionaire was a real estate investor. A German
immigrant and the son of a butcher, his name was John Jacob Astor. In
the early 1800's he made a lot of money trading in furs, tea, silk, and
fine china. Then he started investing in real estate in Manhattan. He
became known as "Manhattan's Landlord". Not only was he a millionaire,
but a multimillionaire. Shortly before he died he said, "Could I begin
life again, knowing what I now know, and had money to invest, I would
buy every foot of land on the island of Manhattan." When he died in
1948 he left over $20 million to his heirs.
Most of the wealthy people in America have either made
their wealth or hold their wealth in real estate. Why? Because it
17. Can Anyone start investing in real estate?
has been shown that 20% of the people will own 80% of the income and
wealth in any society. Some will become financially wealthy, but most
- Not everyone will become wealthy, but the good news is that anyone can.
18. What advice would you give someone just starting out investing in real estate?
For beginners, it's important to just get started. Most people never
start. It doesn't matter where you start, just do it. There is never a
"perfect" time. With real estate it's hard to make a bad decision.
19. How can someone learn how to invest in real estate?
20. What role do CPA's, Lenders, Title Companies, etc. play for the real estate investor?
- Read books
- Listen to tapes
- Join an investment group
- Find a mentor
- Attend Seminars (Like the one we are hosting soon)
recommend that serious investors put together a team of professionals
including an Attorney, Title Company, CPA, Property Manager, and
- We have prepared a list of questions to ask each potential team member
21. Are there any secrets that real estate investors need to know?
Real estate investors know the secret of compounding. There's the
classic story of the worker who negotiates a compounding pay scale
where his pay doubles every day but starts with just a penny. On day
one he earns 1 cent, on day two he earns 2 cent and so on. The employer
thinks they are getting a bargain, but the 30 days of double pay that
begins with a single penny ends with a total invoice of $10.7 million.
Real estate grows your wealth exponentially.
22. What services do you provide real estate investors?
- We help real estate investors determine reasonable goals
- We help investors by educating them about investing in real estate
- We help investors build a profile of the kind of property they want to own
- We help with worksheets for analyzing a property to see if it's a workable deal or not.
- We help investors locate property
- We help investors buy or sell property
23. Would you describe your team approach to helping Buyers and Sellers?
Marie Avery and Terri Ayers have a team of highly trained professionals working together
to help our clients achieve their goals. We have created dozens of
systems to guarantee a smooth, hassle-free real estate experience. We