Southwest Florida Real Estate -Take that Dow Jones

It’s that time of year again.   The business media and its many pundits are issuing all sorts of recommendations for investments that are predicted to perform best in the New Year.  You can barely watch TV or pick up the Wall Street Journal without seeing one.

Despite all its recent woes, real estate still enjoys the potential for being one of the best long-term investments you can make.  That’s because the turmoil that rocked real estate markets over the past few years has largely subsided, leaving Southwest Florida home prices at their lowest level since the turn of the century.  Now presumed to be at or near bottom, prices are expected to trend higher over the next several years; restoring real estate to the reliable long-term growth asset it has traditionally been.  Plus with mortgage interest rates at unprecedented lows, the long-term cost of owning a second home, investment or retirement property has seldom been lower.

Each month, national real estate authority Steve Harney updates a graph comparing returns on investment for real estate versus the Dow, S&P and NASDAQ.  His latest version (shown above) covers the dozen years between January 1, 2000 and January 1, 2012.  Recent volatility in all these markets notwithstanding, had you invested $100 in each in early 2000, by now you would have netted $140 in real estate, $112 on the Dow, $90 on the S&P and $70 on NASDAQ (Source: MSNMoney.com, Case Shiller—updated 01/01/12).

Today’s real estate investors are a far cry from the frenzied, poorly-leveraged property flippers of a few years ago.  They are well-capitalized, often pay in cash; and understand that to profit from real estate typically means hanging on to a well-maintained property for several years.  Still, many investors begin recouping their costs immediately by leasing out their properties in today’s exceedingly strong rental market.

Beyond its investment potential, the purchase of a Southwest Florida home at today’s vastly lower prices will yield much more than a tangible parcel of real estate.  You are also buying into one of America’s most outstanding cultural and recreational scenes, its top-rated beach, a superior choice of schools, universities and medical facilities; and many other first-rate amenities no other region in Florida can match. Plus, yours is an investment you can live in, retire to or vacation from—when you aren’t letting it pay for itself by leasing it out.

Whether purchasing a home for yourself or as a rental property, Michael Saunders & Company will help you achieve each of your real estate goals.  We will help you find, negotiate, finance and close on the property.  Moreover, if you’re an investor-owner, our rental division provides a full range of property management services—including international marketing, pre- and post-rental inspections, tenant screenings, full service accounting and reporting, rent and security deposit collections, lease negotiations and renewals; and property supervision—including repairs, maintenance and cleaning.

Purchasing real estate also has many unique, though less tangible advantages.  For example, when was the last time you drank-in a glorious Southwest Florida sunset from the deck of your stock portfolio—and on a warm night in January?   Take that Dow Jones.

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