Slowing Naples Home Sales Results in Flood of Available Rentals
Naples, FL (PRWEB) July 29, 2006 -- The Naples market, after experiencing 20 years of record setting economic and real estate growth, has finally slowed. Due to the sluggish home sales market coupled with a rare, shocking hurricane season, the demand for property management services has greatly increased. Consequently, the sales market is temporarily saturated. Therefore, the demand for home purchasing has slowed, leaving an abundance of vacant properties on the market.
Many investors were relying on a rapid appreciation and a quick profit. However, changing market conditions, previously identified, have put their plans temporarily on hold. With mortgage payments at their heels, these investors have quickly realized that the only solution to their dilemma is to rent their properties. With many of these investors now in a hurry to rent, the number of available rentals has increased dramatically putting downward pressure on rental rates.
Louis Pfaff, President of Synergy Real Estate commented, “Investors are quickly realizing that the rental rates they expect are unrealistic. Simply trying to rent your property to cover your mortgage payment is a recipe for disaster!” ... “Rental rates, like stocks and bonds, are set by the same underlying economic principals of supply and demand. To try and benchmark these rates by artificial, predetermined goals is foolish.”
The fundamental conclusion is that investors should accept these changes to supply and demand, and set a proper rental rate and achievable performance goals. This will ensure the highest possible NOI (net operating income), and go a long way to lessen the blow of a changing market.
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