South Lake Tahoe Investment Properties-For Sale
The time may be at hand for smart and savvy investors to make the move back into Lake Tahoe investment property. Prices are now at a point where the rent/purchase price may make serious economic sense.
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With “cap rates” averaging in the 7-11 range the numbers begin to work with respect to a positive cash flow perspective. There are still sellers…banks included….who have not “seen the light” as of yet but as the market begins to reflect where cap rates should be and where the investor/purchaser is heading then the trend should be for all future listed properties to see the “correct valuations” attached to them.
Indeed, finding a property not currently under contract with a cap rate between 8-12 is becoming somewhat difficult as well-informed investors are back in the Lake Tahoe real estate market in a Big way and making their presence known with sales of multi-family properties jumping substantially the past 12-18 months.
Should the average investor start looking into the multi-family real estate market at Lake Tahoe? If you are one who enjoys a solid return (ROI) on your invested dollar then by all means take a peek. When looking at “cap rates” remember that that number generally reflects the return on the invested dollar for that particular property so if we are looking at a cap rate on a property of 10 then the ROI is around 10% on that investment.
Remember that the cap rate is a function of a concise and complete accounting of all expenses associated with the property so never take a cap rate provided by the owner or real estate agent as gospel…it probably is wrong. Not that owners and agents are stupid…just usually uniformed as to what really is involved with coming up with the actual and true valuation via the cap rate. Do your own due diligence and take into account all expenses for that property including taxes, insurance, vacancy, utilities, management, annual maintenance etc. When you have the correct net operating income (NOI) number in front of you then the cap rate calculator will assist in getting you the proper cap rate for that property.
If you do your homework, team up with a smart and savvy Realtor and really hit the pavement then you will be rewarded in the near future with one or more properties that fit the bill to move you forward financially. Stick with it and good luck!
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