For 2006 Texans saw an increase in investors from other states. Bryan/College Station was no exception. Our duplex prices were the first to be inflated from the newfound money sources. Duplexes that were selling for 179,000 in 2005, were suddenly, in spring of 2006 selling for 239,000. These duplexes, meantime, are overbuilt and suffer from low rents and higher than average vacancies. Median rent on each side of a newer duplex in the south end of College Station remains around $900 per month, while vacancies are a steep 19%, and cause many to discount per side rentals to $750 or less for a 3 bedroom.
In sharp contrast is the average single family home. In 2006 I sold several high-end to average homes to investors. Each and every one of these, I'm proud to say is occupied currently and rent is, on every one of these units a robust 1% of the home price or better per month. These homes were all priced between 135-160K, all in excellent neighborhoods and all targeted to either associate professors, graduate students or young families. For my clients that had ready cash that translates into 12% return (less expenses) on their investment plus the whopping 8.6% appreciation that the Texas Real Estate Center estimates for 2006.
With stocks, money markets and CD's lagging behind we still have an excellent investment tool right here at our fingertips!!!
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