investing: Rental properties selling at a 32% discount from 2006 - 02/03/12 07:25 AM
The stars have aligned for Dane County multifamily investors.
Rental vacancy rates continue to move to new lows. According to MG&E, the Madison multifamily vacancy rate was just 2.16% in Q4 of 2011, well below the 5.7% vacancy rate from 6 years earlier.
The strong tenant demand for rental housing has allowed many investors to raise their rents over the last several years.
And, Dane County income properties are now selling at a 32% discount from the properties that sold in 2006. Our latest gross rent multiplier report shows the average investor in 2011 could receive the same rental income as the average investor in 2006, … (1 comments)
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investing: Madison apartment vacancy rates continue to decrease - 11/18/11 07:16 AM
The news for multifamily investors continues to get better, as Madison area apartment vacancy rates continue to decline, according to data provided by MG&E.
As you'll see from the MG&E graph below the rental vacancy rate in Q3 of 2011 was at the lowest level for any third quarter in many years. The vacancy rate of 2.57% in Q3 of 2011 was down from the 3.7% recorded in Q3 of 2010, and it was less than half the rate of 6.43% recorded in Q3 of 2005.
Now is a great time to learn more about multifamily investing, with the prices … (1 comments)
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investing: Dane County multifamily real estate: inventory high, sales low - 08/29/11 08:13 AM
Our latest report on the Dane County multifamily real estate market shows there are 43.5 months of inventory on the market right now. To put this number in perspective, the 43.5 months of inventory are more than twice the level for Dane County condos, and more than 3 times the level for Dane County homes.
The imbalance of supply and demand in today's market heavily favors the investor. The units that are selling right now are selling for values that were inconceivable just a few years ago.
Check out the investing page at DaneCountyMarket.com to learn more about the multifamily market and how we … (0 comments)
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investing: Madison multifamily vacancy rates continue to move lower - 07/27/11 06:48 AM
Madison multifamily vacancy rates continue to move lower according to data provided by Madison Gas & Electric.
The apartment vacancy rate for Q2 of 2011 was at the lowest level for any second quarter in many years. The vacancy rate of 3.54% in Q2 of 2011 was down from the 4.72% recorded in Q2 of 2010, and it was half the rate of 7.03% recorded in Q2 of 2005.
We expect the apartment vacancy rate to be at very low levels for at least the next several years. Home ownership rates continue to decline, creating more demand for rental housing. At the … (0 comments)
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investing: Multifamily investment spreadsheet - 07/26/11 06:51 AM
We've added a new investor tool to our web site MadisonIncomeProperties.com. This spreadsheet is designed to help you quickly evaluate an investment by varying the purchase price, the down payment, and financing costs. Based on your input, the spreadsheet will calculate the cash-on-cash return, capitalization rate, debt service coverage ratio, and gross rent multiplier.
The tool also includes links to a few key investment ratio definitions.
We welcome your feedback for making this tool better. Please feel free to contact me at any time with any constructive feedback you may have.
Dan Miller, Realtor, Keller Williams Realty and www.DaneCountyMarket.com
… (1 comments)
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investing: Madison rental vacancy rates continue to move lower - 04/19/11 06:58 AM
Madison Gas & Electric tracks quarterly rental vacancy rates for multifamily real estate in the Madison area. MG&E defines its rental vacancy rate as "the percentage of apartment buildings in MGE's service area that appear to be vacant because the gas and electric service is inactive or the service has been moved to the owner's name."
As you'll see from the graph below the rental vacancy rate in the first quarter of 2011 was at its lowest level in many years. The vacancy rate of 2.85% in Q1 of 2011 was down from the 2.94% recorded in Q4 of 2010, and it was … (0 comments)
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investing: Dane County multifamily real estate available at a 25% discount - 01/30/11 06:45 AM
Our analysis of the Dane County gross rent multiplier for multifamily real estate shows the investor from 2010 was able to achieve the same rental income as the investor from 2006, but at a 25% discount. You can read our full article on MadisonIncomeProperties.com.
Also, watch out for a feature article on multifamily investing in next week's Wisconsin State Journal.
Dan Miller, Realtor, Keller Williams Realty and www.DaneCountyMarket.com
www.HowWeHelpYouSell.com
www.HowWeHelpYouBuy.com
www.OurRecentSales.com
www.SearchDaneCounty.com
… (2 comments)
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investing: Dane County multifamily sales continue along historically low levels - 01/19/11 06:17 AM
We recently reported the return on investment for Dane County multifamily investors is at its highest level in 10 years.
That's because inventory is high (at over 35 months) and demand remains low. Sales have remained flat over the last 24 months, with many more units expiring rather than selling.
As you'll see from this graph, the current sales pace is in line with the lowest sales levels of the previous decade.
For more information on Dane County and Madison multifamily investing, visit www.MadisonIncomeProperties.com.
Dan Miller, Realtor, Keller Williams Realty and www.DaneCountyMarket.com
www.HowWeHelpYouSell.com
www.HowWeHelpYouBuy.com
www.OurRecentSales.com
www.SearchDaneCounty.com
… (0 comments)
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investing: Dane County multifamily return on investment highest since the year 2000 - 01/18/11 07:05 AM
The graph below shows the annual gross income to sales price ratio dating back to the year 2000. The ratio began the decade at 12% and declined until 2006, when it bottomed out at 8.8%. Since that time the ratio has been rising. The ratio ended the year 2010 at 11.8%, the highest value since the year 2000.
For more on the Dane County multifamily market, check out our updated monthly report at MadisonIncomeProperties.com.
Dan Miller, Realtor, Keller Williams Realty and www.DaneCountyMarket.com
www.HowWeHelpYouSell.com
www.HowWeHelpYouBuy.com
www.OurRecentSales.com
www.SearchDaneCounty.com
… (0 comments)
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investing: Plenty of multifamily foreclosures on the market - 01/15/11 09:42 AM
We track Dane County foreclosures on a monthly basis, and in the course of doing so we're noticing a lot of multifamily foreclosure filings in Dane County.
Many of the buyers who purchased rental properties in the middle part of the decade expected their investments to appreciate in value quickly, at which time their investments could be sold for a profit. Unfortunately many of these properties did not cash flow out of the gate. Investors purchased these properties at historically high prices, and prices have only fallen since.
Although some investors from the middle of the decade have fallen on hard times, it … (1 comments)
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investing: Return on investment improving for Dane County multifamily real estate - 11/29/10 07:00 AM
We know from experience many of today's multifamily properties are selling for less than what they sold for a few years ago. In other words many of today's properties offer a greater return on investment compared to previous years. But what do the broader numbers say?
We can analyze data from the South Central Wisconsin MLS to assess the return on investment for Dane County multifamily real estate. We can do this by assessing the annual gross income and the selling price that are attached to sold MLS listings. This gives us the Annual Gross Income to Sales Price Ratio. The … (0 comments)
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investing: Supply far exceeds demand in the Dane County multifamily market - 10/18/10 07:43 AM
Over the last 12 months, 489 Dane County multifamily units (units, not properties) have sold via the South Central Wisconsin MLS. A total of 1,723 units have seen their listings expire without a sale.
As you will see from the graph below, multifamily sales were in the range of 1,000 units sold per year during the first half of the decade, before the market started to shift. Now multifamily sales are more than 50% below the levels from many of the years in the early part of the decade.
The vast majority of today's multifamily listings expire without a … (0 comments)
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investing: Should I flip this house? - 08/31/10 10:18 PM
I've been asked this question two times in the past several weeks and both times my answer was a clear "no".
Six years ago anyone could flip a house. Sales and prices were rising quickly, and the "flipper margin for error" was very large. Back then the market was so hot a flipper's investment would appreciate in value before he even owned it (a property's market value would rise even as the investor waited for his property to close following his accepted offer).
Now the flipper margin for error is zero.
Unless you truly know what you're doing, you should steer … (4 comments)
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investing: Dane County multifamily real estate - buyers have the leverage - 08/14/10 07:13 AM
According to our latest Dane County multifamily real estate update, investors continue to hold all of the cards in the multifamily market. The Dane County multifamily listing success rate is now down to 19.4%. That means more than 80% of all multifamily units listed on the South Central Wisconsin MLS end up expiring without a sale.
This graph shows how the leverage has shifted from seller to investor over the last several years.
Another trend we are noticing is a growing number of multifamily foreclosure filings, as well as a growing number of multifamily foreclosures for sale. The numbers are … (0 comments)
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investing: Capitalization rate defined - 05/26/10 06:54 AM
We continue to define important multifamily investment terms at MadisonIncomeProperties.com. Today we'll cover how to measure an investment's capitalization rate.
The capitalization rate (cap rate) measures a multifamily property's unleveraged (ie all cash) interest rate return. This measure is the ratio of net operating income to the purchase price of the property. In other words:
Cap rate = (net operating income)/(all cash purchase price)
For example, suppose an investor is considering a property priced at $550,000. The listing for this property states an annual net operating income of $55,000. In this case the cap rate is equal to 10%.
Cap rate … (5 comments)
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investing: Three key multifamily investment terms - 05/10/10 06:32 AM
We're starting to assemble a list of key multifamily investment terms on www.MadisonIncomeProperties.com. The first 3 are relatively simple, but important to understand.
net operating income debt service coverage ratio loan-to-value ratio We'll be adding more terms to this list in the coming weeks.
Have a good day,
Dan Miller, Keller Williams Realty and www.DaneCountyMarket.com
… (3 comments)
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investing: Tax credit, foreclosures spur Dane County multifamily real estate - 05/08/10 08:04 AM
March was a good month for Dane County multifamily real estate, with 11 sold listings totaling 48 units and over $4.1 million in sales.
April will also end up being a good month for multifamily sales. The tax credit is spurring the sale of duplexes, and foreclosures are accounting for a large proportion of the sales with 4 or more units.
Still, there are over 42 months of inventory on the market, with a lot of inventory waiting in the wings due to a slew of foreclosures over the past year.
There are some good investments to be had right now, … (0 comments)
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investing: Over 44 months of inventory in the Dane County multifamily market - 04/06/10 07:03 AM
Seven Dane County multifamily listings totaling 19 units and $960,501 in sales were recorded in February via the South Central Wisconsin MLS. That's a slow month for the multifamily market.
Investors have all the leverage right now, with more than 44 months of inventory on the multifamily market.
For more details on the Dane County multifamily market, you can check out our monthly report on MadisonIncomeProperties.com.
Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com
… (0 comments)
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investing: Multifamily investment term #1: net operating income - 11/29/09 09:17 AM
We've covered how the Dane County multifamily real estate market has changed, presenting investors with new opportunities that weren't available a few years ago. Due to this clear market shift, we've created a new web site, MadisonIncomeProperties.com, which we've designed to help Dane County investors with their multifamily real estate goals. We'll be adding more content to our site over the next several weeks, including a multifamily real estate search tool, so please check back often as we round out our site.
One of the tools we'll be adding soon is a glossary of investments terms, and we'll begin by covering these terms one-by-one in our … (3 comments)
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investing: How some investors are using their cash - 11/28/09 07:25 AM
We recently wrote about 4 brothers who are using their cash to invest in multifamily real estate - a long term approach to real estate investing. Other investors are using their cash in a different way.
We're working with one local investor group that has amassed a large sum of money for short-term real estate investment. The investor group uses its cash to buy distressed properties, which are then rehabbed and sold for a profit. Because this group pays cash for its investments, it can close on a property in a matter of a few days once an offer is accepted. This makes … (1 comments)
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