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4 Market Phases You Must Know For Real Estate Investing in 2020

If you’re new to commercial real estate, or investing in real estate period, you may not be aware that there are four market phases that you need to get to know quite well. Fortunately, they aren’t difficult to understand, but they play a tremendous role in what’s hot, what’s not, and what type of real estate is successful at what time. Many new business owners or investors may not take the market phases into consideration, but you’ll find you will understand the market and make sound business decisions when you do.

4 Market Phases You Must Know For Real Estate Investing in 2020 

  • Recovery
  • Expansion
  • Hyper-Supply
  • Recession

Recovery, or Phase One, is when there is no new construction happening and declining vacancy. It can be difficult to secure a business loan when the market is in this phase, but this is a phase that most areas of the country are not in, or emerging from. Many new investors are afraid to invest during this phase, but with a good financial planner and some good demographic data and study, you could potentially do very well during this phase.

Expansion, or Phase Two, is where many markets hover – one of them being multi-family units, and there’s no real sign of that ending because the United States has become a nation of renters, particularly in some locales. This is again where you need to pay special attention to demographics and know a little something about how generational attitudes affect the real estate market. Baby boomers and Millennials are more likely to rent than Generation Xers, who are more likely to buy a home. Get to know your area’s demographic as well as you know a family member. If you’re in an area of many Baby Boomers (Florida in general may fit here), multi-family unit investment may be a great business venture.

Hyper-Supply, or Phase 3, is generally happening vacancies abound, but new construction continues. This is generally not a great time to buy or build commercial property. Take a careful look at your locale at understand that a failing economy can have a tremendous hand in keeping a market at this level. Understand that just because the economy is doing better on a national scale may not mean the local economy is. Did a major supplier of jobs just shut down in your area, such as a large factory? If so, you may see the local market quickly fade into Hyper-Supply, no matter where it was before.

Recession, or Phase 4, means there’s not a great cash flow and it’s going to hit the real estate market hard. Properties can lose value, vacancy rates are increasing, new construction comes to a halt, and Wall Street may not be doing very well. True national recessions happen rarely, but local recessions are common to areas at different times for different reasons. It’s still possible to invest during his market phase, but it usually takes someone with quite a bit of experience to navigate it efficiently, and you must know the particular market you’re dealing with.

This is a very brief synopsis of introductory to market phases, but investors should understand that they exist and are important. They are definitely worth studying and understanding if you want to do well with investing in commercial real estate.

 
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Newest Key West Commercial Properties on the Market

If you missed it last time this property is back on the market. A rare opportunity on Lower Matecumbe. The potential is limited only by the imagination. This prime location on US 1 with open water ocean views is zoned NC (Neighborhood Commercial.) Also listed as a Multi-Family dwelling. Originally permitted by Monroe County as a 3 unit apartment building, today it has a 2 bedroom 1 bath unit upstairs with a good monthly rental history. A 7-day vacation license from Islamorada is possible. Downstairs has an office with an ocean view with a kitchen/dining room and a bedroom and half bath. The 6900 sq ft lot is fenced on both sides and the rear for privacy, an outdoor shower, washer and dryer and trailer storage while the front is open for parking and presently a rental business for kayaks and bicycles. The office with a view is occupied by a Mai D'cor a home design center. Zoning allows for a variety of other ventures in this perfectly located residential/commercial property $1,590,000 Active

74452 Overseas Highway ISLAMORADA, Florida

3 Beds 2 Baths 3,346 SqFt

Rare opportunity to own a versatile property in the heart of Key West's vibrant Truman Waterfront. This property has been home to several Grocery Stores making it the perfect investment for those who seek flexibility and multi-purpose functionality. Loaded with potential, this property sits on a large 94.6 X 43 foot lot approximately 4067 square feet. Located on the corner of Truman Avenue and Emma Street with a 1200sf building being sold ASIS. Many possibilities with the NEW Truman Waterfront Park, Amphitheater, Fort Zachary Taylor beach park all nearby. Future use based on city approval. $1,400,000 Active

200 Truman Avenue KEY WEST, Florida

1,200 SqFt

Hard to find small office space available in Old Town! Freshly updated professional offices 170sf for $1000+ per month. Join the friendly business environment at Key West Theater catering to local small business owners. Wifi, electric and water included, sales tax is in addition to the monthly rent quoted. $1,000 Active

524 Eaton Street 211 KEY WEST, Florida

2 Baths 16,470 SqFt

Hard to find small office space available in Old Town! Freshly updated professional offices 290sf for $1300+ per month. Join the friendly business environment at Key West Theater catering to local small business owners. Wifi, electric and water included, sales tax is in addition to the monthly rent quoted. $1,300 Active

524 Eaton Street 208 KEY WEST, Florida

2 Baths 16,470 SqFt

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Posted in: Business Loans, Business Solutions, Buyers, Buying Commercial Real Estate, Environmental Concerns For Businesses, Owning a Business, State of Florida Tagged: 4 Market Phases of Real Estate, Florida Market Phases, Knowing The Market Phase of Commerical Real Estate, Market Expansion, Market Hyper-Supply, Market Recession, Market Recovery, Understing Your Real Estate Market, Why MultiFamily Units Are A Safe Investiment

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