multifamily real estate: 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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multifamily real estate: 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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multifamily real estate: 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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multifamily real estate: 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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multifamily real estate: 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
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multifamily real estate: 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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multifamily real estate: Dane County multifamily foreclosures for sale - 02/05/11 09:07 AM
We've been enhancing our MadisonIncomeProperties.com web site with new multifamily real estate investment reports and tools. We've just added a new multifamily foreclosure search tool to our home page and property search menu.
Now, at the click of a button, you can quickly identify the multifamily bank-owned and short sale properties for sale in Madison, Dane County and South Central Wisconsin. As of this post there are 54 properties in the list.
Dan Miller, Realtor, Keller Williams Realty and www.DaneCountyMarket.com and www.MadisonIncomeProperties.com
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multifamily real estate: 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
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multifamily real estate: Perspective from a multifamily investor - 01/27/11 10:43 PM
I recently shared this article on declining apartment vacancy rates in Madison with several investors. One of the investors wrote me back with the following analysis:
"This is in line with the trend we are seeing on the home ownership side. People are not buying and instead renting. The demographic that responds to our ads has changed a lot since 2006. It is the type of people that would have bought a house had there not been so much uncertainty with the economy. It is a good time for owning an investment property because:
1) there are plenty of people looking … (1 comments)
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multifamily real estate: Madison area rental vacancy rates are trending lower - 01/25/11 05:49 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 fourth quarter of 2010 was at its lowest level dating back to the year 2004. The vacancy rate of 2.94% in Q4 of 2010 was less than half the rate of 6.26% recorded in … (0 comments)
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multifamily real estate: 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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multifamily real estate: 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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multifamily real estate: More young adults living with mom and dad, fewer owning homes - 12/15/10 06:59 AM
This article from Calculated Risk shows the homeownership rate for adults under 35 is falling, while the percentage of 25 to 34 years old living at home is increasing.
The graph above suggests some pent-up demand for rental and housing units. When the economy improves, more young adults will be moving out of mom and dad's home and into their own apartment, home or condo. This development will be good for multifamily investors and home owners alike.
Dan Miller, Realtor, Keller Williams Realty and www.DaneCountyMarket.com.
… (3 comments)
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multifamily real estate: 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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multifamily real estate: Apartment vacancies are falling, multifamily sales remain low - 11/04/10 10:48 PM
The real estate research firm Reis Inc, recently reported a 3rd quarter apartment vacancy rate of 7.2%, down from 7.8% the prior quarter.
The demand for rental housing is increasing, while investor demand for multifamily ownership is not. Dane County multifamily sales have stagnated at historically low levels, as the two graphs below show.
One reason multifamily sales have stagnated is the amount of cash required to purchase an income property. Many lenders require 20% to 30% down, which acts as a barrier to entry for many of today's would-be investors.
For those investors who can muster the cash, the prospects … (0 comments)
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multifamily real estate: How the market varies by real estate type - 10/24/10 06:38 AM
The market varies a lot by location, price range and type of real estate. This chart shows how the market varies by real estate type.
It's a buyer's market across all forms of real estate, and buyers will continue to gain more leverage as we approach the slowest time of the sales year.
Dan Miller, Realtor, Keller Williams Realty and www.DaneCountyMarket.com
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multifamily real estate: 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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multifamily real estate: 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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multifamily real estate: Dane County commercial and multifamily real estate reports are updated at DaneCountyMarket.com - 06/07/10 07:37 AM
Our Dane County commercial real estate and Dane County multifamily real estate reports are updated on the economic trends page at DaneCountyMarket.com. Both reports include data updated through the months of April and May.
Have a good one,
Dan Miller, Keller Williams Realty and www.DaneCountyMarket.com
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multifamily real estate: Cash-on-cash return defined - 05/28/10 07:21 AM
We've added a new entry to our list of multifamily investment terms at MadisonIncomeProperties.com. Today we cover how to measure the interest rate retun on invested equity.
Cash-on-cash return measures a property's interest rate return on invested equity (ie cash). Cash-on-cash return is determined by taking the ratio of the annual net cash flow to the invested equity (cash).
As an equation:
Cash-on-cash return = (annual net cash flow)/(invested equity)
Let's suppose an investor purchases a property for $550,000, putting 20% down in cash ($110,000). Also suppose the property cash flows $750 per month or $9,000 per year under this scenario.
Cash-on-cash return = … (0 comments)
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