Daily Archives: August 29, 2012

College Towns Primed For 2012 Investors

By Natalie Dolce – GlobeSt.com

CAMPBELL, CA-As parents across the country prepare to send their college-bound students to school this fall, many quickly find student housing can be a huge financial undertaking. So says a recent report from Realtor.com. Because of that, according to the site, some are now considering buying homes for their students to live in with classmates, while other potential investors are looking at college towns for rental properties that’ll deliver a steady stream of student tenants and profits.

“I’ve had parents of students get frustrated with the huge price tag on some of the rentals here in the Boston area and they found that it made more sense to buy a condo for their child,” says Willie Mandrell of At Home Real Estate in Boston, in a prepared statement. “Most recently I worked with a Boston University student and her parents purchased a two-bedroom condo in South Boston for her to live in while attending school.”

Darla Jobkar of Northwood Realty Services adds, “Because we’re home to almost 10 colleges and universities within a 10 mile radius of the Pittsburgh city boundaries, there has always been a shortage of housing for students.  For this reason, college and university real estate investments in this area over the years have been a huge success to both long term and short term investors.”

Realtor.com also recently released its second annual round-up of college towns to consider when investing in real estate. Selected from the top 25 schools featured in a recent national report, 10 markets were chosen based on today’s average monthly rent prices compared to estimated mortgage payments of a median priced home in each city.

The list includes: Boston; Princeton, NJ; Chicago; Washington, DC; Houston; Philadelphia; Atlanta; Pittsburgh, PA; Providence, RI; and Los Angeles.

“In today’s market, many real estate investors aren’t necessarily the experienced short term investors of the past,” explains Errol Samuelson, president of Realtor.com. “In many cases, they’re average consumers interested in planning for their financial futures and they look to real estate as a longer term investment option. Rental properties in college towns can be a great option for some investors since schools can present a steady stream of renters that need housing.”

Tips for the Parent Landlord

Having a rental property can present challenges in many circumstances, so often investors hire management companies to deal with the day-to-day needs of renters, explains Realtor.com. “For parents whose tenants are their own child along with friends as roommates, setting up a business relationship can benefit both the parent and child. Tips include requiring the child and their friends to sign a lease agreement to guarantee a steady income each month while holding them accountable for condition of the property.”

According to Realtor.com, the lease should cover terms such as a designated day that rent is due, the security deposit and defines who pays utilities. “These terms will not only teach the students a valuable lesson, but will also protect the parent-landlord and child from a falling out among friends or other issues that can arise and jeopardize rental income.”

Sealing the Envelope: Secrets of Energy Efficient Buildings

ByRich Binsacca – Multifamily Executive Magazine

Portland based developer Ed McNamara is keenly focused on building green and achieving high levels of energy, water and other resource efficiencies. And he’s obligated by HUD and other public financing partners to rent at below-market rates.

His secret to building affordable high performance begins with an understanding of basic building science. “You start by trying to reduce the demand for energy with a tight envelope,” he says, using a systematic and computer-modeled assembly of structural, insulating, air-sealing, fenestration, and cladding components that reduce both air and moisture infiltration and thermal transfer. “That’s where you need to make the smartest decisions to get the most impact for your money.”

That reasoning applies to new buildings as well as existing ones. For its adaptive re-use projects, in which it transforms historic and iconic industrial/commercial buildings into modern multifamily, developer Village Green makes sure to address and improve the envelope first to reap downstream benefits.

“By nominally increasing the thermal value of the walls, we are able to reduce the HVAC equipment size by 5 percent or more,” says Shawn Zimney, V.P. of Development for the Farmington Hills, Mich.-based company. “That not only affords an up-front savings for the equipment, but also reduces our operating expenses later.”

The envelope is so important to McNamara that he doesn’t keep track of whether the system he ultimately installs carries a cost premium. “It’s just what you need to do,” he says, to achieve the 50 percent energy-use reduction he wanted for The Ramona, a 138-units rental property his Turtle Island Development company built in downtown Portland, Ore., where a studio apartment rents for about 55 percent of the market’s median and tenants enjoy monthly utility bills that are half of what they paid elsewhere. “It makes more sense to reduce the demand first,” before installing energy-efficient HVAC equipment and appliances.

Only after he settles on the envelope and calculates the proper size and highest performance possible for a few key mechanical systems does he turn his attention to indoor fixtures and finishes, what he calls “the gadget stuff,” such as solar and recycled-content surfaces that supplement his sustainability goals and message. “I’ll replace them in 10 years, and by then they’ll be more efficient, more available, and cheaper.”

The lack of mainstream investment in green, however, baffles McNamara. “Forget if you believe in the ecological benefits of green building,” he says. “It just makes good business sense for affordable housing to build something that lowers and controls my operating expenses and my turnover.”

As Millennials continue to flood the apartment market, building green will make even more business sense. “The fact that the property was built using green products and is equipped with energy efficient appliances and fixtures is extremely appealing to a potential renter,” says Zimney.

International Business is Booming in Florida

Posted by GLOZAL

A study by Florida REALTORS® indicates that buyers from outside the country still favor the state when it comes to residential real estate. Foreigners are responsible for a fifth of Florida home sales.

Latin American and Caribbean buyers accounted for 35 percent of all foreign purchases in Florida, followed by Canadians, who represented 31 percent of the buying activity, and Western Europeans, who made up 22 percent of the volume.

Their favorite markets were Miami and Miami Beach by far, totaling 31.3 percent of all sales, with Fort Lauderdale coming in second with 11.6 percent.  Overall, Florida REALTORS® calculated, foreign buyers spent $10.71 billion on homes in the state during the 12 months ended June 30, totaling 19 percent of all residential sales volume there.

Non-resident Canadians accounted for 31 percent of foreign purchases, down from 39 percent last year, but remained the No. 1 nationality to buy in Florida, the report said. Brazilians ranked No. 2, totaling 9 percent of purchases, up from 8 percent last year.

Some 82 percent of foreign sales were all cash, down from 86 percent in 2011, said the study. which noted many foreigners have trouble getting mortgages in the United States because of a lack of credit history. “Among recent foreign buyers in Florida, the use of mortgage financing was much less frequent than the overall national average,’’ the study said. “Overall, 17 percent of foreign buyers reported financing their purchase with a mortgage.’’ By contrast, 87 percent of U.S. homebuyers used mortgage financing, according to data from the National Association of Realtors.

Among Brazilians, 49 percent picked a place in Miami-Dade, with Fort Lauderdale emerging as their next favorite spot, with 18.6 percent share, the report said.

Canadians bought across the state, with the Bradenton-Sarasota-Venice area ranking as their favorite with a 14.4 percent share, followed by the Miami-Fort Lauderdale area with 12.9 percent, and Naples-Marco Island area with an 11.9 percent share.

Buyers from the United Kingdom totaled 5 percent of all foreign purchases, down from 7 percent in the year-earlier period.

Total sales volume from international clients is up nationwide, accounting for nearly 5 percent of all sales in the U.S. During the 12 months ended March 2012, foreign buyers spent an estimated at $82.5 billion, up from $66.4 billion one year prior, according to the National Association of REALTORS®.

Read more here: http://www.miamiherald.com/2012/08/27/2970956/foreign-buyers-still-…

 

Source: “Foreign Buyers Still Love Florida Real Estate,” Miami Herald