Miami, FL (PRWEB) July 20, 2006
In South Florida and most other places in the U.S. the supply of homes and condominiums exceeds demand and subsequently prices are starting to decline. However, “even in declining markets it is possible to invest in real estate and realize a good profit on your investment, or to sell your own home and get an above-market price for it,” says Miami Realtor, Izzy Buholzer.
Bulholzer, whose firm Home & Business Realty, Inc. specializes in residential and investment real estate in Miami and South Florida said that , “One of the ‘secrets’ of making money in declining markets is to utilize a ‘lease with option to buy’ strategy.”
He explained that a lease-purchase is advantageous to property owners as well as buyers for a variety of reasons.
According to Buholzer, lease-purchase properties are more attractive than ordinary rentals.
“Many people want to own their own house or apartment but are just not ready to do it immediately. If you offer your property as a ‘lease-purchase’ or ‘rent to buy’ then you will get more responses to your advertisements, and will be able to get a good tenant more quickly,” he continued.
Another advantage in lease-purchase arrangements is that it attracts more “responsible” tenants, which leads to lower maintenance costs.
“People who have entered into a lease purchase arrangement will treat the house or apartment as their ‘own’ because they have a good hope of owning it outright in the near future,” Buholzer explained.
However, it is not only lower costs that make the lease-purchase attractive for property owners. The cash-flow for the owner is greater when there is a lease-purchase arrangement in place.
“The reason for this is that in addition to collecting the rent a portion of the option fee will be payable each month,” Buholzer said.
The option fee is the amount that the tenant pays in order to reserve the right to purchase the property at a future date.
In addition to lower maintenance costs, the property can be sold up to 15% above the prevailing market price. Buholzer explained that “you can getter a higher amount for the property because the people who are renting from you would not be able to otherwise buy a house are willing to pay a bit more in order to get a chance to buy a property that is attractive to them.”
To illustrate the point of why there are now declining real estate markets, Buholzer pointed out that “in the Miami area over the last four years an estimated 40 % of new homes were bought by investors and speculators. Inventory (homes on the market) has tripled in the last twelve months while sales have dropped to less than 8 % per month. On top of that, in the last three years 10 times more condos were being built/approved than in the entire previous ten years. That’s 70,000 vs. 7,000.”
Buholzer said that despite this seeming oversupply of housing or “declining market,” investors and careful homeowners have been able to get a good return on their investments by using the lease purchase strategy.
For more information visit Mr. Buholzer’s website http://www.ibmiami.com