In determining whether go zone investment real estate is right for you, an understanding of go zone tax credits, rental income investment incentives, location, rental market, economic environment and future potential profit are all factors that must be considered.
Step 1 – What Is the Go Zone Investment Act
The U.S. Congress responded to the devastation caused by hurricane Katrina in December 2005 by passing the Gulf Opportunity Zone Act of 2005 (the "GO Zone Investment Act") that provides support to individuals Read More
Step 2 – Why Should Investors Consider Go Zone Investments?
From a pure investment perspective, no opportunity in the U.S. today combines all the factors that are currently available in a go zone investment opportunity. Get details on how you can make over $60,000 cash return on $13,000 down
Step 3 – Researching the Various Areas
As things stand today at the end of Q3 2007, one area in Mississippi is experiencing a perfect
In any real estate investment, timing is crucial. The ideal time to purchase real estate is at the start of an upswing cycle. Factors to consider are the number of people coming into the area, job creation, economic incentives, location and future growth prospects. It is our opinion that the investment characteristics of the Biloxi and Gulfport area are the most attractive in the entire go zone investment region due to the following reasons:
In Migration – By far the best rates of in migration are in Biloxi and Gulfport today. The ability to build casinos on land versus previously on barges has changed the dynamics of the industry. Casinos in Biloxi today are generating more revenue than they did prior to Katrina, and at least 8 additional casinos are in planning and building stages. This area has the potential to be the second largest casino and gaming destination in the country.
Job Creation - However, it’s not just about casinos. NASA, aerospace, defense, military, airforce, shipbuilding, steel and tourism are just a few of the industries that have strongholds in the area. Were it not for NASA at Stennis, the job loss during the months following Katrina would have been far worse. Job growth is currently sizzling – just the casinos are expected to generate an additional 20,000 jobs over the coming months. The growth of various business sectors combined with go zone investment incentives for real estate investing create a unique once in a decade opportunity for investment.
Economic Incentives – The federal go zone investment incentives being offered are the most attractive in the three county area of Hancock, Harrison and Jackson, all coastline counties where the devastation was greatest.
Rental Demand – The need for rental housing is dire. Casinos are trucking in employees on hour long drives because they cannot locate housing near the casino areas. Renters have been forced to stay in FEMA trailers due to the lack of rental units. It is for this reason that the government is offering the go zone investment incentives for investors to come in and provide rental housing units. The sub prime crisis will only exacerbate the situation, creating and accelerating the need for housing.
Location & Future Prospects – Job growth, population growth and in this case go zone investment incentives are the precursors of economic growth and property appreciation. It is widely expected that Biloxi and Gulfport have the opportunity to become the Las Vegas of the south in the coming years. Proximity to New Orleans creates the likelihood that a megalopolis will emerge in a few years and an ideal location for investment opportunities is the area between Gulfport and New Orleans.
Pricing & Cash Flows – Any investment at the end of the day comes down to pricing and cash flows. Investment activity has been particularly robust in the single family home market, with three bedroom single family homes being snapped up by investors at prices ranging less than $100 per sq foot.
Go zone investment incentives create an upfront cash back opportunity. Equity in these homes versus appraisal has been ranging around 15 to 18% below market value. Tax incentives can create cash savings of upwards of $40,000 per duplex. Appreciation in the area is expected to be 50% over the next 5 years according to industry experts. And the rental rates generate monthly positive cash flow creating an incredibly unique no net money down go zone real estate investment opportunity.
