Tampa Bay, FL, is on the coast of the Gulf of Mexico, where roughly 385,000 people call home. It is currently the 52nd most populated city in the nation.
The city was a historic military hub a century ago and was also renowned for its cigar industry, made successful because of the state&’s proximity to Cuba. Tampa Bay&’s economy is mainly based on tourism, maritime, health care, finance, technology, and construction. Its port sees about $15 billion in annual economic impact and is the largest in Florida.
The median home price of downtown Tampa real estate for sale is $439,000, up from last year&’s high of $385,000. The area is experiencing a seller&’s market, which means there are many buyers vying for the limited number of single-family houses and condos for sale in downtown Tampa than there are dwellings available for sale. Additionally, the area is growing by several percent a year, which adds to the supply and demand housing imbalance in favor of the seller.
Tampa offers a wide array of entertainment, sports, and outdoor activities to its residents and visitors alike. Art and culture enthusiasts can drop by the 4,327-seat David A. Straz, Jr. Center for the Performing Arts to enjoy live shows, concerts, and dance. Animal lovers can visit The Florida Aquarium to check out more than 14,000 marine animals in their (almost) native element. The city has many waterfront accesses and parks to play and relax in.
People can invest in all sorts of assets such as gold, IRAs, art, cryptocurrency, and real estate – including downtown Tampa real estate for sale. However, industry experts consider real estate to be its own “asset class,” which should be treated as a separate component of a healthy, diversified investment portfolio. A healthy portfolio combines several different types of investments to maximize a monetary return or return on investment (ROI). As with any venture, “putting all your eggs in one basket” is generally not a wise move; you will lose everything if the basket crashes to the ground. Diversifying your portfolio allows for movement – both up and down – so that your “nest egg” rides those waves and comes out bigger than it was initially.
New investors in the real estate market often do so to generate enough income to pay the mortgage on their primary residence. This is a great start and can propel new investors to greater things (i.e., more investment properties) once the initial investment has proven healthy and stable. Ideally, it takes 6-12 months for the investor to be able to rely on his renter to prove timeliness and stability. The move to purchase more investment properties should not take place until the initial investment proves to be a solid one.
Another way investors make money in real estate is by flipping houses. Unlike landlord-based investors described above, flippers buy properties to hold onto them for three to four months and renovate them to sell at a profit. There are two ways flippers make a profit. The first is to “repair and update,” which means the flipper buys a property that’s a bit run down at a reasonable price for that property in its current condition. He then renovates the property as quickly as possible before selling it for a price that exceeds his total investment (initial cost plus the cost of upgrades and repairs). The second method is a “hold and resell” model, where the investor buys a property in a rising market, holds onto it for a few months, then sells it at a profit.
The first method of investing – investing in a rental property such as downtown Tampa real estate for sale – is long-term, while flipping is short-term and could be risky, especially if the flipper doesn&’t have adequate reserves in place to pay double mortgages if the flipper property doesn&’t sell quickly.
What is needed to own a second home?
Investing in a second house, such as in downtown Tampa apartments for sale, doesn&’t just mean a down payment is sufficient. On the contrary, there are many added requirements for buying and owning a second home. In order to qualify for a second home mortgage loan in Florida, the property is not supposed to be used for profit. In other words, if your investment plan is to rent out your second home while you continue to live in your primary home, that second home does not meet Florida&’s mortgage requirement for owning a second home. Every state has different ownership laws, so be sure to have your real estate or legal professional check on these requirements in your state.
Don&’t plunge into investing until you have monetary reserves to afford it
Never assume you can afford to invest unless you’ve already had experience with it. There are many hidden costs that new investors fail to account for, and, as a result, they can find themselves upside down in a transaction before the ink is dry. You must be prepared to cover all investment expenses in case there are delays between the time you place an offer and the moment it is accepted. Financing, inspection reports, and mortgage approvals can all be delayed, which means you&’ll need reserves in place to cover all related expenses until the deal is finalized. Be prepared to have at least six months&’ worth of double mortgage payments saved before you make a move to finalize a deal.
Investors who are landlords should be available to maintain all the properties in their ownership. Unless you have a property manager on hand to manage your property, you could lose money, time, or even your tenants if there’s an emergency you can&’t address immediately.
Find Downtown Tampa real estate for sale
Experienced local agents representing downtown Tampa apartments for sale are eager to advise you on investing scenarios to expand your investment portfolios in real estate. They can even refer you to an investment professional to advise you further. Ready to take the next step? Reach out to The McIntosh Group to get started!