Florida Real Estate Braved The Waves French Gites Lifestyle Or A Business The Uk House Market And How To Survive It Danger Negative Cash Flow Real Estate

Despite the hurricanes in 2004, Florida real estate was on fire. Pre-construction developments, commercial buildings, and home constructions dotted the coast. The lenders have a field day handing out mortgages to interested investors rushing to buy properties.

Even the hurricane threat and the stigma of being a hurricane country did not stop investors of Florida real estate from backing out. What’s surprising is that after every hurricane, new rebuilding projects seem to rise up from wave-washed lands.

Then Katrina came in 2005 and wiped almost everything out. Almost everybody expected the collapse of the Florida real estate bubble. But no, the Florida real estate developers faced the challenge of rebuilding the cities and coastal areas. The result? Before the year ended, Florida real estate was back and stronger than ever. It was as if Katrina never came, and healthy business backlog sustained the finance and real estate blocks making them even more active than before. The only problem developers expect to have other than the rising cost of construction is the source of their skilled laborers. Now, this is not what you would call a dead industry, is it?

It’s a positive thing for Florida real estate that developers took the hurricane threat and turned it into a profitable venture. 2006 saw that other than coastal and beach front developments; developers started to develop properties within the cities. An example is the ongoing downtown Miami pre-construction trend that is touted to be a new Manhattan. Developers are also busy with many top priority projects certain to keep the state on the top of real estate choices as well to attract new businesses. Town centers were built in Palm Coasts and Orange City, while extensive “Gateway” complexes were started in Daytona Beach and Port Orange.

Other developments in Florida real estate include the building and development of properties in higher areas like the cliffs. Aside from the sea and beach view, these new properties also offer another feature which coastal units cannot match: elevation. Studies show that the high prices of real estate on the coast and hurricane scare shifted the demand and need towards inland areas that has higher locations, which are scarce on Florida coast.The developers saw a market for more elevated properties in the light of the recent hurricanes. People are getting interested in procuring higher level real estate as a precaution against typhoons and floods caused by hurricanes. The development of an experimental property called Owls’ Head is touted as a test for the higher elevation market. From this vantage point, I think Florida real estate braved the waves and came out on top.

Many are attracted to buying a Gite complex by the lifestyle associated with owning a gite. Lazy days in the French sun supping a glass wine or two sitting around a pool – that will do me fine! After years of 9 to 5 and hours spent on the daily commute it appears to be an attractive option.

At 1st-for-French-Property we have seen a significant increase in the number of enquiries for this type of property over the last few years. Without doubt Gite complexes often look beautiful from a distance but you must be realistic about buying into this market. Firstly, it is a very competitive market and secondly like any business it is hard work (especially in the early years). Of course, there are many successful gite businesses, and you can buy into this market!

We are not going to cover the French bureaucracy issues but concentrate on the business issues.

Remember this is a business and your approach must be professional and commercial. You need a business plan and it must be realistic. If you are buying into an existing gite business check the accounts thoroughly – what are the trends over the last few years? Check turnover and profits especially. This is a notorious “cash in hand” trade and although the owner may imply the profits are better than declared in the accounts – buyer beware! Are staff costs included or have the present owners done all the work or used un-paid family members? Is there a lot of repeat trade? What are bookings like for the forthcoming year? What capital will be needed to be injected for renovations and maintenance?

In France, the “gite season” is typically July and August – a 10 week season! Outside this period you will have to market well – probably to foreign markets – to fill your rooms! Often a more expensive gite complex will have 4 or more rentable units so that they can maximise their earnings in the “gite season”.

Some factors – and this is by no means complete – to consider in this competitive market:

a) Location, location, location – as always this is of prime importance. Is it quiet but accessible? Close to facilities? Does it have a wow factor? Imagine you are looking for a holiday – would you like to spend a week here? What do you look for in a holiday?

b) Weather – the further South, the longer the potential season (unfortunately prices are more expensive in the South)

c) Close to a Budget Airline airport? RyanAir, FlyBe, Easyjet fly to many destinations in France and can be a source of “clients” all the year around. If you want to tap into this market you need to be no more than 30 mins to 1 hour away. Are you prepared to pick up “clients” from the airport?

d) What is your USP? Pool and chic gites are no longer enough. You need to offer something extra…..wine tours, pottery, bird-watching. Yes, research your chosen area and make it work for you.

e) Are you flexible? Instead of weekly lets – would you consider chambres d’hote, or weekend breaks in the low season?

Prices? Existing gite businesses cost from 150K euros to 1 million + euros. Before you buy research the market and property. You need to find out how much competition is in the area and what prices you can charge. The internet is an excellent source for the information you need – the regional French Tourist board web sites will tell what you what the area is like and the attractions in the region. To study the competition visit one of the many French Rental sites. For example, on 1st-for-French-Rentals there are over 1000 properties across France. You can see the popular areas quickly, the facilities the gites offer and most importantly the prices you can charge during the whole year. Often each property will have a calendar and you can see the levels of booking and the extent of bookings in the Low seasons. This will give you a clue to the potential of a gite complex. Plug the figures into your business plan – does it add up? Don’t be emotional about a property if this is going to be your income in France.

So be realistic and if you enjoy hard work, this lifestyle can be yours!

According to the Nationwide Building Society, the UK housing market has made a “strong start” in 2006, with the biggest rise in house prices for 18 months, rising by 1.4% in January. This was seen by the Nationwide as part of a “strengthening trend” since October, with confidence returning to the housing market, but the high price rises of 2004 were not expected to return.

Jeremy Leaf of the Royal Institution of Chartered Surveyors said, ‘The housing market is definitely seeing signs of a recovery,’ and he predicted that, ‘modest price rises are expected to continue into the year.’

Fionnuala Earley, an economist for the Nationwide, stated that she believed that factors such as pension fears, declining consumer appetite for debt and below-average economic growth would help to restrain further house price rises in 2006.

Another sign that people are regaining confidence in the market can be seen alongside a warning from the BBC that many first-time buyers are willing to overpay in order to get onto the first rung of the property ladder. The Yorkshire Bank has announced that more than one in five first-time buyers are currently willing to offer above the asking price, compared with a year ago when less than one in ten were willing to pay over the asking price.

Gary Lumby, a Yorkshire Bank spokesman, said, “Buyers are starting 2006 in a more positive mood than last year, when there seemed to be a lot more uncertainty regarding where the housing market was going.”

Whilst more first-time-buyers purchasing property is extremely beneficial as it allows for greater movement within the market place, the increase in the number of buyers willing to overpay could be a cause for concern. With the UK personal debt level currently running at
These have been euphoric times for real estate owners in many parts of the country. Home values have spent the last two or three years tap dancing higher and higher. That’s been delightful for those that owned a home or investment property.

In the last few months those mountain high home prices have been dream busters for those hoping to buy their first home. They’ve been priced right out of the market. Even with low interest rates on mortgages and greatly relaxed lending requirements, there are many thousands of people who just can’t afford to buy a home.

All those folks who can’t buy a home are producing smiles on the faces of landlords. For many months vacancy rates were forcing sobs from rental property owners. The pool of potential tenants had been greatly reduced, because everyone was buying a home. Home prices were still relatively affordable and there were big buckets full of mortgage money available at historically low rates. People didn’t need to rent when they could buy.

The climb in home values has changed all that. Now more people are seeking good homes to rent, so the supply of available rentals becomes slim. Demand for rental homes has also been stimulated by a reduction in the number of available apartments. Owners and developers are finding that it is more profitable to convert apartments into condos then it is to rent them. The result is few apartments for rent.

But it’s not all good news for landlords.

Some eager investors bought investment homes near the top of the real estate price cycle. They paid high prices for the homes they are now offering for rent. Many are learning that the cost of mortgage payments, taxes, insurance and other normal costs are leaving them with negative cash flow. That means it is costing them more each month to own the property than they can collect in rent.

The investor’s negative cash flow can amount to as much as $500 or more. Each month the owner must take those hundreds of dollars out of his/her pocket to make up the short fall between rents collected and money paid out in loan payments and so forth. That’s called an alligator property, because it can eat you alive.

Negative cash flow can be avoided by making a larger down payment on the property. You then have a smaller mortgage loan with smaller monthly payments. If you have planned correctly your rental income should then cover all your costs and expenses of owning. The down side is that you have a large amount of cash locked into one property.

Leverage is one of the keys to making big money in real estate. A small down payment let’s you control a $300,000 property, for example. If you put $15,000 (5%) down on that $300,000 home and the property appreciates in value at the rate of about 10% annually look what happens. At the end of three years the property is worth about $400,000. You’ve made a gain of near $100,000 on your $15,000 investment, in just 36 months.

Some investors count on that appreciation, plus the tax benefits of own investment property to make up for the negative cash flow of their investment. That’s a great idea as long as home values in the area really do continue to climb. It may come as a shock to some that every once in a while property values go down instead of up. That spells trouble and an increase in the rate of foreclosures.

The wise investor always buys at a price that will allow him to prosper no matter what happens to real estate values.

These have been euphoric times for real estate owners in many parts of the country. Home values have spent the last two or three years tap dancing higher and higher. That’s been delightful for those that owned a home or investment property.

In the last few months those mountain high home prices have been dream busters for those hoping to buy their first home. They’ve been priced right out of the market. Even with low interest rates on mortgages and greatly relaxed lending requirements, there are many thousands of people who just can’t afford to buy a home.

All those folks who can’t buy a home are producing smiles on the faces of landlords. For many months vacancy rates were forcing sobs from rental property owners. The pool of potential tenants had been greatly reduced, because everyone was buying a home. Home prices were still relatively affordable and there were big buckets full of mortgage money available at historically low rates. People didn’t need to rent when they could buy.

The climb in home values has changed all that. Now more people are seeking good homes to rent, so the supply of available rentals becomes slim. Demand for rental homes has also been stimulated by a reduction in the number of available apartments. Owners and developers are finding that it is more profitable to convert apartments into condos then it is to rent them. The result is few apartments for rent.

But it’s not all good news for landlords.

Some eager investors bought investment homes near the top of the real estate price cycle. They paid high prices for the homes they are now offering for rent. Many are learning that the cost of mortgage payments, taxes, insurance and other normal costs are leaving them with negative cash flow. That means it is costing them more each month to own the property than they can collect in rent.

The investor’s negative cash flow can amount to as much as $500 or more. Each month the owner must take those hundreds of dollars out of his/her pocket to make up the short fall between rents collected and money paid out in loan payments and so forth. That’s called an alligator property, because it can eat you alive.

Negative cash flow can be avoided by making a larger down payment on the property. You then have a smaller mortgage loan with smaller monthly payments. If you have planned correctly your rental income should then cover all your costs and expenses of owning. The down side is that you have a large amount of cash locked into one property.

Leverage is one of the keys to making big money in real estate. A small down payment let’s you control a $300,000 property, for example. If you put $15,000 (5%) down on that $300,000 home and the property appreciates in value at the rate of about 10% annually look what happens. At the end of three years the property is worth about $400,000. You’ve made a gain of near $100,000 on your $15,000 investment, in just 36 months.

Some investors count on that appreciation, plus the tax benefits of own investment property to make up for the negative cash flow of their investment. That’s a great idea as long as home values in the area really do continue to climb. It may come as a shock to some that every once in a while property values go down instead of up. That spells trouble and an increase in the rate of foreclosures.

The wise investor always buys at a price that will allow him to prosper no matter what happens to real estate values.

.
advice, business, buyers, cash, developers, estate, florida, flow, gite, higher, home, house, hurricane, information, investment, market, mortgage, properties, property, real, real estate, rent, season, uk, values, work, years