web analytics
skip to Main Content

Real Estate Investing: Finding Returns In A Low Yield Environment

Questions I often get asked by individual investors:

Where should I put my money?

Where can I get a good return?

And are there any opportunities in the market now?

 

Option A: Miami Condos

Some of the people asking me about investments have owned in condos here in Miami. As it stands right now, the Miami condo market has two disturbing trends: condo transaction volume keeps dropping and aggregate value of condo inventory keeps rising.

Until these trends reverse, I cannot recommend that individual Miami condos be purchased purely as investments.

The only real opportunity to profit off of condos is by purchasing near the bottom of the cycle or very early in an uptrend. Miami real estate is still very volatile, and you can make money by waiting for compelling prices and net cap rates. Condos have significant carrying costs (maintenance and property taxes), are not very liquid, and have high transaction costs. So you really have to make sure you are getting in near the bottom to justify holding them.

 

Option B: REITS

REITs obviously offer more diversification than owning individual properties and are far more liquid.

What needs to be considered:

REITs have a strong positive correlation with the stock market.

REITs US Stock Market Correlation

 

Since 1972, REITs have generally stayed between a 0.56 and 0.72 correlation to the US stock market. The correlation low was around 2000, when the US stock market was in the midst of the dot com boom. The irrationality of a tech-bubble stock market resulted in a short lived, very low REIT correlation.

Why is this positive correlation to stocks important to keep in mind now?

US stock market valuation multiples (such as the Shiller PE and the price:sales ratio) are at levels that have always been followed by losses and very low returns over the next ten year period.

If we have a dip in the stock market, REITs will be affected.

Option C: Treasury Bonds

The 30 year treasury bond is currently paying 2.8%.
This is obviously not a great return.

While treasury bonds are liquid and safe, they do not provide protection against inflation.
Should inflation rise at all while you hold bonds, you’ll be out of luck.

Corporate bonds are providing slightly higher returns, but with greater risk.

 

Option D: Income Producing Commercial Real Estate

It is still entirely possible to get a 5% or even 6% cap rate with solid, income producing commercial real estate in Miami.

While less liquid than bonds, you get a significantly higher return. And should inflation go up, you will be protected as rents will most likely increase.

Furthermore, purchasing self-standing commercial properties opens you up to the possibility of benefiting from Miami’s continuous growth and expansion. You stand to potentially benefit from future up-zoning as well as acquisition by developers looking to put together multiple parcels.

 

Ask yourself: where are there shortages in the market?

 

While the Miami condo market is suffering a decline in demand, the city has a severe shortage in affordable and Section 8 housing.

With Section 8 housing in particular, there is excellent opportunity to get some fantastic returns. A multi-family structure converted to Section 8 would generate stable rent, direct-from-the-government.  Section 8 rent is, generally speaking, above market rates and the tenants are single moms who don’t want to move. It is quite possible to get an 8+ Cap with Section 8 housing in Miami. And I cannot emphasize how much better it is to get rent money from the government rather than having to collect from individual tenants!

There are excellent returns to be found in the Miami real estate market today.

You just need to know where to look.

Contact me for further information.

48
Leave a Reply

avatar
48 Comment threads
0 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
5 Comment authors
jymoPelveikcrthirldhkiGaunkzzwvDiarpAleksandra Marzec Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
Aleksandra Marzec
Guest

Ana, what do you think about condo hotel market and short-term rentals. I get a lot of request from new buyers about that.

trackback

canadian pharmacy uk delivery http://cialisonli.com/

Many thanks. Ample data!

trackback

pharmacy http://irususpren.strikingly.com/

Thanks a lot, Loads of information.

trackback

list of reputable canadian pharmacies http://osprudbudto.strikingly.com/

Great posts. With thanks.

trackback

canadian pharmacy online 24 http://timeout.pro/how-do-i-differentiate-if-i-am-having-a-pity-attack/

You stated that adequately.

trackback

Discount viagra http://verdohelp.strikingly.com/

Cheers. Fantastic information!

trackback

Generic viagra http://geschviterg.strikingly.com/

Nicely put, Regards!

trackback

generic for cialis http://cialisvi.com/

Nicely put, Thanks!

trackback

Viagra for sale http://viagravipsale.com/

Seriously tons of amazing info!

trackback

canadian pharmacy viagra brand http://www.buylevitraa.com/

Many thanks. Excellent stuff.

trackback

Google

Although websites we backlink to beneath are considerably not associated to ours, we feel they may be truly worth a go by means of, so possess a look.

trackback

pharmacy canada http://www.viagravonline.com/

Really a good deal of great information!

trackback

top rated online canadian pharmacies http://www.viagravonline.com/

Awesome information. Cheers.

trackback

online pharmacy http://www.buylevitraa.com/

Nicely put, Thanks a lot.

trackback

canadian online pharmacy http://www.viagravipsale.com/

Information very well taken!!

trackback

canadian pharmacy viagra brand http://www.viagraessale.com/

Terrific info. Thank you!

trackback

canadadrugs http://www.viagrayosale.com/

Whoa lots of beneficial tips.

trackback

canadian pharmacies online prescriptions http://www.viagravonline.com/

Nicely put. Regards!

trackback

Google

The details talked about within the write-up are a few of the top accessible.

trackback

canadian pharmacy viagra http://canadianpharmacyes.com/

Nicely put, Many thanks!

trackback

viagra canada http://canadianpharmacyonl.com/

Lovely forum posts. Thanks.

trackback

canada drug pharmacy http://canadianorderpharmacy.com/

Cheers! Lots of advice!

trackback

online canadian pharmacies http://canadiantousapharmacy.com/

Kudos, Quite a lot of stuff!

trackback

canadian rx world pharmacy http://ukcanadianpharmacy.com/

Thanks! Loads of info.

trackback

canada drugs http://babecolate.com/

Thank you! I like this!

trackback

canada online pharmacies http://babecolate.com/

Nicely put, Thanks a lot.

trackback

canadian pharmacy viagra brand http://babecolate.com/

Nicely put, Many thanks.

trackback

canadian pharmacy cialis http://canadianpharmacyes.com/

Terrific material. Appreciate it!

trackback

Canadian Pharmacy USA http://withoutadoctor.viagraiy.com/

You definitely made your point.

trackback

legitimate canadian mail order pharmacies https://canadianpharmacyonli.com/order-amoxil-online-en.html

You actually expressed this really well.

trackback

canadian pharmacies online https://viagravonline.com/

You actually revealed it exceptionally well.

trackback

northwest pharmacy canada http://eaxbridme.webcindario.com

You said this wonderfully.

trackback

best canadian mail order pharmacies http://disgagar.webcindario.com

Thanks, I enjoy it.

trackback

Canadian Pharmacies Shipping to USA http://prefuncal.webcindario.com

Truly plenty of wonderful advice!

trackback

canadian online pharmacy http://sorplinet.webcindario.com

You definitely made your point.

trackback

northwest pharmacy canada http://scoranter.webcindario.com

Seriously a lot of good advice!

trackback

buy viagra 25mg http://cartiwind.webcindario.com

Truly a good deal of useful info!

trackback

online pharmacies http://timogo.webcindario.com

Amazing tons of terrific knowledge!

trackback

safe canadian online pharmacies http://bassomab.webcindario.com

Helpful tips. Appreciate it.

trackback

canadian cialis http://carhiyjud.webcindario.com

Really many of good advice!

trackback

northwestpharmacy http://fliberin.webcindario.com

Beneficial postings. Thank you!

trackback

canada drug http://dabbredqui.webcindario.com

Thanks. Lots of stuff.

trackback

canada viagra http://diolcanec.webcindario.com

Thanks a lot! Quite a lot of stuff!

trackback

canadian discount pharmacies http://budhkesur.webcindario.com

Effectively expressed of course! .

zzwvDiarp
Guest

debit card loans [url=http://cashfastlot.com/]installment loans[/url] personal loans quick loans advance cash on line

dhkiGaunk
Guest

payday loans no faxing [url=http://paydayloansuyi.com/]payday loans without faxing[/url] payday loans no lenders cash to payday loans payday loans colorado

ikcrthirl
Guest

24 hour loan [url=http://moneylendingbtd.com/]quick loan[/url] cash loans in an hour cash loan no credit check cash america

jymoPelve
Guest

cashadvance [url=http://loanpaydaythz.com/]fast cash 500[/url] paycheck advance home loans for bad credit payday express

Contact Ana

Stay Informed

Receive Miami Real Estate Reports and updates as they are published. Max email frequency is once per week.

I will never spam you or share your information.
Back To Top