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Why Invest in Florida?
There are many amazing investment and lifestyle opportunities in the State of Florida, the 4th most populous US state. The people are very proud of their state and it's easy to see why. No other location in the western hemisphere can match Florida’s unique combination of a strategic geographic position, strong knowledge base, state-of-the-art infrastructure, entrepreneurial spirit, and concentration of corporate and financial resources. Total holdings by non-US companies were valued in 2007 at $34.3bn.
However, like everywhere else, the property market in Florida is local and should be looked at on a micro level rather than solely taking investment decisions based on macro, state wide information.
Torcana work in the distressed market (very active, lots of willing buyers and sellers), which is quite distinct from the regular market (very stagnant, sellers either can't or don't want to compete with their more desperate counterparts). Within this distressed market we do business with distressed sellers and developers who have relatively small amounts of unsold properties within very well run and well built resorts. These properties can be purchased for less than their construction cost. It is a very active and aggressive market and this type of distressed inventory is down nearly 50% year on year.
How do Torcana know what is a good investment?
Picture the town / city / village where you currently live and imagine there are many distressed sellers. Would your first reaction be to hunt down the very cheapest property available just because it is cheap and tenanted? I’d imagine the answer for most of you is no, and that many would prefer to pay a little extra to get a discounted property in a nicer part of town, where the tenants are solid and a resale market can be clearly visualized. This is how we feel about Florida.
A new build 900 sq ft 1 bedroom sea view condo in Miami cannot be measured against a 15 year old timber frame 550 sq ft 1 bedroom/studio in Ft Myers. It seems obvious when phrased like that, but it isn’t stopping both amateur and professional investors of thinking otherwise. Whether property prices are increasing, stagnant or falling – you still tend to get what you pay for.
Not everybody takes this approach. Over the last few months UK and Irish agents have been engaged in what can only be described as a “race to the bottom”. There is real pressure in this business to source the very cheapest distressed deals possible with scant regard to the ABC’s of smart investing.
It’s a pretty risky strategy for an agent to engage in, and it is not one that would be of interest to Torcana. No doubt the commission will come rolling in for a few months, but these agents will quickly reach a point where they either have to ignore large numbers of client complaints or they will have to dedicate ruinous amounts of company resources to solving messy aftersales issues.
It is our view that investors should not be satisfied with an agent who just sources property. A good agent is an essential service for a non professional as they help him/her (a) find the smartest long term investments available, (b) ensure the pitfalls of buying in a distressed market are avoided and (c) assist with a smooth transfer of ownership.
Florida Statistics
- Orlando is ranked #1 for predicted job growth in the country between 2007-12
- Contains the nations largest Medical Research community
- Booming convention centre, ranked #2 in the US behind Las Vegas
- Orlandos technology industry is ranked 4th in the country, employs over 70,000 people, and includes the regional headquarters of Lockheed Martin and Harris
- Tourism – close to 50m visitors, which is increasing year on year. It is the world’s number one tourist destination and home to 6 of the 7 largest theme parks in the USA
- Over 350,000 people NET move to Florida every year, making it the fastest growing US State
- Land mass slightly less than Great Britain, with only 17m inhabitants
- There is no state tax which has positioned Florida as a shelter state for wealth for both individuals and corporations
- Florida is the hub for inward investment from Latin America - which has resulted in the State now being the one of the wealthiest in the USA and a hub for banking, finance and import / exports
- Florida has growth in venture capital with investments reaching $608 million -- up 91 percent from $319 million in 2006 -- placing it ninth nationwide
- Tourism is worth an annual estimated $57 billion to the Florida economy
- Florida ranks fourth in the country for high-tech industry employment and is the eighth fastest-growing state in terms of the technology industry
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