[REN #896] Real Estate Investing: Rebound Markets – TAMPA!

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Real Estate Investing: Rebound Markets - TAMPA!, Real Estate News for Investors Podcast Episode #896

The Tampa housing market could be among the first to come roaring back to life after the economy opens back up, according to John Burns Real Estate Consulting. Dallas was named  as a potential post-pandemic boom market as well, along with a few other areas.

John Burns Real Estate Consulting is well-respected for doing in-depth research on the real estate industry, and specifically for national builders. This latest report looks at geographic opportunities for real estate investors within three categories. At the top of the list were potential “boom markets,” which are areas that are considered to have less exposure to the coronavirus, and therefore would have a quicker rebound. Tampa, Austin, Salt Lake City and Phoenix were all listed in this category. (1)

There was also a list of potential “new boomtowns” which means it would be a slightly longer, but also very profitable road to recovery. On that list was Portland, Seattle, Denver, Dallas, Nashville and Charlotte.

The last category was for markets that were likely hit hard by the crisis and may provide buying opportunities for investors. Las Vegas, Miami and Orlando were on that list due to the tourist industry shut down.

However, it’s important to note that Orlando has much more going for it than its theme parks. More about that later.

Tampa as a Post COVID-19 Boom Market

Tampa has been on RealWealth’s list of growing markets for several years, and we agree with John Burns conclusion that Tampa could quickly recover. There will be parts of Tampa that are more affected than others, which is why RealWealth focuses on neighborhoods in the Northwest of Tampa and in and around St Petersburg. Our preferred property management team there says, the pandemic has not slowed demand among buyers or renters.

In recent weeks, they say homes have been selling for an average of $140,000 with just 15 days on the market, at 98% of asking price. That represents a slightly higher average price and a faster closing than three months ago. The price discount is about the same, so prices are stable.

Inventory was tight going into the pandemic, and that hasn’t changed. Tampa is currently at about one-and-a-half months, which is very low. Six months is typical for a market that’s well-balanced between buyers and sellers.

As for renters, they’ve had very few problems with April and May rent collection, because most of their tenants are still employed and don’t want to move. Many of them have jobs in essential businesses. Others have retired with fixed incomes, so they can pay rent. There’s also a large military base nearby, a strong health care sector, and the University of South Florida. Rent collection came in at 93% for April, which is actually higher than the 12-month average.

This Tampa property management team expects a bit of a boom coming out of the lockdown because their properties are in a low density area with affordable homes. They are currently seeing more demand for Single Family Rentals, especially among those who live in small apartments. There may also be an increase in the number of people recovering financially who are no longer able to buy a home and will need to continue to rent. You can get more information about this property management team on our website. They also sell new and renovated homes for people looking for buy & hold real estate investments.

Dallas Ranks as a Potential Boom Town

Dallas is another metro that is expected to do well. The Burns research group listed Dallas as one of six “new boomtowns.” It’s also on RealWealth’s list of great markets for single-family rentals because there’s a lot going on in Dallas. It’s a growing tech hub that’s attracting young tech talent and a lot of development. Burns says, it might take a little longer to recover because the pandemic threw a monkey wrench into all the development, but that long-term investors will be rewarded.

RealWealth’s preferred Dallas property management team says, the area was already getting about a thousand new residents a day from places like California and New York, and they wouldn’t be surprised if that number went up after the economy opens up. They boast about the wide open spaces and a lack of density that many people might crave in a post-pandemic world.

The Dallas property management team targets suburbs where there are affordable single-family homes. By moving away from the heart of the city, they are able to provide rental homes at a low price point to investors and more affordable rent levels for tenants. They say these homes often attract tenants that don’t want to pay 1,500 to $2,000 for a luxury apartment. With the SFR, they get a yard and a lower monthly payment of maybe 1,100 to $1,200.

Dallas is a strong housing market because it has jobs — lots of them. It’s a distribution hub for many big retailers like Walmart, Sam’s Club, and Amazon. There’s rail transport, an international airport, and several Fortune 500 companies. Companies like Amazon, Walmart, Domino’s Pizza, Pepsico, and Kroger are all hiring in the midst of the pandemic. Our team says, some tenants have lost jobs but that most have found new ones.

As for April rent collection, 85% have paid in full and on time. Ten percent are on payment plans. Another 5% face a possible eviction. They say they’ve seen an increase in applications with many of those people coming from apartments. May rent collections have been equally as strong thus far.

There’s More to Orlando than Disney World!

As for Orlando, there’s much more to Orlando than Micky and Minnie… especially when you move to areas outside the city limits. Real Wealth’s preferred property management team offers new single-family rentals in three different areas South of Orlando. One is near Palm Bay along the coast and serves the growing space industry. Another is just South of Orlando near Kissimmee which is attracting a lot of tech companies. The third area is a place called The Villages Southwest of Orlando. It’s one of the fastest growing communities in the nation with a 50% increase in population from 2010 to 2018. There are thousands of high-paying jobs available in these areas right now. Central Florida is also known for medical research and medical equipment manufacturing.

This Orlando real estate company provides build-to-rent single-family homes so they are brand new, and germ-free. That will attract higher quality tenants. They say, the areas where they are building have not been hit hard by the virus, and that demand is strong for these brand-new single-family rentals.

You can learn more about these markets (and others) on our website. You can also listen to recent property team webinars and get the contact information on these property managers and realtors by joining RealWealth (it’s free).

Links:

(1) Geographic Opportunities: John Burns Real Estate Consulting

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