Avoid These Homes When Investing in Florida Real Estate

Some look into Florida home loan for residential purposes, while others are focused on inventment opportunities. The following list speaks to the latter. Here are three types of real properties that should be avoided … assuming actualy profits are your main goal:

AVOID BUYING HOUSES IN EXCELLENT CONDITION: To avoid this risk of buying at the top of a housing bubble and then watching as homes depreciate, you’d be best served avoiding purchasing homes in excellent condition. Instead, look into so-called “fixer-upper houses” where the market value can be increased by making profitable improvements that add more market value than they cost.

This technique is called “forced inflation.” It’s used by smart home buyers and real estate investors to raise the market value of a property by more than the fix-up work costs.

AVOID BUYING “TEAR-DOWNS” OR “SCRAPERS:” You don’t wanna take out a Florida home mortgage loan on a complete mess. Some houses are in such bad condition they need major structural work, such as a new foundation, new wiring and new plumbing - or they are hopelessly outdated with a bad floorplan design or other incurable defect.

In the real estate business, these are known as “tear downs” or “scrapers.” Avoid such a purchase unless you can buy the property for its land value alone. Otherwise, you’ll never make up the cost of construction or any Florida home improvement loans.

AVOID TOWNHOUSES AND CONDOMINIUMS: Most townhouses and condominiums offer little profit opportunity (except possibly as long-term investments). Why? These units, which are very similar to the adjoining townhouses and condominiums, are constrained by the sales prices of those nearby properties.

Even if you can buy a run-down townhouse or condominium at a bargain price and fix it up, your profit potential is limited (no matter how nice your unit is after fix-up) by the comparable sales prices of nearby units. You can’t sell this property for any amount greater than those directly around it.