Many people are tempted to start investing in Central Florida now that the market prices are so low and interest rates are at historical lows. There is a lot of attraction to investing in Central Florida because of tourism, beautiful beaches and theme parks as well as golf courses and good weather.

Investing in Real EstateThe most common mistake investors make when investing in Central Florida Real estate is to become overly emotionally involved in a property. They see a property that they want, fall in love with it and want to buy it. What they don’t see is that this gorgeous 3 bedroom, 2 bathroom home in that beautiful gated community comes with high homeowner’s association fees and other fees that make the investment less than viable.  What you want to do is ask for an investment analysis, which will show you anticipated costs associated with purchasing and maintaining the property and anticipated Return On Investment (ROI).  You may also want to double check with your accountant before you purchase the property to make sure that everything makes sense.

Another common mistake is to not have a plan. Looking for the right property from the beginning saves you time and money. Make sure that you know what you are looking for first before you start trying to snap up deals. The deals are out there, but what fits you and your investment portfolio may not be that really inexpensive condo selling for $10,000 in Metro Orlando.

Don’t make the mistake of not knowing the people that you are working with. A seasoned investor knows that he needs a good team, make sure you have a great accountant that you trust and are able to communicate with, a Realtor that understands your needs and a Property Manager that will protect your investment. A good lawyer may also be needed from time to time to make sure that your interests are protected. Other people you want to have a good working relationship with are a lender, home inspector, an appraiser and insurance agent.

All too often investors will buy a property that needs a little bit of work, often referred to as a handyman’s special and take the project too far. It is fun doing a design project or a home make over project, but this is an investment, not your home or vacation property and you need to treat it as such. Overly fancy ornaments, decorative motives stenciled into the paint, and other projects may be unnecessary and more costly than what was originally budgeted for. You need to make sure that you always have a buffer in your budge, in case a rehab does go over budget since sometimes problems sometimes do not show until after work has been started.

Consult the cost vs. value web-site to better understand how much you recoup in value from the updates that you make on your property. http://www.remodeling.hw.net/2010/costvsvalue/national.aspx

 

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Make sure that you always do your research before buying an investment property, not understanding how the market is doing could be a great obstacle in reaching the profits that you anticipate. Understand that Real estate is a long term investment and if you are looking for a quick profit, this is probably not the best investment opportunity for you.

Best of luck in your investment ventures!

Contact Erna and Petur Sigurdsson, Realtors at The Viking Team, Realty at 321-263-5096 for help buying or selling a home in Longwood, Lake Mary, Altamonte Springs, Sanford, Seminole and Orange County and the surrounding areas of Central Florida. To Search For Homes For Sale in Central Florida Click Here. 

Photo credit: ThinkPanama and Horia Varlan