Stephanie Peck
Looking for an investment in residential real estate? Opinions vary as to whether or not this is a good time for a non-owner-occupied buyer to purchase a house or duplex to rent or flip. Mortgage rates are at a 20-year high, and inventory is low in Tidewater.
Linda Fox-Jarvis, marketing director and listing specialist at The Linda Fox-Jarvis Team, says yes, the market is still good. In fact, Fox-Jarvis says she is seeing a lot of investors, both for flipping homes and for buying properties as a longer-term investment to rent out. “The rental market is very strong, as is the sales market,” she says.
“High rates impact investors, except for cash buyers,” says Nancy Evans, a realtor with Howard Hanna. “There are not a lot of investment properties out there, although there are a lot of buyers.” She says that, while the bidding wars have decreased from recent years, it’s still a competitive market. “A buyer with cash tends to win.”
The website, walletinvestor.com, however, has some good news for an investor in Virginia Beach. For buyers looking for a five-year investment, the site suggests that the profit is expected to be around +2.64% by 2028.
In Norfolk, however, the market has slowed, according to Shirley Stein, a realtor and relocation agent with Howard Hanna. Where a few years ago, people were overbidding by $50,000; today, she says, buyers are only willing to overpay if they plan to live in the home for 10 to 20 years.
Stein says that the numbers must work for an investor. As an example, she cites a distressed house she found for a contractor – he purchased low, spent a large sum renovating, and then sold the property immediately for a good profit.
In Florida, the trend is similar. Steve Jason of All Access Realty specializes in the counties of Southern Palm Beach and Northern Broward. He also sees a slow market, though listings are up 20% over last year. Prices remain firm, he says, even with investors bargain hunting.
“Sellers are not interested in moving for a lower price,” Jason notes, as investors try to negotiate. Whereas there were once five buyers for every property, now there is only one.
Susie Edmunds, a realtor with Howard Hanna who specializes in neighborhoods from the Bay Bridge Tunnel to the North End/Oceanfront and inland through the Great Neck corridor, says that rental prices have increased, so investors are buying regardless of the higher interest rates. “The population is increasing in general. Inventory is low for buyers looking for a home to live in, so people are sticking to renting.”
Whether you invest in a property to rent or to flip, the potential for success exits. Just be certain to know the laws, have a strategy, and work with a professional.
Linda Fox-Jarvis
Shirley SteinSteve Jason