Orlando Condo Investor UpdatePublished: 22 March 2014 - Author: Marcus Burke
With spring in Orlando already well underway, were seeing uptick in the number of enquiries we are receiving from our clients who are thinkng about either exiting the marketplace, or acquiring new properties. As those of you who purchased through our real estate division know, at Condo Metropolis, apart from managing our investors condos and town-homes, we also help with the acquisition of new assets, as well as the disposal (sale) of those that have done their job. So if you have any questions relating to the eventual sale your investment, feel free to call or email us at any time.
The Orlando condo market reached rock bottom a couple of years ago now and prices have been steadily increasing ever since, at the rate of about $10K per year on average. Perhaps more around downtown Orlando. Whether or not the time is right for you to sell, will depend largely on what you paid for the unit in the first place of course, as well as your personal circumstances.
For those of you who were lucky enough to purchase from banks in around 2008-9 you may have already seen a doubling in price. In other cases, you may need to hold for a couple more years to see the investment make the return you had hoped for as prices continue to rise. Certainly there is every sign that the market will continue to slowly improve and as lending comes back, prices are likely to rise further. In about 80% of cases, my advice would be to “hold” pending further price rises so that you can see real capital gains but also cover the fees and taxes associated with selling.
Costs to consider when selling, title company fees, perhaps about a thousand dollars and your commissions, usually around 6% (paid by the seller). In cases where owners have 4 or more condos, we are usually able to drop this to 5.5% or even 5%, which will help cover the title fees. There are also taxes to consider and potential IRS witholding amounts for overseas investors. These are more complex issues that need to be discussed with your tax professional.
Rental prices in and around MetroWest have continued to climb but rather slowly. The number of competing investor properties usually ensures that rents don’t get ahead of themselves. In most cases, if you have a good tenant, then it’s better to keep them than to lose them in the hopes of a higher rent. In short, I usually tell owners that their monthly “cashflow” from the actual rent is likely to be minimal. The goal here should be to cover annual taxes, monthly COA dues and repairs. The real return on investment comes when your asset is finally sold. When you think that day is close, just give us a tinkle and we’ll conduct a review for you to see where you stand!