Season, in Florida, runs roughly from November through the end of March, sometimes April depending on the weather up north. Florida is filled with snowbirds, those northerners who are fortunate enough to leave the cold weather behind and spend their winters in the warm sunshine. There are lines at restaurants and stores. Employment goes up. Traffic is a relative mess. The year-round residents are noticeably short-tempered.
And our real estate prices go up. Short term rentals double and triple the normal rate. Home prices can rise 10% or more. If you’re selling or landlording, times are good.
However, if you’re looking for properties to wholesale, fix and flip, or lease option, your job gets a bit harder in season. Sellers are hoping to snag a snowbird with cash in hand willing to pay full price. They are less likely to entertain low ball offers or negotiate terms.
So is the Florida investor dead in the water for five or six months? No, not at all. Sales pick up, but snowbirds tend to buy properties that are move-in ready. Any property that needs more than fresh paint and carpet is not going to make the cut. Over 55 communities, whether they are single family homes, condos or mobiles are more attractive to snowbirds than a residential neighborhood with young families. Retirees like the built-in social life that these communities offer. They tend to buy in every price range, but the social parameters are the same for a $40,000 manufactured home, a $150,000 condo or a $400,000 single family house: a community of people about the same age that includes a club house and activities, access to good doctors and shopping. They don’t care about the school system. They don’t need a big fenced yard.
That leaves a lot of properties that are not in demand: larger properties that are built for big families; fixer-uppers in neighborhoods that don’t appeal to seniors for whatever reason; short sales because they take months to negotiate.
Every region has its season. For most areas, the summer months are the busiest time of year because the kids are out of school and it’s easier to transition them then instead of in the middle of the school year. The winter months bring weather that keeps people indoors. It gets dark earlier and houses show better in daylight. People are busy during the holidays and they particularly don’t want to move at that time.
As a real estate investor you need to be aware of seasonal market changes and plan for them. Part of that may involve timing sales of any retail properties you have to coincide with the buying season. It can mean focusing on the sellers of properties that aren’t in demand at various times of the year.
But the slow season does not mean that you ease up on your marketing. One of my goals during the season this year is to stay in contact with a minimum of 12 owners who are trying to sell their properties to a seasonal cash buyer. I actively encourage these sellers to market at retail. Why? First of all, they’re going to do it anyway. Hope springs eternal. Secondly, if they can sell their house to a retail buyer, that is what’s best for them. One deal is not going to make or break me. I work on the basis of win/win scenarios. If I was running around, giving owners bad advice about their properties, my reputation would suffer. This is a small town; I’d be out of business pretty quickly. I have no problem telling a non-distressed owner of a “pretty” house to list with a Realtor® and see if he can sell the property in the traditional manner. He’s not my market.
But I will contact those owners in April to see if the house has sold. At that point, they are looking at five to six months of carrying costs in front of them until season comes around again. The owners have just experienced market reality. They know the odds of selling at the price or terms they wanted are low. They are more willing to come to the table.
In the meantime, I actively look at fixer uppers and properties in non-snowbird-attractive areas. Many rehabbers fix and flip fewer than five properties a year. My buy, fix and flip, or fix and hold people are happy to have a fast fix property ready to rent in season.
It’s also easier to see which snowbirds did not make it down for their yearly visit, sometimes due to poor health or a financial situation. Those properties are scattered throughout the community. Being familiar with your farm territory or having a good bird dog network can help you find these properties. Houses that are maintained but empty during season (lawns are mowed but hurricane shutters are still up, for example) are prime for marketing.
Know your target market but also know your marketing season. There are slow seasons but if you plan for them in advance and have your strategies in place, there is no need for your business to slow down.