I live in Midwest and visiting Orlando in few days. I am thinking of investing some money in land there. Particularly, I am interested in buying a vacant lot in a subdivision already being developed. I do not think I will be building home on that, if that, at least for another 15 years when I will move there to retire. I am aware of the biggest downside of buying land in general: negative cash flow, however, I am hoping to make up for that in appreciation of land value. I have about half day available to look around the place, hopefully with a real estate agent. I do not want to buy a home or build a house right now. My questions:
1. Is this a nutty idea, any other downside I have not considered? 2. How do I get hold of an agent now so that he/she can show me what is available? 3. Anything else that I should be considering?
This has got to be the worst idea of 2010 posted in this forum
Vacant lots in half built developments in FL are the worst possible investment available...if they had any merit, dont you think all the experienced gurus would be snapping them up and not being sold to naive rubes?
MrKlick said: Yep, this is a nutty idea for a variety of reasons. Among them:
First is that FL real estate prices are in free fall and not likely to stop soon.
Second, why buy a lot instead of house?
Thanks! About your first point, trying to guess when a real state market has reached bottom, how is that different from trying to guess when a stock market has reached absolute minimum, something that wise people advise against and anyway seems more of a matter of luck than anything else?
I do not want to buy a house right now because already have one where I live, and the size of the financial commitment required for buying a second one, headaches involved in renting it out even if I hire a third party to manage the whole process etc.
SUCKISSTAPLES said: This has got to be the worst idea of 2010 posted in this forum
Vacant lots in half built developments in FL are the worst possible investment available...if they had any merit, dont you think all the experienced gurus would be snapping them up and not being sold to naive rubes?
Thanks, Suckisstaples for your loud and clear response One question about your logic, though - to draw an anology, there may not be good buys left in houses as well in Orlando, since the so called exeprts would have snapped them up by now. Granted, a naive rube like myself has less knowledge about the market compared to them, but I am not buying right away while visiting there, just doing my homework by various means. Weren't many of these experts themselves among those who brought in the calamity upon the entire market?
Not trying to arm wrestle with you, but engaging in a reasonable discussion with you and others here to benefit from the wisdom of the crowd.
There are industry pros, seasoned RE investors, and people like yourself....which group is going to get the good deals ?
Considering your experience level - of not knowing how to get a hold of a FL agent, and having just 1/2 a day to dedicate to this purchase when you are in FL, it is highly unlikely you will get the good stuff.
For historical reference , before the 2000s RE runup which made a monkey look like a RE tycoon, selling "FL land" to newbie investors was the butt of jokes for about the past 50 years. Kind of like selling the Brooklyn Bridge. We are back to those times.
Are there deals in FL? Definitely. Most are Properties in prime areas , not partially abandoned subdivisions likely to turn into Section 8 ghetto government subsidized project neighborhoods because the current owners have to find guaranteed paying tenants to rent to.
InTrouble
Member
posted: Mar. 11, 2010 @ 7:29a
I live in Orlando. Do not do this.
FragOut
Member
posted: Mar. 11, 2010 @ 7:55a
InTrouble said: I live in Orlando. Do not do this.
But if you insist...look around Lake Nona where there is a new medical school, 2 new hospitals coming and a large influx of research facilities...that area should be pretty amazing 15 years from now...just cow pastures mostly now.
Not a terrible idea as others have suggested. On this same forums, people are screaming about imminent hyperinflation, and then buyers of land will be looked as genius. These so called Real Estate Professionals are not really pros. If there is money available, construction will occur, real estate will transfer hands and everyone and their brother will be doing transactions. Once money dries up, like now, even decent properties cannot be purchased.
HumDoHamaraDo said: On this same forums, people are screaming about imminent hyperinflation, and then buyers of land will be looked as genius. People scream about a lot of things on this forum that are full of crap.
wilesmt
Senior Member
posted: Mar. 11, 2010 @ 8:45a
Some HOA's I know of have requirements that lots be developed within a certain time of being purchases. They don't want empty lots sitting around, so make sure you check that out.
Cerdo
Senior Member
posted: Mar. 11, 2010 @ 8:46a
Another word of warning - (Disclaimer: I live near Orlando). A whole lot of 2000-2005 Orlando building was on the false premise that European vacationers would pick up the houses in mass to use for their yearly trip to Disney world. Orlando has minimal industry outside of tourism and isn't expected to grow a whole lot in the near future. If you're looking for a real deal, buy a lot over near the airport where they are selling for pennies on the dollar, notwithstanding the buried unstable army munitions on the site.
Even if this were the perfect time to buy… and if you were to somehow stumble into an unusually great deal, you’ve got to consider that things might change over the next 15 years… and Orlando may no longer a good place for your retirement home.
Why put all of your eggs in one basket? IMO, invest your money somewhere else… somewhere more liquid and/or portable.
FragOut
Member
posted: Mar. 11, 2010 @ 9:49a
Cerdo said: Another word of warning - (Disclaimer: I live near Orlando). A whole lot of 2000-2005 Orlando building was on the false premise that European vacationers would pick up the houses in mass to use for their yearly trip to Disney world. Orlando has minimal industry outside of tourism and isn't expected to grow a whole lot in the near future. If you're looking for a real deal, buy a lot over near the airport where they are selling for pennies on the dollar, notwithstanding the buried unstable army munitions on the site.
Eh, they are only finding bombs under houses and elementary schools every other month now instead of every day. BUY BUY BUY!!!
InTrouble said: I live in Orlando. Do not do this.
Let me try to guess what you meant. Please feel free to interject:
It has high crime, high taxes, poor schools, houses and rentals are still high, economy is not diversified, traffic is bad, gangs are everywhere, summers are muggy - did I miss anything?
InTrouble
Member
posted: Mar. 11, 2010 @ 10:16a
nachiketajoshi said: InTrouble said: I live in Orlando. Do not do this.
Let me try to guess what you meant. Please feel free to interject:
It has high crime, high taxes, poor schools, houses and rentals are still high, economy is not diversified, traffic is bad, gangs are everywhere, summers are muggy - did I miss anything?
I actually love it here and the typical complaints about the area that you outlined above are greatly overstated. However, I do not think your plan is a good one.
Unemployment is 12%+. Many parts of town are susceptible to decay. I belive half-built subdivisions where the vacant lots can be had at "great prices" are the most susceptible. The parts of town that are desireable have few vacant lots, and the prices will be multiples of those in the aforementioned half-built subdivisions. You could very easily buy a lot that you do not want to live on 15 years from now, and then you will have paid the carrying costs and potentially suffered erosion of principal.
Invest your money elsewhere, when the time comes to move, rent for at least a year, then make up your mind.
nachiketajoshi said: I am aware of the biggest downside of buying land in general: negative cash flow, however, I am hoping to make up for that in appreciation of land value. That's only a good strategy if the appreciation in land value exceeds what you'd make by investing the money elsewhere. If the property appreciates by 3% a year (a big if, but that's fairly normal historically), could you have made a greater return with your money in another investment? Even in the current low interest rate environment, you could still get 4% in a rewards checking account.
Your point well taken - this investment is not much liquid or portable. However, I am not putting all eggs in one basket, as I have a decent 401K that is reasonably diversified and some investment in overseas properties.
saab9kt said: Even if this were the perfect time to buy… and if you were to somehow stumble into an unusually great deal, you’ve got to consider that things might change over the next 15 years… and Orlando may no longer a good place for your retirement home.
Why put all of your eggs in one basket? IMO, invest your money somewhere else… somewhere more liquid and/or portable.
Good point. I have following areas in the consideration set, care to comment?
Lake Mann, Sunset Lake, Clear Lake, Avalon Park, Baldwin Park, Winter Park, Lake Nona, Lake Eola, Winderemere (also near airport in case my lot hits a motherload and there is a good market for bombs in future!)
I actually love it here and the typical complaints about the area that you outlined above are greatly overstated. However, I do not think your plan is a good one.
Unemployment is 12%+. Many parts of town are susceptible to decay. I belive half-built subdivisions where the vacant lots can be had at "great prices" are the most susceptible. The parts of town that are desireable have few vacant lots, and the prices will be multiples of those in the aforementioned half-built subdivisions. You could very easily buy a lot that you do not want to live on 15 years from now, and then you will have paid the carrying costs and potentially suffered erosion of principal.
Invest your money elsewhere, when the time comes to move, rent for at least a year, then make up your mind.
InTrouble
Member
posted: Mar. 11, 2010 @ 11:11a
nachiketajoshi said: Good point. I have following areas in the consideration set, care to comment?
Lake Mann, Sunset Lake, Clear Lake, Avalon Park, Baldwin Park, Winter Park, Lake Nona, Lake Eola, Winderemere (also near airport in case my lot hits a motherload and there is a good market for bombs in future!)
I personally would consider buying in some of those areas and not in others. BUT the housing and layout of those areas differ greatly, and they offer different lifestyles, to the point where you may like living in one and not another. Additionally, places change and things will be different in 15 years. You will change as well. This is more important than timing the bottom of the market.
The City of Orlando and Orange County are not in good financial shape. Non-homesteaded properties could face dramatic tax increases. Invest your money elsewhere, when it's time to move, rent for at least a year then decide.
In short, I live in Orlando, do not do this. I have nothing more to add, good luck.
indianguy30
Member
posted: Mar. 11, 2010 @ 12:00p
My question to you is why orlando? I lived in orlando for a few years and there is no lack of land to build on in central FL. So why do you think land is going to appreciate enough for you not to lose money? Unless there is another huge real estate boom in central FL, I dont think you will break even.
Are you sure you want to live in Orlando after you retire? Orlando is primarily a tourist town visited by young(er) people. Theme parks and rollercoasters get boring after a while and other than the winter months, the humidity sucks.
indianguy30 said: My question to you is why orlando? I lived in orlando for a few years and there is no lack of land to build on in central FL. So why do you think land is going to appreciate enough for you not to lose money? Unless there is another huge real estate boom in central FL, I dont think you will break even.
Are you sure you want to live in Orlando after you retire? Orlando is primarily a tourist town visited by young(er) people. Theme parks and rollercoasters get boring after a while and other than the winter months, the humidity sucks.
Orlando because I cannot see myself living in a small town (though as InTrouble mentioned, things may change in 15 years). Plus, want to avoid the hassel of hurricane evacuation and probably out-of-my-range prices of properties in beach towns. Though, I want to squeeze in a visit to Vero Beach if I can.
Got it - it is more about the mental make up than Orlando Thanks!
InTrouble said: nachiketajoshi said: Good point. I have following areas in the consideration set, care to comment?
Lake Mann, Sunset Lake, Clear Lake, Avalon Park, Baldwin Park, Winter Park, Lake Nona, Lake Eola, Winderemere (also near airport in case my lot hits a motherload and there is a good market for bombs in future!)
I personally would consider buying in some of those areas and not in others. BUT the housing and layout of those areas differ greatly, and they offer different lifestyles, to the point where you may like living in one and not another. Additionally, places change and things will be different in 15 years. You will change as well. This is more important than timing the bottom of the market.
The City of Orlando and Orange County are not in good financial shape. Non-homesteaded properties could face dramatic tax increases. Invest your money elsewhere, when it's time to move, rent for at least a year then decide.
In short, I live in Orlando, do not do this. I have nothing more to add, good luck.
nachiketajoshi said: Good point. I have following areas in the consideration set, care to comment?
Lake Mann, Sunset Lake, Clear Lake, Avalon Park, Baldwin Park, Winter Park, Lake Nona, Lake Eola, Winderemere (also near airport in case my lot hits a motherload and there is a good market for bombs in future!) Not sure what year is on the map you're using, but several of those areas mentioned will have few (or no) empty lots. Lake Eola is a downtown older neighborhood (along with Thornton Park, Delaney Park, etc.), there are virturally no emptly lots downtown. Although if you found a cheap house in decent shape that you could rent, the downtown neighborhoods are still relatively well priced. Still a lot of folks buying older home and doing large-scale remodels. It has seen home prices drop (like everywhere else), but still has a fairly high per square foot price compared to the cookie-cutter houses in burbs.
Same with Winter Park (which is a separate city), the older parts of WP are still stupid money in many areas, as it is a very snooty place. Lots of people walking their overpriced dogs, wearing sweaters around their waist, and discussing the latest wines.
nachiketajoshi said: indianguy30 said: My question to you is why orlando? I lived in orlando for a few years and there is no lack of land to build on in central FL. So why do you think land is going to appreciate enough for you not to lose money? Unless there is another huge real estate boom in central FL, I dont think you will break even.
Are you sure you want to live in Orlando after you retire? Orlando is primarily a tourist town visited by young(er) people. Theme parks and rollercoasters get boring after a while and other than the winter months, the humidity sucks.
Orlando because I cannot see myself living in a small town (though as InTrouble mentioned, things may change in 15 years). Plus, want to avoid the hassel of hurricane evacuation and probably out-of-my-range prices of properties in beach towns. Though, I want to squeeze in a visit to Vero Beach if I can.
you shoulda gone while the dodgers still trained there
Why buy vacant land when you can buy vacant downtown luxury skyscrapers instead. Unfortunately I don't think the vultures that have moved in will acknowledge your property rights or eviction notices.
jaimelobo said: nachiketajoshi said: Good point. I have following areas in the consideration set, care to comment?
Lake Mann, Sunset Lake, Clear Lake, Avalon Park, Baldwin Park, Winter Park, Lake Nona, Lake Eola, Winderemere (also near airport in case my lot hits a motherload and there is a good market for bombs in future!) Not sure what year is on the map you're using, but several of those areas mentioned will have few (or no) empty lots. Lake Eola is a downtown older neighborhood (along with Thornton Park, Delaney Park, etc.), there are virturally no emptly lots downtown. Although if you found a cheap house in decent shape that you could rent, the downtown neighborhoods are still relatively well priced. Still a lot of folks buying older home and doing large-scale remodels. It has seen home prices drop (like everywhere else), but still has a fairly high per square foot price compared to the cookie-cutter houses in burbs.
Same with Winter Park (which is a separate city), the older parts of WP are still stupid money in many areas, as it is a very snooty place. Lots of people walking their overpriced dogs, wearing sweaters around their waist, and discussing the latest wines.
I wouldn't touch anything outside of downtown orlando / winter park. Those are the only places that will appreciate as orlando hits the tubes.
Suprisingly, there are a signifigant minority amount of empty lots in areas, as well as some new contruction in these areas. These new "communities" in far flung parts of the area are just terrible.
If you're looking for less hustle and bustle (for what little orlando has), look to the towns in the northwest. They are older, establied towns that have a mix of far flung orlando commuter and small town "locals." Places like groveland, eustis. Mt Dora is pretty. The bulk of commuters have shied away from this area due to a lack of highways. Northeast is all overdeveoped along the I4 corridor. Its saving grace will be sunrail, and if you want to gamble on capital appreciation, buy something within 1/2 mile of the planned stations and hope for the best.
I will say there's an area of winter park, right near downtown winter park that you could snatch up some killer deals and wait for the area to gentrify. Open lots, cracker style houses, usually uner 1k sqft and the ubitiquous postwar cinder block blight.
Baldwin park is all spiffy, shiny and new. I'd be looking for bargains right outside baldin park in the postwar cinder block navy surrounding the naval training base turned urban community.
South orlando is all crap. I wouldn't buy there. Its tainted with the stain of too much tourism and overpupulation of vacation homes. East orlando is waiting to really hit the dumps. Lake nona might pan out with the UCF medical center. Right now its like any other far flung development.
Thanks, Scrouds and Jaimelobo - appreciate your constructive comments and suggestions!
scrouds said: jaimelobo said: nachiketajoshi said: Good point. I have following areas in the consideration set, care to comment?
Lake Mann, Sunset Lake, Clear Lake, Avalon Park, Baldwin Park, Winter Park, Lake Nona, Lake Eola, Winderemere (also near airport in case my lot hits a motherload and there is a good market for bombs in future!) Not sure what year is on the map you're using, but several of those areas mentioned will have few (or no) empty lots. Lake Eola is a downtown older neighborhood (along with Thornton Park, Delaney Park, etc.), there are virturally no emptly lots downtown. Although if you found a cheap house in decent shape that you could rent, the downtown neighborhoods are still relatively well priced. Still a lot of folks buying older home and doing large-scale remodels. It has seen home prices drop (like everywhere else), but still has a fairly high per square foot price compared to the cookie-cutter houses in burbs.
Same with Winter Park (which is a separate city), the older parts of WP are still stupid money in many areas, as it is a very snooty place. Lots of people walking their overpriced dogs, wearing sweaters around their waist, and discussing the latest wines.
I wouldn't touch anything outside of downtown orlando / winter park. Those are the only places that will appreciate as orlando hits the tubes.
Suprisingly, there are a signifigant minority amount of empty lots in areas, as well as some new contruction in these areas. These new "communities" in far flung parts of the area are just terrible.
If you're looking for less hustle and bustle (for what little orlando has), look to the towns in the northwest. They are older, establied towns that have a mix of far flung orlando commuter and small town "locals." Places like groveland, eustis. Mt Dora is pretty. The bulk of commuters have shied away from this area due to a lack of highways. Northeast is all overdeveoped along the I4 corridor. Its saving grace will be sunrail, and if you want to gamble on capital appreciation, buy something within 1/2 mile of the planned stations and hope for the best.
I will say there's an area of winter park, right near downtown winter park that you could snatch up some killer deals and wait for the area to gentrify. Open lots, cracker style houses, usually uner 1k sqft and the ubitiquous postwar cinder block blight.
Baldwin park is all spiffy, shiny and new. I'd be looking for bargains right outside baldin park in the postwar cinder block navy surrounding the naval training base turned urban community.
South orlando is all crap. I wouldn't buy there. Its tainted with the stain of too much tourism and overpupulation of vacation homes. East orlando is waiting to really hit the dumps. Lake nona might pan out with the UCF medical center. Right now its like any other far flung development.
If you insist, but a house in Winter Park or near Lake Eola and rent it out, that way you have the option next decade to knock it down and build new. They are 'old Orlando' and will presumably always be in demand, as well as constantly seeing knock-downs.
As others have said, it is just a cash poor investment decision. Even if you eke out 6% with the money over the next decade, you will still be able to buy the lot then . . . perhaps even come out ahead. Take a look at the taxes on the lot and the maintenance, potential investment return, a guess on appreciation, rental income, loan costs if not paying in cash, etc.
PMonkeyDishwasher said: Admit it, it was the Family Auto-Mart commercials that sold you on Orlando.
LOL!
As someone who lived in Orlando for six years and grew up a county East of Orange County, I wouldn't move back there for much of anything.
Funny story - my wife and I rented a new townhouse in Vista Lakes which is in the SE corner of Orlando by the airport. Okay townhouses (cookie-cutters), but the neighborhood was trashed fast and it wasn't a place to raise a family. And then....the bombs started to happen.
Orange County and the Army Corp of Engineers approved the land for Vista Lakes many years ago after it was demilitarized from the prior Air Force base. As it turns out, this wasn't the case - there were bombs, tanks (yes, I said there was a tank buried right by the middle school), and phosphorous shells throughout the emerging community. Even though the bombs did not use electronic fuses, several people were hurt by the phosphorous shells.
Needless to say, prices weren't so hot after this. Owners actually had trouble renewing homeowners insurance while Orange County/Army Corp of Engineers banned any digging or construction projects for several months. Funny thing was, after we moved away, my folks were watching the local news and the Army Corp of Engineers found the HIGHEST concentration of bombs and incendiary material right by our townhouse.
Why do you want to buy the land now? I guess the primary concern is land price increase. But you already own real estate in mid-west. Although they not no exactly the same location, maybe when the orlando market recovers your current house will do well too.
nachiketajoshi said: "Bad" is subjective, though i admit that I have not experienced life in there.
Let me rephrase this question then - (1) what place would you (all those who read this) prefer to retire, realistically? (2) Would this be good time to invest in real estate (home or land) in some of those localities?
patch96 said: OP
You have no idea how bad things are in FL.
Finally you asked the right question: Hawaii, weather is nice all year long. Buy land there, it HAS to go up as the island is only a certain size. Like buying in Manhatten or Frisco Bay, buy where there are physical limits to the future development.
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