YEEHAW!!!!!! The south will rise again!! Can't you just imagine the Dukes of Hazard boys sitting on the hood of their car (the General Lee) grinning in front of a For Sale sign in their yard? Well, they should be smiling with the prices in the south, and especially in Florida. But will this Florida real estate trend continue? That is the $100,000 question.
We just recently taught a class at the Learning Annex in NYC about investing in Florida real estate. As I was preparing for this class, I was just constantly shocked by some of the facts that I was gathering?. and I live in Florida and have done so most of my life. So the question becomes "is this just an over blown Florida real estate bubble or is this something that is likely to last?"
Let me give you an example of just how wild Florida real estate has become. Recently, somebody just made a purchase of the LARGEST track of land that his been purchased in Florida since 1965. Back in 1965, some crazy dude named Walt Disney purchased 30,000 acres in a relatively unknown place (at the time) called Orlando. At the time, the locales who sold their land went laughing all the way to the bank about this guy.
This recent Florida real estate purchase, however, was 28,000 acres at a price of $30,000/Acre. No big deal, right? Wrong!!! This land was purchased around YEEHAW Junction, Florida! Ever heard of it? Most people have not. Yeehaw Junction is off of the Florida Turnpike in Osceola County. This is one of those places that you could drive through 10 times and still not have noticed it.
If you are like most people, then you would have to assume that big groups are buying these large tracts of land with the intent of rapidly developing them and selling them during this crazy real estate market. Nothing could be further from the truth. What these groups know is that that the population of Florida is expected to increase by 35,000 people, per month, for the next 30 years. So month, after month, after month, you have people pouring into the state. So if you are one the big Florida real estate groups with tons of money in your pockets these days, what would you do? Buy the land in cash and sit on it for years --- also referred to as "land banking."
Now if you are familiar with the Florida real estate of yesteryear, you would have to assume that most of this population growth is from fixed, low income, retirees that are coming into the state. Wrong again. Today, and in the foreseeable future, you actually have very wealthy individuals coming into the state, possibly for long term retirement. The difference is they have lots of money, are willing to spend it, and are accustomed to nice life styles.
Whenever there is money flowing, then you obviously create business opportunities and job growth. As a consequence, many locations in Florida are exploding within the 20-40 year old age group. With this kind of real world demand floating around, the opportunities are endless for savvy Florida real estate investors.
Of course, you can not just blindly make investment choices, especially if you live outside of the state. Some areas have become investor dominated and could be a bit scary in the shorter time scale. Over the longer time scale however, the future looks very bright, especially in the area of land investments and affordable housing.
In the Learning Annex class in NYC, my suggestion to investors interested in Florida real estate is either learn how they can use preconstruction investing to easily make investments in Florida or else move and get involved in more active investing styles. For preconstruction investing, the trick is to 1) find an emerging area poised to explode, 2) find a project within that area that is high demand and is in preconstruction, 3) ride the appreciation curve while you may not even own (yet) the property. People have made money by the boatload over the last few years doing exactly that and "aw shucks, we only have another 15+ years to go before it runs out".
Now do you want the really good news? This is not just limited to Florida real estate! In our group, we are making multiple investments in many locales all being driven by the baby boomer shift and its far reaching impacts. In my opinion, if you want real estate investing to be a major factor in your financial future, learn what the boomers want and then buy in front of them.
Dr. Chris Anderson is a co-founder of http://www.GetPreconstructionDeals.com and is referenced in many venues including the New York Times and USA Today. Download his free, 30+ page preconstruction investing ebook today at Get Preconstruction e-Book
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