Many condo buyers, particularly in Orlando, are facing three tough options

I mostly sell in Orlando, and I´m finding that large numbers of our condo buyers, especially those of modest means, are now faced with three options. 

The first is that they continue trying to find good value properties in middle class areas in the $60,000 - $100,000 range. This is now extremely difficult due to a very low inventory, high demand, and banks holding tightly onto the majority of their foreclosure stock (it´s taking much longer than usual to buy short sales these days). 

If the first option of purchasing units ranging from $60,000 - $100,000 is very limited, the next obvious option is that they move further up the food chain and purchase higher quality condos located in the best neighborhoods in the $95,000 - $150,000 range. 

There is a decent selection of these available to those in the know and they offer very solid cash flow with potential of excellent medium term capital growth.  Best of all, they will be the first to provide equity release and resale opportunities when mortgage lending makes its long overdue recovery. This last point is crucial. 

The third option is you move down the food chain and source properties in lower income neighborhoods in the $35,000 - $50,000 price range. Some of these look like unbelievable bargains compared to what they were selling for in 2005/6. 

Appearances can be very deceptive with these deals though. Experience and gut instinct tells me that most properties purchased in low income areas towards the end of a recession will generate highly irregular income and will take an unacceptably long time to generate meaningful capital growth. 

If you´re going to be an "absentee landlord" and will be relying on a local company to manage your tenants, my advice would be to stay well clear of low income neighborhoods. Keep saving until you can afford something better. 

All the best

Colin Murphy

Torcana