Toronto and Vancouver are yielding investors diminished returns on their investments, but there is a solution south of the border.
Orlando, Florida, in particular, is replete with affordable properties that are appreciating astronomically.
“Forbes named Orlando the number one real estate metro area for investment in the U.S. and they projected prices in Orlando will increase by 35% in the next three years,” said Garry Walmsley, senior global real estate advisor at The Orlando Agency. “Right now is a fantastic time for investors to get into the market and tap into properties. People are looking to rent on a long-term basis; they can achieve the cash flow and tap into the appreciative aspect as well. Serious investors understand that if they can get something between 5% and 8% on a cash flow basis and double that on an appreciative basis, that’s a pretty solid investment.”
As of April 2018, the average home in Orlando cost $286,000—90% of the market’s peak pricing in May 2007, and far more stable.
A major reason for that stability is Orlando’s booming economy, which doesn’t appear to be running out of steam any time soon.
“Orlando has been the number one-rated job growth market in the U.S. for the last three years,” said Walmsley. “Whenever you have a market that has that type of statistical growth behind it, it’s doing something right. It’s down to economic and infrastructure growth, and we understand that the amount of investment that goes into a city rewards itself down the line. Orlando is known as the number one vacation city in the world, but there’s more than Mickey Mouse. Whenever you have a job-growth market leading a nation as large as the United States three years in a row, and there’s growth in infrastructure, that’s fantastic for the city’s real estate market.”
The job growth is being largely driven by the tech and medical sectors. According to Alain Forget, RBC’s head of sales and business development, there’s steady influx of new residents to the city, however, the majority are not looking to buy their own homes right away.
Moreover, Orlando’s bylaws allow free market principles to fledge freely in the real estate industry.
“Orlando is appealing because of its affordability and the zoning favours short-term rental, so landlords can rent daily, weekly or monthly,” said Forget. “Appreciation is there, too. People are always visiting Orlando for seven to 10 days to visit theme parks, so there’s an opportunity. But even the technology and medical sectors are bringing a lot of permanent residents to Orlando. They might not be able to afford a home right away, but they may need to rent.”
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Neil Sharma is the Editor-In-Chief of Canadian Real Estate Wealth and Real Estate Professional. As a journalist, he has covered Canada’s housing market for the Toronto Star, Toronto Sun, National Post, and other publications, specializing in everything from market trends to mortgage and investment advice. He can be reached at neil@crewmedia.ca.
