Investors have many questions about the current condition of the Longboat Key real estate market. It’s no secret that the housing market is in a state of flux after the unique series of events that have taken place in recent years. People want to know how rising interest rates and heavy inflation will impact the market for homes for sale in Longboat Key. Despite the existence of these factors, this could still be a great time to invest in property. Below are some of the benefits you will experience if you choose to purchase luxury Longboat Key real estate.
1. Real estate is a hard asset
A hard asset is something with visual and tangible value. The worth of a home is easy to perceive, especially when compared to a soft asset such as a stock. For this reason, the value of a home is less likely to quickly or drastically fluctuate. Anyone who is familiar with the stock market understands how the price of a stock can rise and fall multiple times within the same day. Home prices don’t do this. If a home were ever going to lose a significant portion of its value, it would be a slow trickle that would take months or years to become noticeable. You can invest in luxury real estate with the confidence that it will hold the majority of its value over time.
2. There’s always a market for luxury real estate
In some ways, it’s helpful to talk about the current state of the market when considering the value of luxury real estate. It’s also important to remember that luxury real estate sometimes operates in a market of its own. Buyers of luxury properties don’t have to worry as much about economic recessions or financial volatility as traditional buyers do. They have enough margin and flexibility to thrive regardless of what the market is doing. Longboat Key is a desirable area because of its proximity to the coast, along with nearby amenities such as world-class golf courses and luxurious spas. Qualified buyers with an interest in luxury properties will always emerge if you ever choose to put your home on the market.
3. Home prices are outpacing inflation
Over the last 100 years, home prices have outpaced inflation by a rate of nearly 3%. This is especially important to remember during a time when the market is in a slight recession. Over the past 100 years, the national housing market has experienced serious economic events such as the Great Depression of the 1930s as well as the major market crash of 2008. Each time the housing market has rebounded and come back stronger than it was before. The market is well-positioned to come back from the current set of challenges and be in a better future position, which should instill greater confidence in current and future investors.
4. You can generate passive income
Many owners of luxury homes buy their property to use as a second or vacation home. This means you’ll spend a significant portion of your time elsewhere, but your home doesn’t have to sit vacant or idle. You can turn your home into a money-making machine during the times when you’re not using the property. Many owners of luxury vacation homes find success when listing their property on a platform such as Airbnb or VRBO. There are unique tax implications that come into play that you’ll want to be aware of, and you may want to hire a property manager and a communications assistant who can help you with the day-to-day responsibilities. Most homeowners find that the benefits heavily outweigh the costs, but make sure you speak with a professional before deciding to rent out your second home.
5. You can take steps to increase your home’s value
You can make small (or large) improvements to the home that improve your quality of living while also raising your property value. There are a number of ways that you can accomplish this goal. Homeowners have found recently that minor renovations in their kitchen and bathroom have yielded the greatest possible return. Something as simple as repainting your kitchen cabinets could make it appear as though you completed a larger renovation.
Improving your home’s energy efficiency is another project with great potential. Utility costs continue to get higher, and many people are looking for ways to save money on their bills. You can make your home more energy efficient by replacing older appliances with newer models or by improving your home’s insulation. You’ll make more money when you sell while also reaping the benefits in the meantime.
6. You can capitalize on lower sales prices
The market is down slightly right now, but it won’t stay down for long. Once interest rates come down, it’s likely that buyer demand will increase, and sales prices will rise. You can take advantage of a time when the market is slower, and competition isn’t as stiff. You’ll go ahead and start building equity in your home while maintaining the flexibility to refinance your loan later on. In the meantime, you can lower your starting interest rate by taking steps to raise your credit score or putting down more money at closing. Another easy way to find a better interest rate is to simply talk with more lenders before you make a final decision. You may find a better interest rate simply by shopping around and seeing who can give you the best deal.
Work with Alexis Smith-Frady to invest in homes for sale in Longboat Key
Alexis Smith-Frady is standing by, ready to help you when you feel ready to begin your search for homes for sale in Longboat Key. Alexis has spent years working as a trusted resource for many buyers and sellers in Longboat Key and the surrounding area. She consistently provides high levels of value through her expert negotiating skills and her excellent customer service. She would love to partner with you if you decide this is the right time for you to test the market.