Early June 2015, Rick Singh, Property Appraiser for Orange County, Florida released the state of Orange County Real Estate in 2015. I have summarized some of the points, but for the complete report go here: http://www.ocpafl.org/Content/Dynamic/File.dynamic/FID/402836/
1. Market value of Real Estate increased 9% or U$11.3 billion in 2015.
2. Real Estate Market has rebounded strongly since 2000.
3. Below factors are fueling this growth
4. Approximately U$6.8 million in new construction per day.
5. Sales volume and Sales price for Single Family homes have increased in 2015
6. Population growth has been more than that is the US and Florida
7. Growth in Tourism remains strong
Yesterday, I came across this article (http://www.tricities.com/news/local/article_f29c44c2-aafb-11e4-bc5d-872c21f4121a.html?mode=jqm), which highlights how the Zillow's Zestimates can be "off the mark".
Having invested in the USA market for some time now, I agree with this article and would like to remind new investors that in order to find the "true" value for their property, input from an experienced realtor or an investor is vital.
Zillow provides a very important service to all the investors and I do agree with its CEO, Mr. Spencer Rascoff, that Zillow Zestimates do provide a very good starting point. However, critical input from an experienced realtor / investor can help you avoid some costly mistakes.
There are several reasons I feel real estate is an amazing investment opportunity:
1. Leverage: Real estate debt, or leverage, can be structured far more safely than using debt to buy stocks by trading on margin.
2. Tax free cash flow: Because of depreciation and mortgage interest deductions (if you leverage your capital), your cash flow can be tax-free. You may not have to pay any taxes on the property until you actually sell it, at which time you will pay capital gains tax.
3. Finite: The need for residential, commercial or industrial real estate grows with our expanding population. People will always need homes, office space etc. Economics 101 teaches us that price of any product/commodity is based on its supply and demand. Supply=Demand. The beauty of real estate is that the supply is typically somewhat limited while its demand continues to rise. This characteristic makes real estate, at the very least, a good inflation hedge, if not a great tool to accumulate wealth.
4. Tangible: You can visit your investment property, you can speak with your tenants, and the banks consider it equity. Because of its tangibility, you have a certain degree of physical control over your investment—if something is wrong with it, you can fix it. You can’t do that with a stock or bond.
5. Durability: Unlike a bond, which has a fixed maturity date, real estate does not normally mature i.e. a building can last for decades or even centuries, and the land underneath it is practically indestructible. In many parts of the world, it is not uncommon for investors to hold property for over 100 years. This durability allows you to sell your property whenever you want. As such, real estate can be a great source of passive income—you can purchase and hold the property as long as it continues to make good investment sense.