COVID-19 Crisis 2020: Why buy rental properties in Marion County? Because Ocala renters paid April rent, defying national statistics.
Investing in rental real estate is a long-term commitment. With the COVID-19 crisis impacting jobs in tourism-heavy areas of Florida, investing in Ocala, an area with a lower tourism base, can be a smart move for the both the short and long term. The statistics bear that out.
Nationally, nearly a third of renters across America didn’t pay rent for April, according to the National Multifamily Housing Council, a trade association for the apartment industry. At Resolute Property Management in Ocala, 92% of tenants paid their rent on time for April. In fact, “the first quarter of 2020 was the highest percentage of Q1 rents collected by our Company than in any other year prior,” said Clay Lehman, President of Resolute Property Management.
Of course, it’s likely that some of Resolute’ s tenants will need to go on a payment plan for their rent due in May. Ocala is not entirely immune from COVID-19-related unemployment. For Resolute’s investors, however, 2020 has been a very good rent-collecting year.
Why are Ocala renters better able to pay their rent during the coronavirus crisis than some other cities in Florida? The answer may lie in the area’s employment base.
Ocala Employment Base Vs. Other Areas of Florida – In a Good Position
Even in the most economically challenging times, some industries do well. Right now, people who are sheltering in place are relying upon home deliveries more than ever, which means that employees working in distribution centers or in the logistics industry are crucial to our economy and to people’s daily lives. Ocala has major distribution centers for AutoZone, FedEx, Chewy, Dollar Tree, McLane Grocery Distribution and more. Amazon recently announced that they’re building a massive distribution center in Marion County as well.
Several large transportation, parts and trucking-related companies operate from Ocala, including R+L Trucking, one of the nation’s largest trucking firms, and over a dozen other trucking companies. Additionally, internet companies Real Truck and Raney’s Truck Parts. Major assembly companies and manufacturers are also located in Marion County, including E-One (emergency vehicles), Cardinal LG (part of Cardinal Glass), Custom Window Systems, Lockheed-Martin, and many others. Last year, over 700 new manufacturing jobs were added to an already significant manufacturing employment base. (For more information on major Ocala employers, visit the OcalaCEP at https://bit.ly/2JUTCaA)
These employers give Ocala a layer of protection when it comes to the long-term economic picture—with this employment stability making it more likely that Ocala residents will be able pay their rent when compared to people living in areas without these opportunities. Compare Ocala’s industries to cities in Florida that focus more significantly on tourism, services and hospitality, for example, and Ocala may be a more ideal choice for investors. As the United States emerges from this coronavirus crisis, people may continue to prioritize their dollars and may not be spending them on pricey vacations right away. They’ll be focusing more on the essentials, and tourism-dependent areas may take a long time to recover.
Good Deals May Be Available Right Now for Savvy Ocala Investors
Some people are full-time real estate investors, while others may have a property or two, or have simply been testing the landlord waters. During COVID-19, people who hadn’t built up a rainy-day fund may be willing to sell at a good price, and these purchases could facilitate a positive monthly cash flow for investors.
That isn’t necessarily true in, say, Tampa or Orlando, where homes are typically more expensive and often won’t cash flow. In fact, some of Resolute’ s clients are Tampa or Orlando investors who have been priced out of those markets or are experiencing multiple bid situations when pursuing rentals in those locations. Many investors are looking at tertiary markets, with Ocala at the top of the list.
So, if you’re looking to buy in North Central Florida, now can be the time to aggressively look for good deals, when there may be a short-term drop in prices, with sellers more committed to negotiating and closing transactions.
Resolute Property Management Can Broker Deals for Investors
First, if you’re looking to buy, great deals may be available. If you’re looking to sell, right now is an opportune time since showing volume is currently lower. However, local conversions and closings are higher, indicating that less committed buyers may be hesitating, but people who need to move are still acting.
Whether you’re looking to buy or sell in Marion County, we invite you to contact us online or by calling Joe or Clay at 352-414-5292. We may be able to broker a deal with another investor-client of ours, which could save you time and money.