Canadians owning a second home in Florida will find that Short Term Vacation Home Rentals to be a great way to subsides the cost of owning a property. Canadians typically like to spend winter months in Florida, while Americans travel to Florida during summer periods while kids are out of school. A good short-term rental program can be the perfect fit, but it does require some knowledge.

Here are a few pointers to select a property that is desirable to potential short term renters and long term tenants.

• Speak to local rental agents. Real Estate agents who specialize in rental properties have a clear understanding of what home renters look for in both long term and short term vacation home rentals. Agents who focus on buy and sell of properties often consider rental transactions too time consuming and may not provide investors with the most relevant information.
• Compare prices and levels of services offered by property management companies in the area if you do not live in the same city. Investigate if the agents or companies that specializes in short-term rentals in the area. Making contact with local handyman is essential as rental properties experiences more wear and tear then your own home.
• Conduct you own research to find out where the demand is. Read local newspaper classified Ads, visit short-term rental websites, and drive around local tourist attractions. This will give investors solid information on what is the most popular, in which area and for what prices. Try to locate a property with at least two attractive attributes such as “view”, “proximity to theme parks, golf course”, “beach side”, “Lake front”, “fitness facilities”, etc.
• Do not judge a property based on peak season rental income alone. Collect information on off-season rental as well. Investors must balance the potential income gaps between full price peak season fees, off-season discounted rate, and non-income months during vacancies and owner’s self -enjoyments.
• Talk to an accountant to verify that the income you can realistically expect to receive is appropriate for the home’s purchase price. More importantly, evaluate your financial position carefully to see if you can afford the investment property after all taxes, agent’s fees, maintenance fees, regular property upkeeping and unexpected expenses.
• If the targeted area attracts lots of senior citizens, one-level living may be the best choice. Avoid homes where renters must climb a flight of stairs to reach the entrance.
• Look for a property within a reasonable distance of shopping and area attractions. Check to see if it is accessible by public transit system and if parking is available.
• Find a well maintained home, or at least one that does not need a major renovation. Investors must bear in mind that a Non-attractive vacation property may not generate the desired occupancy rate and level of income.
• Before buying a home in developments, make sure the restrictive covenants allow rentals.
• Purchase home insurance and do disclose that it will be used as a vacation rental home. Insurance companies can refuse to compensate the property owner if the purpose of use was misrepresented. Investors must protect themselves against possible damages and accident claims.

Rental properties can be a good investment, taking these simples steps can ensure this process go more smoothly and the return more profitable.

Foreclosures and short sales in US Real Estate seem to be great deals, but let the buyer beware: You could be buying a money pit.

A foreclosed home is bought as is and will not have the history available that a seller would be able to give you. This means you will buy the home and accept the flaws it may have; in many cases the former owner will have ceased taking care of it before the home went into foreclosure. Remember you’re dealing with people with big financial problems and you don’t really know what you’re getting.

Buying a foreclosed home will often result in additional waiting time as well as work. Also remember you need to have cash on hand because of the short time frames involved in closing.

Do your homework:

• Title searches
• Hidden leans and claims
• Damage from disgruntled homeowners
• Hidden maintenance issues
• Unpaid taxes

The National Association of Home Builders announced on May 19^th, 2009 that the market for the newly built, single-family homes in the USA improved for a second consecutive month in May to the highest level since September of 2008. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) rose two points to 16 this month.

NABH Chairman, Joe Robson noted several factors contributing to the rise in confidence level in the US real estate market. Favorable mortgage rates, $8000 tax credit for first time home buyers, affordable prices and the multitude of home choices are appealing to potential home buyers and investors to make a move.

Many real estate professionals reported not only are they seeing local homebuyers with solid financials showing interest in the market.  They are also reporting a slow rise in foreign interest in US real estate. Although these foreign real estate investors do not qualify for tax incentives, however the potential return on attractively priced quality real estate properties is enough to them focused and interested in US properties.

The New York Post reported the Chinese Ministry of Commerce will be bringing 400 executives to the U.S. and Canada next month to shop for distressed assets. Any significant buying by Chinese investments would further bolster Beijing’s presences in the US economy.

While it remains unclear which specific companies might be targeted, but it looks like the Chinese have strong interest to take advantage of the weakened North American auto industry.

Last month the “U.S. Real Estate Investment Expo” in Beijing attracted thousands of serious potential private investors looking for discounted real estate in the US. Although the first quarter export figures of China dropped more than 10% in the first quarter of 2009, but its GPD remains stronger than most other countries in the world.

This could be a sign that smart investments are sensing the timing to enter the U.S. real estate market is coming sooner than some economist many predict.

Industry experts and our Central Showplace spot poll results are consistent as many conflicting opinions still exist:

 DONALD TRUMP

“It’s one of the best times to buy real estate”, said Donald Trump, chairman and president of the Trump Organization.

“It’s an amazing time to buy,” Trump said. “This is the best time I’ve ever seen to buy both real estate and probably other things. This is one of the great opportunities.”

SAM ZELL

Billionaire investor Sam Zell made what is acknowledged to be one of the best-timed investment decisions ever by selling his real estate empire at the peak of the market in February 2007.

Zell, sold his holdings in the U.S. office market by selling Equity Office Properties Trust to Blackstone Group LP for $39 billion including debt in the biggest leveraged buyout at the time. The sale earned Zell approximately $900 million.

Zell, chairman of Chicago-based apartment REIT Equity Residential, said there are signs the housing market may be starting to recover.

The single-family housing market is starting to “bottom out” and “this summer we’ll see equilibrium,” he said.

MARK FLEMING

“We expect home prices to continue to decline into 2010 as economic conditions and excess housing inventories dampen prices,” Fleming said in the report. “Decreases are now being driven by rising unemployment and a high volume of distressed home sales.” Mark Fleming, the chief economist for First American CoreLogic Inc.  in Santa Ana, California.

The percentage of all U.S. homes empty and for sale, known as the vacancy rate, fell to 2.7 percent in the first quarter. It hit an all-time high of 2.9 percent in the first and fourth quarters of 2008, the Census Bureau said.

 DANN ADAMS

More U.S. consumers are falling behind on their mortgages, an indication that the housing market has yet to hit bottom.

Dann Adams, president of U.S. Information Systems for Equifax, reported that 7 percent of homeowners with mortgages were at least 30 days late on their loans in February, an increase of more than 50 percent from a year earlier.

He also said 39.8 percent of subprime borrowers were at least 30 days behind on their home mortgage loans, up 23.7 percent from last year.

“I’m trying to find optimism in these numbers, but I’m pretty hard pressed to do that despite a recent burst of relatively positive news that has fueled hope that the U.S. housing market has turned a corner” Adams said.

 SPOT POLL RESULTS

Central Showplace Spot Poll Results seem to reflect this optimistic but cautions outlook:

With the slow down of the US economy and the strength of the Canadian Loonie, it is a good time for Canadians to buy US Real Estate?

63% - Yes, now is a good opportunity to buy.

27% - Yes, but I’m waiting for prices to fall more.

10% - No way, it’s a bad time to buy.

The decline of Real estate values across America has affected the price of homes in virtually every city in America. Homes in many areas are now being offered at prices that have not been seen for years.

Stories about the bursting housing bubble look for an explanation. These stories point to the lack of available credit that has in turn resulted in a lack of financing for real estate, they point to a faltering economy with major job losses being announce every month, they point to a lack of buyers and describe a real estate market that was overbuilt and over priced that was spurred by easy credit and over-zealous buyers and sellers. Whatever the reason, the simple fact is, there has been a serious erosion of value.

While the market might be priced right for buying that second home in the US, it is still important to realize that looking for the house that fell the most in value may not be the right path to finding the best value. In fact, you might find that the home with best value is not in an area that has been crushed.

“The three most important words in real estate are; location, location and location!”
Will Rogers

This is sage advice and it still holds true today. The very first thing that you should want to determine in your search is the location for your second home. We receive calls every day from people that simply say; “I want a place in Florida.” Well, Florida is a pretty big state and has a lot to offer so it is important to be able to narrow that search down to at least a city and then to at least a neighborhood.

“It’s how you live!”
Artist - Point of Grace

Almost everyone will agree that where you want live is important, but how you want live will eventually weigh heavy on your final choice. When you are looking for that second home, you should be able to list the amenities and activities that are important to you.

“If it sounds too good to be true, it probably is”
Quote: Almost everyone you know!

There are not that many things that actually reflect their true value like real estate does. The value of real estate is constantly in flux and determined by a cocktail of influencing factors. There are indicators that are easy to find that will report on the market; like amount of time it will take for the current demand to absorb the current number of homes that are being offered for sale, the average number of days that a home is staying on the market before it is sold and the relationship between the asking price and the selling price of the home. There are other factors like the actual price of the home, the availability of financing and the total monthly cost of ownership that also influence the demand and eventual value of a home. The condition of the local economy will also influence the value of a home. Is the local economy creating jobs or losing jobs and what kind of paycheck is associated with the jobs that make up the work force? There is a lot to take in.

The bottom line is that just because the price of a home has fallen to an all time low does not make it a great buy. Location is still the most important factor when you are searching for that second home

By: Harold Green

Central Showplace

A study conducted by the National Association of Realtors (NAR) for the Realtor Association of Greater Miami and the Beaches (RAMB) provides a profile of homebuyers in Miami-Dade and Broward counties.  The 2008 Profile of Home Buyers and Sellers provides a comparison of the current state of the South Florida real estate market, and how it compares to the rest of the state and the nation.

• A significantly higher number of South Florida home buyers were born outside the U.S.  44 percent of South Florida buyers were not born in the U.S. compared to 17 percent in Florida and 9 percent in the U.S.
   
• The median age of South Florida homebuyers is 41 compared to 43 in Florida and 39 for the entire U.S.  For first-time homebuyers, the median age in South Florida is 34 compared to 32 in Florida and 30 for the entire U.S. 
   
• The 2007 median household income of homebuyers in South Florida was $74,000 compared to $68,500 in Florida and $74,900 in the U.S.

The U. S. Sunbelt states have a well-known history of attracting large numbers of domestic and international tourists along the U. S. coastline.

Tourists have several available options when it comes to their choice of accommodations, ranging from hotels and motels to the luxury condominiums and resorts.  For families, providing accommodations over a extended vacation, hotels and resort daily rate cost become significant. A growing trend is to choose Short Term Vacation Rentals.

Short Term Vacation Rentals typically offer accommodation by the week or by the month and are generally located in the heart of vacation destinations which have access to local amenities and attractions like the beaches that line the coast of the Carolinas or the Gulf Coast as well as the vacation hot spots like Orlando’s Disneyland Resort or Galveston’s Moody Gardens.

Instead of renting a hotel room for mom and dad, a room for the kids and a room for the grand kids, the extended family rents a three or four bedroom vacation home.  When you do the math for three or four hotel rooms, diners out and add a collection of rental cars, it is easy to see how quickly the costs jump up and how attractive a $3,500 a week vacation home can become.

THE VACATION RENTAL MARKET

The future for Short Term Vacation Rentals is bright. 

The Recent Vacation Rental Management Association (VRMA) has compiled research that confirms that the vacation rental industry is in fact growing and becoming more professional and competitive as more and more products are brought online to provide more and more opportunities for vacationers find that vacation home for the family.

VRMA also reports that the inventory of short term vacation homes that are being offered for rent is increasing every year.  As more second homes are purchased, more short term leasing opportunities are being created.  Obviously a second home owner will not want to enter into a long term lease, so their only opportunity to benefit from owning a second home is to rent it for a short period of time.

There is data confirming the fact that more and more of the second homes are being purchased for use by homeowners and that these homes are also being rented out or used as investments.

As a result, there is a growing market of second homeowners that are seeking out properties that have quality vacation rental management firms that can provide rental services and property management in place.

When you research the second home and the Short Term Vacation home industry, it is pretty easy to confirm this trend.  Almost all of the data you will find will confirm that the inventory of short term rental homes is continuing to rise in many of the destination vacation real estate markets where second homes are being purchased.

VRMA also reports that the income from vacation rental operations is continuing to rise as the Short Term Vacation Property become a more recognized and sought after alternative.

MANAGED OWNERSHIP SOLUTION

Owning a well located, professionally managed, short term furnished vacation property provides an excellent opportunity for Canadians to enter into the US Real Estate market.  The fact that the lease term is short and that the stay is being compared to hotels and resorts increases rents to a point where properties can break even when they are only rented out half a year or so.

This is the ideal situation for a Canadian that would like to rent out their property in the summer in the high season and vacation down south in the winter avoiding the sleet and snow of our winters.  They will quite often be able to manage a scenario where they will be able to stay for a few months for free.

Central Showplace is featuring buying opportunities of short-term rental properties of two, three and four bedroom furnished condominiums and homes that are located in the heart of tourist hotspots and that are ideally suited for families who want to vacation together. 

Harold Green

Central Showplace

A U.S. real estate investment expo held in Beijing, China April 10th - 12th had a great turn out as Chinese buyers took advantage of the discounted U.S. real estate. The Chinese economy is far less affected by the current crisis compared to the U.S. combined with the high savings rate of Chinese households, puts the Chinese buyers in a great investment position. Chinese buyers flocked to the expo to finds ways to take advantage of the situation and buy discounted U.S. real estate.

Exhibitors showcases new developments from all over the U.S. as well as discounted resale and government auction solutions. Central Showplace interviewed buyers show particularly strong interest in Florida and Texas. One Texas developer used China’s own Yao Ming to draw crowds of attention and making front page of a local newspaper.

The three-day event concentrated on investment potential of U.S. real estate. Despite the strong Chinese economy buyers were interested in diversifying investments. While other were drawn by the investment U.S. green card opportunities available though the EB5 program. Investors say this is a great time to participate in an investment immigration U.S. green card because the underlying property is so heavily discounted.

More images from the China-USA real estate expo visit our photo gallery

The frenzy is consistent with comments by Lawrence Yun, National Association of Realtors chief economist, “A steady share of investment-home sales results from buyers taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix.”

Many analysts believe that the U.S. government plans are starting to turn around the U.S. real estate market. “Over time, lower mortgage rates should help to improve conditions in the housing market, whose persistent weakness has had a major impact on economic and financial conditions more broadly,” Bernake said.

Forecast by the mortgage bankers’ group raised its 2009 home-loan originations by $800 billion to $2.78 trillion last month. Refinancing will increase to $1.96 trillion in 2009 and purchase originations will total $821 billion. This is evidenced by a surge of refinancing and low interest rates sent homeowners to apply for new loans.

For foreign investors the interest shown by the Chinese buyers is definitely a sign that this is the right time to take advantage of the U.S. real estate discounts.

More images from the China-USA real estate expo visit our photo gallery

U.S. Federal Reserve Chairman Ben S. Bernanke is delivering record low mortgage rates and a refinancing boom that’s putting cash in home owners pockets and helping to stabilize house prices.

Fixed 30-year mortgage rates fell to a record low for the second consecutive week last week, hitting 4.78 percent, Freddie Mac said yesterday in a statement. The rates are the lowest in records dating back to 1971. This has helped mortgage applications in the U.S. rise for the fourth straight week as a decline in borrowing costs spurred homeowners to refinance, and new home sales rose in February. The Fed’s effort to bring down fixed rates may give consumers as much as $25 billion, said Mark Zandi, chief economist of Moody’s Economy.com.

Cheaper Home Prices

Cheaper financing may also help to turnaround the housing market. Sales of previously owned homes rose 5.1 percent to 4.72 million at an annualized pace in February from the prior month as low mortgage rates spurred demand. The National Association of Realtors affordability index rose to a record in January, due to lower home values and mortgage rates. NAR said in a March 23 report, the median U.S. home price fell to $165,400, down 28 percent from its 2006 high.

Bernanke cited lower mortgage rates in testimony in February as evidence that Fed policies were working. He said the decline in financing costs caused by the central bank’s purchases of mortgage-backed securities this would help ease the financial strain on homeowners.

Improving U.S. Housing Market

“Over time, lower mortgage rates should help to improve conditions in the housing market, whose persistent weakness has had a major impact on economic and financial conditions more broadly,” Bernake said.

Forecast by the mortgage bankers’ group raised its 2009 home-loan originations by $800 billion to $2.78 trillion last month. Refinancing will increase to $1.96 trillion in 2009 and purchase originations will total $821 billion. This is evidenced by a surge of refinancing and low interest rates sent homeowners to apply for new loans.

“We have seen evidence that home sales are bottoming,” said Jim O’Sullivan, senior economist with UBS Securities LLC, in Stamford, Connecticut. “This should be positive.”