SMARTERLANDLORDING

ADVICE FROM EXPERIENCE

Memphis

Real Estate News This Week

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Here is a round up of real estate related news stories I found interesting this week.

  • Home sales in Memphis, TN were either up by 8% or 12% for the month of January depending on who you talked to.  Either way they were up!
  • The foreclosure crisis has decreased home ownership rates across the US.  Less homeowners means more renters.  The market is waking up to this fact.  Keep your eyes open for a possible multi-family price bubble in the future.
  • Banks may have finally figured out that short sales are a good way to dispose of some inventory.  Perhaps now investors will actually be able to complete short sales!
  • Commercial real estate is overbuilt.  The times are changing and businesses like Amazon.com are leading the way.
  • A quick take on the robo-signing deal.   A good deal?
  • Now that the robo-signing deal is done, people may not get to live for free anymore and will actually have to pay their mortgages or rents.  That may suck as much as $50 billion out of the retail economy.
  • Big money is looking to start buying up all those foreclosed single family homes and rent them out.

“The new loan program would likely be only available for deals of $100 million or more.”

 

 

 

Anything else catch your eye this week?  Send me a message and let me know.

 

Will 2012 = Less Vacancies & Higher Rents?

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The vacancy rate for apartments in the US fell to a 10 year low at the end of 2011.  According to Reis, Inc., the vacancy rate fell to 5.2%.  That rate is down from 6.6% a year ago.

 

And as the supply of available apartments decline, guess what goes up?  You got it, rents!  The average monthly rent for the US as a whole increased 2.3% over the past year to just over $1,000.

 

If you are planning on going to Yale University in New Haven, CT, start shopping early for a place to live as they had the nation’s lowest vacancy rate.  New York City, Minneapolis, Portland Oregon and San Jose California rounded out the top five.

 

California took the top two spots for effective rental rate increases.  San Francisco and San Jose were number one and number two with Chattanooga, TN, Austin, TX and New York filling in the top five slots.

 

Jobs are the key to these rent increases.  Both San Francisco and San Jose are seeing new jobs in the tech sector, while Randy Shelly with the Chattanooga REIA explained to me that “he is not surprised” as the Chattanooga area has had a new Volkswagen plant come on line and an Amazon.com distribution center make plans to expand.

 

It seems like 2012 may be shaping up to be a good year for landlords.  I can say that here in Memphis any apartment I have that becomes available has been re-rented fairly quickly in what are supposed to be the slow months of November and December.  But, I have not generally been able to push rental rates up yet.  What have any of you readers experienced?

 

UPDATE

Here is a link to an article in the Daily News which somewhat echos what I said above.  Rents have been pretty much stagnant in the Memphis area as have vacancy rates according to the article.  Perhaps the decrease in vacancy rates I have experienced is due to my particular sub-market.

Searching For Help? Join Your Local REIA Group

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A smart way to get help and advice with your rental properties (besides smarterlandlording.com) is to join your local Real Estate Investment Club.  I belong to the Memphis Investors Group and I can’t tell you how much this group has helped me.

Be Smarter!  Join your local REIA.

 

These clubs are not investment clubs that pool money and buy properties.  Rather, they are clubs of local real estate investors that get together for real estate education and networking.

 

Join up and get to know other investors in your area.  Most will be happy to share knowledge and info with you once they get to know you.  One of the great things about real estate investing is that my competitors are also my colleagues.  We often call or talk with each other for advice or feedback on deals.  Why is this possible? It is because there is so much real estate out there.  So join up and meet like minded people today

 

There are real estate clubs like the Memphis Investors Group in major cities all across the county.  To find one near you, take a look at the National REIA website.