Sarasota Homes – Time To Invest?

Real estate has been beaten up pretty badly over the last five years. The only people who have prospered during this time are the ones who do not own property. The country has never witnessed a meltdown in the real estate market of this magnitude. It has not only affected the United States but much of the world. The credit crisis of 2008 was directly caused by the bursting property bubble.

Warren Buffett once said, “Be fearful with everyone is greedy and be greedy when everyone is fearful.” It is safe to say that many people are fearful right now. Real estate is now looking very attractive. Everything runs its course and eventually the market will bottom. Many areas of the country might have already bottomed.

The Sarasota real estate market appears to be bottoming. Prices will likely fall further but I doubt the drop will be significant. The average sales price has been flat for a long time. The number of Sarasota homes and condos for sale have declined dramatically and have leveled off. Currently, Sarasota has about an 11 month supply of properties. That is a far cry from the 33 month supply Sarasota had in late 2007.

Sarasota Homes

Regardless of the lifestyle you want to live Sarasota, Florida offers plenty of home and condo options to accommodate you. Like golf? There are many great golf course communities in Sarasota. Are you a boater? There are plenty of fabulous waterfront neighborhoods in the area. Beach lover? The barrier islands are gorgeous and offer a variety of homes and condos on the beach. Want to live a metropolitan lifestyle? Downtown Sarasota offers numerous condo buildings where walking to everything is easy.

Many home buyers are still waiting on the sidelines for fear of lower prices. No one wants to buy and have their purchase worth less a year later. The Sarasota housing market will eventually bottom. It may already be there. If you are looking to buy a home in Sarasota then you need to mindset from ten years ago. Forget the quick buck. We are back to slow, long term growth.

Time Value of Money

The time value of interest is a very powerful wealth builder. However, it requires patience. Imagine buying a home for $500,000 where you put down $100,000 and mortgage $400,000. If the Sarasota real estate market appreciates at a modest 3% a year after 5 years your investment would now be worth almost $580,000. On a $100,000 investment you have earned $80,000. However, if you wanted to realize that gain you would need to sell the home and incur some transaction costs. Even after the cost of selling you would still have a nice profit.

Owning Rental Property

If you ever wanted to own rental properties in Sarasota this is the time to start looking. You can now find a positive cash flow which we have not seen in many years. Imagine investing in 5 rental properties worth $100,000 each. If you put $20,000 down on each one you would have invested a total of $100,000. Now assume these five homes grow at a modest 2% a year. After 15 years when your mortgages are paid off these five homes would be worth over $670,000. Your $100,000 investment grew to a portfolio of five homes generating a nice monthly cash flow. This is a great way to build up a nice nest egg for retirement. It just requires some wise investing, patience and property management.

Al Czervik – Likes to write about Sarasota Homes

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