Quote:
Originally Posted by Craig Vernon
While staying in the Villages in the month of May my wife and I looked at many homes but the most interesting was the new construction. We met two couples looking at the new model homes that told us they purchase two homes every year with the intention of renting or even keeping vacant for a year and then selling. They continued by saying they have been doing this process for eight years and made money on all their transactions and "many" others do the same thing. I asked if they live in the Villages, and they said no but they are the reason prices stay higher compared to other Florida locations. Hmmm?
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Just doing some "back of the envelope" calculations, that doesn't sound very profitable to me. It seems to me that a brand-new house of the same size and quality would have to increase in price about 16% to 18% per year just to break even on the deal... not counting anything for your time involved. Making a profit on the deal would require an even greater price increase year-over-year.
I know that housing is becoming more expensive every year, but is it actually increasing at 25% or more per year which is what I figure it would take to make it worthwhile?