Commercial Scouting? for Apartments

The apartment market is a place to focus in the commercial world of real estate. You can have income to pay for the property, while you turn the property around.

Where do you look? How do you know the best places are to look? It is called research, whether you do it personally or get it from other sources. You can search the web, you can listen to the guru's of real estate, you can subscribe to newsletters and buy books or pay for someone to do the research for you. The information is available and the properties are advertised one way or the other. You can look at the statistics, like the ones following this paragraph, but you need to look in order to find commercial properties.

Nationwide, the numbers of renters is projected to increase by 4.3 million households over the next decade, said a spokesperson for the National Multi Housing Council. Additionally, apartment demand is forecast to increase by 430,000 units ANNUALLY!

Wow! Those are BIG numbers!

Just a month ago, there was concern that the possibility of a national recession would drive down sales and returns for investors. But the official ruling is that we are NOT in a recession. That’s good news for us.

Unfortunately, the housing market in many areas of the country has suffered so much because of the sub prime mortgage debacle. This naturally drives the increases in the rise of the number of apartment dwellers. Much of the country can no longer afford home ownership.

Some experts, with ties to Washington are hearing rumors of putting the empty houses back to work. While that’s a great strategy for some, and while it may ultimately impact the number of apartment dwellers, we still see apartments being a strong investment.

People continue to point to problems in the financial markets and the tightening of credit as being responsible for a downturn in activity. But in actuality, total volume for 2007 exceeds $91 BILLION.

Overall apartments performed well as an investment with returns to privately held apartments, in the first nine months of 2007 achieving an annualized rate of 12.6%. That rate is off from the 2006 return of 14.6% and down significantly from the 21.2% returns of 2005.

Still, in this current market a 12.6% return is a respectable showing. I wish some of my other investments would have done as well!

The nation’s apartment stock of buildings with at least five units is valued at $1.6 trillion, and rental revenues from apartments total more than $120 million per year. With this much inventory around, it is likely there are many units which will fit our buying criteria.

Apartments are a solid investment strategy - especially when we can buy it right.

I have talked to several Property Scouts are among the best trained folks in the country, and they are sniffing out the great properties. One's that need a problem fixed, whether management, remodel or both. They are looking for value add and finding the super deals that are out there. They were trained by the National Association of Commercial Real Estate Property Scouts (NACREPS). Visit http://www.nacreps.org if you are looking to start scouting.

Till next time.

Ted

http://visit.dirtintocash.com