Real Estate Investor Magazine South Africa August 2016 | Page 52

FLORIDA Home Flipping Attracts Big Investment Interest South Florida still a hotspot for home flipping BY DREW HOOK S outh Florida saw resurgence in home flipping in the first quarter as investors capitalize on more distressed properties hitting the market. About 10 percent of all home and condominium sales in the January-through-March period were flips, the highest share since the third quarter of 2006, according to RealtyTrac Inc., a real estate research firm. The 2,440 flips in the tri-county region were the most of any metro area nationwide and represented a 9 percent increase from a year ago, RealtyTrac said. A flip is defined as a property sold twice within 12 months. Flippers helped the housing market recover from the six-year downturn by renovating and adding value to rundown homes. But too much flipping can accelerate home-price appreciation beyond what the market can handle. Historically, flipping has accounted for 7.5 percent of all home and condo sales in South Florida. Higher home prices in recent years have chased flippers from the market, but those who remain are enjoying solid returns. The gross profit for a flipped home in Palm Beach, Broward and Miami-Dade counties in the first quarter was $65,000, up from $54,500 a year ago, RealtyTrac said. The return on investment was 51 percent, compared with 46 percent in the first quarter of 2015. The median purchase price for a flipped home in the first quarter was $127,500, a 24 percent discount from market value. Although fewer properties are entering the foreclosure process, Florida judges are moving existing cases through the court system. That’s putting more homes back in the hands of lenders, which are marketing the properties for sale. 50 AUGUST 2016 SA Real Estate Investor Candice assists South African investors with new build investments, offering them an opportunity to turn quality property investments into cash within a 12-month period. New, international developments don’t come onto the global stage often for South African investors. Candice says, “It is not often we get the opportunity to partner with investors on such a quality product. The 3-Bed 2-Bath units generally sell 1-2 months before the building is complete and interest has been high.” Unlike existing renovated properties, new builds are fixed so that returns are consistent without any other additional hidden costs (bad plumbing, faulty electrical, etc.). Besides the financial benefits on maintenance costs, the warranty on new builds give the investor the opportunity to cover him or herself. The United States still remains a hot market to invest in, with Florida in particular attracting interest as the countries #1 retirement destination. On average, up to 1000 people per day move into the US’s ‘Sun states’, which include Florida, Arizona and Georgia. Strategic asset allocation is another reason to invest offshore and the Florida market is one of those prime markets in the US. For more info contact Devon Brough on [phone] or email [email protected] RESOURCES Prime Propery Global www.reimag.co.za