MAKING MONEY How to get good ROI

Investors are investors. They want a return on their investment. That means, typically, a property that is producing enough rental income to pay the mortgage and expenses plus an interest rate that is higher than what they might get at the bank.
And if they can’t find a fully-leased property at a price they can justify, they look for bargains
“Investors are looking for deeply-discounted buysbank-owned properties and short sales,” said Alex Aydelotte, partner in Florida Commercial Enterprises, LLC in Stuart, a firm that specializes in investment properties.
Who are the investors? Aydelotte said they often have cash buyers who can take a distressed property, usually financially-distressed, and turn it around. Contractors are also looking for more business and it costs less to build for a new tenant than it did just a few years ago.
Sometimes, the investors are just looking for a place to do business.
“We’re seeing an increase in owner-occupants,” Aydelotte said. “Say, an attorney who wants to buy a building rather than renting.” And the new owner-occupant can take advantage of low property prices.
“It’s more difficult to get financing. But there is money for occupants who want to buy the building,” he said. “It’s a safer investment for the banks.”
Even if they don’t get bank financing, there are some properties with owner financing, he said.
Multi-family is attracting attention: “The hottest market right now is multi-family,” said Carl Sciara, CCIM, broker/associate with Dale Sorensen Real Estate and a certified commercial and investment property expert.
“It (multifamily) seems to be the most stable income stream and vacancies are low, maybe around 10 percent,” Sciara said. Investors are looking at triplexes and duplexes but apartments buildings are generating the most buyer interest.
Vacancies are low because rents are low; landlords aren’t looking for a top returns, or capitalization “cap” rates. But rents are starting to rise, he said. And that could make it cheaper to buy a home than to rent, raising vacancy rates, Sciara said. That will make other commercial investment properties look more attractive.
“There are always buyers for investment properties but the criteria to evaluate a property changes with the economy,” Aydelotte said. “We’re seeing some stabilization in the market and we hope to see more balance, as many buyers as sellers.”
“Investors don’t need a triple-net lease to invest,” he said. But there is always higher demand for fully-leased and financially-productive properties. “Good net operating income,” Aydelotte said. “That’s what’s driving investments.”
Source http://www.tcpalm.com/