Nathan Colmer | Van Dyk Group
C: 609.290.4293 | O: 609.492.1511
A falling, shifting or down market can strongly favor buyers-and investors-on Long Beach Island. With naturally high prices and a relatively stable income stream, the LBI market can offer excellent opportunities to balance one's portfolio. LBI real estate investment comes in several forms. You can buy and hold a property as a rental, build a home on spec (house flipping) or simply buy and rent until the market increases with the intention to sell (buy low and sell high). Any of these scenarios can offer advantages over the stock market or other forms of investment. Before looking to buy an investment property on Long Beach Island you should consult your accountant and/or financial advisor to see if such an endeavor is right for you and if so, how much you should invest on LBI.
Be patient and look for the right property on LBI
Negotiate aggressively but be realistic to the LBI real estate market
Look for a stable and reliable rental that will have a minimum of ownership costs or a spec house is the right location
Do not over leverage yourself-slow and steady wins the real estate race on Long Beach Island
Let me begin by saying that every market has opportunities. These opportunities are usually unique to that market so what works well in one market may not work well in another. A great example of this is commercial real estate on Long Beach Island. In many primary markets commercial real estate can offer great rental potential however on LBI, with the short summer season, commercial real estate usually has a low rent roll and a very slow appreciation. Before you consider buying or investing in the LBI real estate market you have to KNOW your market. One of the best ways to do this is to understand the current market trends and understand what creates value on Long Beach Island.
One of the best ways to get involved in the Long Beach Island real estate market is with rental homes. The short term summer rental income has proven year over year to be a steady and reliable source of income provided you buy the right house in the right location. Buying a rental house in a down market can allow you a lower entry point with a good rate of return. Looking at the oceanfront, ocean-block and oceanside locations specifically, as these will usually have the highest rental rates, buying in a falling or changing market should allow you equity appreciation overtime while having a solid rental base of summer tenants.
If being a landlord or landlady is not for you than you may want to consider building a flip house. Building a new home on LBI offers an immediate equity position if you follow the right formula and this position should allow for a nice profit even if the market continues to drop somewhat. Obviously this will involve a larger investment and longer holding costs before you realize that profit but the rewards can be worth the risk.
One area of the LBI real estate market that usually does NOT provide many opportunities are short sales, foreclosures and bank owned homes (REO). These properties are few and far between on Long Beach Island mainly due to the strong rental income that can help a seller avoid losing the property to the bank.
A falling, down or shifting LBI real estate market can provide great opportunities. It is just a matter of determine what you are looking for, what you are able spending and working to find the right fit. I am happy to go over the market and help you customize a plan for LBI real estate investment. Just drop me a line and we can discuss anytime.
Buying a rental house in the Long Beach Island real estate market can provide a steady stream of summer rental income and provide a nice balance to any portfolio.
Building a spec or flip house in the LBI real estate market can allow for a significant profit margin in a roughly 1 year time-frame but this is an involved process and requires an investment of time as well as money.
This "middle ground" investment approach to the LBI real estate market allows an investor to buy a home in a slower or down market, make minor changes and updates, rent the house for a few years and then sell for a profit when the market increases.