Is
Water Front Property a Good Investment?
You have heard an adage about investing in real estate before. If you
want to make money in real estate there are just three easy answers. Location
- Location - LOCATION
You might have noticed that supply and demand has pushed the price of real estate in London sky high. Well, if you are buying outside London, what are you doing to make your property more valuable than all the surrounding property? I suggest that you buy on WATER. Here are a few comments from other people about the effects of investing in real estate found on water.
The location of a property can affect how fast it appreciates in value. Water properties have been increasing in value at a fast pace. There is a finite amount of water property available in the United States and demand has been increasing. More and more people are reaching retirement age fueling the demand for recreational property.
I think the most important variable in looking for these deals are finding something that will appreciate over time and build maximum equity for your portfolio. It is my opinion that when this market turns around waterfront property will be the first genre of real estate to grab appreciation. Waterfront property is scarce, it can't be duplicated, and demand is the highest for this type of property. 7 out of 10 investors I work with ask, "how far is this property from the beach"? We all know when season rolls around every year, midnight pass becomes jam-packed with cars trying to find a parking spot on Siesta Key. The sun shines here and people love the beach. This will never change. So, the real estate does benefit from that demand. I always start my search as close to the water as I can get & work my way towards the listings with owners in the most stressful situations. Bottom line: Waterfront property is what people want and it will appreciate first when our market turns around.
In order to substantially increase in value, a product or service must
be in high demand and in low supply. Baby boomers are retiring to Florida
with unprecedented wealth. They have sold businesses and real estate in
other parts of the State or country and are moving to Central Florida
in great numbers. In addition, many younger people are purchasing property
knowing that if they don’t buy now they will never be able to afford
a lakefront home in the future. Florida lakefront and waterfront property
is rare and in high demand. Over the past five years, Central Florida
lakefront property has appreciated at over 30% a year and in some case
is doubling and tripling in a very short time. How long this rapid appreciation
will continue is anyone's guess, but living on or near water remains one
of the strongest reasons people give for moving to Florida. As long as
people continue to want to live on the water, Florida waterfront property
will continue to increase in value.
While new properties have underperformed the market as a whole, so existing properties must have outperformed it. The difference over the entire 24 years is quite pronounced: a 550% gain for existing properties, compared to 450% for new builds.