Good morning, Everyone! Here is your weekly 5 Minute Friday, highlighting a couple of the questions or issues posed to me this week. From Terri: Does offering a house fully furnished change how much I can charge for rent? My Response: Terri–Thanks for the question. The short answer is Yes, it can and will change how much you can charge for rent…..or rather, a better answer is it can and will change how much you will earn in rental revenue. Here’s some things to consider when choosing to offer a property fully furnished or completely unfurnished: What is the actual market for furnished rentals in your area? In most market segments across the country, especially in SFR’s (single family residences), furnished rental demand is a small sliver of the total demand. As in less than 10%. So, if you have a 4 bedroom home, if you offer it only fully […]
The Backstory to Now…. Clients who hire me to coach them before and during their first investment property transaction ask how and when and where all the money came from Wall Street to buy so many thousands of rental homes. Answering them takes patience and detailed explanations as this is the first time in history such a platform of investment has occurred on such a massive scale. This WSJ article does a solid job of discussing the backstory, the history, and leads with some hints about where the industry of property leasing is headed. After all, big investors have plopped $40,000,000,000 into buying 200,000 houses as rentals. Some questions for you to ponder as you read the article: As a small, private investor: How can you compete with these powerhouse-landlords on pricing, marketing, and profit margins? As a property manager: What lessons can you take away from the article on […]
Unemployment is down. The Stock Market is soaring. Everyone is happy. But should they be? It’s times like these when that trusty Spidey-sense starts to tingle…play the real estate investment game long enough, and you see the telltale signs of impending mayhem ahead: Everyone and their brother suddenly thinks real estate is easy money. (We can tell by the phone calls and referrals we get on this qualitative point. And the calls and referrals are coming hot and heavy right now….) Folks who shouldn’t be buying rental properties are buying them up faster than Fidget Spinners. (Always a dead give away when the question gets asked,”How many months of PITI do you have in reserve for when this property goes vacant?” and the buyer has that deer-in-the-headlights-look.) Banks easing their lending standards to allow for more marginal buyers. (No income, no doc loans are back. Yes, seriously, they are.) Yup….it’s […]
All, Here’s the YTD rental stats for the areas we track in Indianapolis and surrounding communities. 2017 has started off strong with stable pricing, stable DOM, and stable inventories. Indy Rental Stats YTD Stay focused my friends, as I don’t anticipate this staying the status quo into Q3 and Q4. More about those expectations at a later post.
“There is a shortage of quality rental housing.” Fist pump time if you’re a Landlord or Investor. That’s the overall opinions of some of the top managers of large, institutional portfolios of single family residences (SFR). Here’s the link to the brief article: http://nreionline.com/single-family-housing/top-sfr-owners-plan-grow-2017 It indicates, if demand for SFR’s remains stable, that rent prices should remain solid and absorption rates should be strong. What it also, indicates however, is that these same large institutional portfolios have new targets–YOU. As a smaller operator of SFR’s, you are seen as the enemy. You’re the competition. You’re who they want to gobble up or squash out of the rental game. So here’s the question for today: These portfolio managers have the spare cash, the human resources, the advanced technology, and the patience to crush you. How do you plan on continuing to compete against them? Go Guerrilla Warfare style against them. Here’s […]
If you own or are considering owning high end apartments as rental properties, do yourself a favor and check out this article from the WSJ. When a reporter uses vocabulary including “rough conditions” and “slash rents” and “deep concessions” and “glut of supply” ALL in the same sentence, that’s a not-so-subtle hint of the valuable information in the news article. Luxury Apartment Boom Looks Set to Fizzle in 2017 – WSJ Certainly, every market segment from first-time renters to move-up renters to empty-nesters has an ebb and flow to it. It’s capitalism and the forces Adam Smith described centuries ago. What you do with this information is the critical point and take away. Depending on your current interests, this could also be a buying opportunity for some savvy investors to pick up units from distressed landlords. As always, here’s to your pursuit of Financial Freedom!
Here’s the YTD stats for the Indianapolis area through October. Still solid demand, although we are monitoring Zionsville closely as the DOM has ticked up there, perhaps due to the trepidation of the election overwhelming folks lives last month. indy-rental-stats-ytd-thru-october-2016 While you’re reviewing the numbers, how about you help your friend learn about real estate investing by forwarding this email to them so they can subscribe, too? (It’ll make you rich….it’ll make you thin. It’ll make you rich and thin.) (ok….it won’t make you thin, but the rich part is highly likely.)
The rental market areas for Indianapolis and surrounding communities continues to maintain momentum into Fall 2016. Here’s the updated stats through August 2016. indy-rental-stats-ytd-through-august-2016 As always, if you have specific market questions or would like more in depth analysis and projections for your personal portfolio, just call or click.