U.S Experts forsee ongoing success for buy to let investors

Real Estate Experts offer 2012 forecasts for commercial property that stretch from deep worry about the availability of financing to near giddiness over the robust health of multifamily housing.

The range of views could be seen clearly at the annual Commercial Property Forecast Summit, hosted by the Realtors’ Commercial Council at Germantown Performing Arts Theatre.

Speakers addressed office, industrial, retail, multifamily, land and financing.

No one had happier news than Eric Bolton, CEO and chairman of MAA, the Memphis-based real estate investment trust that invests exclusively in multifamily housing.

What with housing loans tougher to acquire, student loan debt growing more oppressive, and twenty-somethings waiting longer to marry and start a family, the demand for apartment living is climbing, Bolton said.

“There’s no market I’m aware of in the country where rents are going down,” he said.

Investors noticed and participated in three times as many apartment-buying transactions in 2011 as they did in 2010, including $230 million worth in Memphis alone.

“America is rethinking how it meets its housing needs,” Bolton said.

Over the decades, about 64 percent of households owned their own homes and 35 percent rented. Ownership peaked in the mid-2000s at 69 percent, and is now 66 percent and dropping.

Bolton foresees the portion falling to about 60 percent.

The biggest age bracket for renters is 18-35, and there are 21 million more Americans in that group than in the 36-50 age range.

The supply of apartments won’t keep up with demand, meaning rent and occupancy rates should keep growing for investors, he said.

Clearly this is great news for overseas investors. yet again indicating that although the economy is slowly recovering and the real estate landscape is changing, now is the time to invest while property prices are low and demand for rental property is high.

The changing face of the American dream…

Home ownership used to be part and parcel of the American dream but this is no longer the case. The American dream has found a new direction that according to experts, is here to stay for the foreseeable future. In a slow recovering economy property sales have plummeted and it seems renting is the way forward.

The American real estate market has suffered greatly over recent years and with employment higher than ever and credit agencies still unwilling to lend, buying a property is no longer an attractive prospect or sometimes even an option for those looking to settle. People are understandably cautious about the future and are either choosing not to buy in a distressed market or simply cannot get a mortgage. The rental market in the majority of cities has recently taken a dramatic new direction as more and more people are choosing to rent on a long term basis.

Trulia.com previously released a list of the top ten American cities with the largest increases in rentals by comparing change from the third to the fourth quarters of 2010. Additional data, including unemployment, median incomes, home values and rents is from City-data.com.

San Diego-Carlsbad-San Marcos, CA
Rise in renters: +5%

San Diego statistics:
Median income: $59,901
Unemployment: 10.1%
Median house or condo value: $445,500
Median rent: $1,242

The vacancy rate for rental apartments in San Diego went down to 4.6 percent in the last quarter of 2010, from 5.0 percent the previous year, according to data from the property research company Reis. Home prices in the San Diego metro area are expected to rise 3.5% this year, according to a forecast from Real Estate Solutions.

Memphis, TN-AR-MS
Rise in renters: +6%

Memphis statistics:
Median income: $34,203
Unemployment: 10.2%
Median house or condo value: $ 101,400
Median rent: $745

Many rental properties in Memphis are owned by out-of-towners, says Jim Reddy of Memphis Investment Properties, in an article in the Memphis Daily News. He puts his own company’s extra-Memphis owners at about 80 percent, including investors from New Zealand and Australia. The article also notes that in January the average home in Shelby County sold for $50,000 or less.

Charlotte-Gastonia-Concord, NC-SC
Rise in renters: +6%

Charlotte statistics:
Median income: $49,779
Unemployment: 8.7%
Median house or condo value: $175,600
Median rent: $811

It’s a good time for investors in rental properties and not so good for renters in Charlotte, because increased occupancy in rentals means fewer enticements, higher rents, and possibly even shortages, The Charlotte Observer reported last month.

New Orleans-Metairie-Kenner, LA
Rise in renters: +6%

New Orleans statistics:
Median income: $36,468
Unemployment: 9.1%
Median house or condo value: $192,600
Median rent: $882

The picture painted by the Department of Housing and Urban Development is not a bright one. Median rent has increased since Katrina—from $662 to $882 (adjusted for inflation). Supply of available, intact rentals plummeted after the storm, so perhaps this increase in rentals is a good sign for a troubled city.

Worcester, MA
Rise in renters: +6%

Worcester statistics:
Median income: $47,415
Unemployment: 9.5%
Median house or condo value: $230,100
Median rent: $833

When single-family homes won’t sell for significantly less than their purchase price, many owners turn to renting them out, notes the Worcester Business Journal. The renters of these homes, in turn, are those reluctant to enter this home-buying market, and the high-end rental market has seen an uptick as well

Columbia, SC
Rise in renters: +8%

Columbia statistics:
Median income: $38,807
Unemployment: 15.2%
Median house or condo value: $165,700
Median rent: $756

The Columbia housing market continues to “remain in hibernation” until the third quarter of this year, according to studies by Fiserv and Moody’s Economy.com cited in a report by The Mather Company. Prices are expected to drop before possibly stabilizing by year’s end.

Syracuse, NY
Rise in renters: +9%

Syracuse statistics:
Median income: $30,075
Unemployment: 9%
Median house or condo value: $84,400
Median rent: $668

It’s the same old story you’ve heard in other cities: buyers are reluctant to risk buying in Syracuse, and New York’s loss of residence is being felt in this city, which has more than the usual amount of vacancies, says Housing Predictor.

Bakersfield, CA
Rise in renters: +10%

Bakersfield statistics:
Median income: $52,677
Unemployment: 11.5%
Median house or condo value: $196,300
Median rent: $919

Houses are being built in Bakersfield, and perhaps they’ll even be owned by their occupants: Kern County had the most housing starts in 2010 of the Central Valley markets, reported Bakersfield Economic and Community Development. In addition, the U.S. Department of Housing and Urban Development forecasts: “Increasing population and a slowdown in the shift to homeownership are expected to support the demand for 2,400 new market-rate rental units during the next 3 years.”

Greensboro-High Point, NC
Rise in renters: +11%

Greensboro statistics:
Median income: $38,694
Unemployment: 9.6%
Median house or condo value: $143,800
Median rent: $714

The number of homes for sale in Greensboro has decreased by 12% from a year ago, and the number of newly listed homes is down by 22%, according to the Greensboro Home Market Report.

Toledo, OH
Rise in renters: +16%

Toledo statistics:
Median income: $32,325
Unemployment: 11%
Median house or condo value: $92,900
Median rent: $602

Rents are up and vacancies down—so goes the by-now familiar report from The Blade in Toledo, Ohio. Vacancy rates are down at year’s end to 7.7% from 10 earlier last year. This is attributed to the region’s high foreclosure rate.

This is all great news for those wishing to invest in rental property in the U.S. Low property prices, reluctance to buy, higher demand for rental properties and higher rents in most cities means that the face of the real estate market is changing for the better for smart investors. Don’t miss out!

properties in Detroit see 8.8% price increase

International investors looking to enter the American property market will already know that pre-tenanted properties are one of the most stable choice when looking for a hassle-free investments.
Our buyers are just now discovering that buy-to-let properties in Detroit are a popular choice due to their strong capital appreciation and high rental yields.

According to the Detroit Free Press, both house sales and median prices of property in Detroit saw an increase in September due to increased sales activity throughout the summer months.

As experts in Detroit property investments it has come as no surprise to us at USA Property Investor that the popularity of pre-tenanted properties in Detroit is on the rise and this success is not exclusive to us. The Detroit Free Press also reported an 8.2% rise in sales from 4,222 to 4,568 in September, with median prices rising by 10% from $68,000 last month to $74,900 across Metro Detroit. In Wayne County alone, property sales increased by 1.6% from 1,776 to 1,804 in September. Median sales prices were also up 8.8% from $40,000 to $43,500.

These figures are really positive and prove that now is the right time for investors looking to enter buy-to-let property investments to start searching for the right property.

We believe that location is one of the most important factors when purchasing a property in Detroit, especially if you’re looking to rent it out. That’s why here at USA Property Investor we carefully pick the best properties, in the best neighbourhoods to ensure that our investors get the most out of their purchase.

With finance available and discounts for cash buyers on a variety of pre-tenanted houses in Detroit, USA Property Investor have a range of houses in popular areas in the city. For more details about buy-to-let property investment please contact us on Tel: +44 (0)845 438 0634 Tel: +44 (0)1253 820 905

Strong demand for properties in Detroit sparks bidding wars

Despite the fact that the housing market has been flooded since 2006, finding a refurbished, ready-to-move-in property in Detroit has proven hard for both buyers and renters.

This increasing demand for refurbished properties in Detroit has sparked bidding wars among house hunters, especially for those looking for quality homes in decent neighbourhoods.

Most House hunters are faced with a market dominated by trashed foreclosed homes or homes that are owned by people who simply could not afford repairs or updates during times of recession. Most home owners are reluctant to put quality houses on the market if there mortgages are underwater and are waiting for higher prices to return.

“As soon as anything hits the market, it’s a stampede to get there,” Andy Hargreaves from Plymouth Realtor commented. “It’s not uncommon for us to see five to eight offers on a good home.”

Property sales in Detroit have seen a 1.2% annual gain throughout July, with a strong demand in the summer months according to the S&P/Case-Shiller home price indices. Despite this, the number of homes for sale in Detroit dropped nearly 29% in July from the same time last year, according to data from Realtor.com.

What’s more, most purchased properties in Detroit were bought faster than the national average. In July the median age of inventory in metro Detroit was 67 days compared with 97 days nationally.

Over the last year the property market in Detroit has also seen a tightened supply of properties in the tri-county area. Oakland County had a 5.7-month supply at the end of June compared with a 6.8-month supply in June 2010.

In Wayne County, there was a 6-month supply of homes in June 2010, which fell to a 5.5-month supply a year later.

In a normal market has 3-6 months – anything over 6 months is a buyer’s market, and less than 3 months is a seller’s market.

These factors have contributed to what property experts have named a ‘bidding war’ for ready-to-move-in properties in Detroit.

Buy-to-let properties in Detroit have become a popular option for investors looking for strong rental yields and potential capital appreciation. Working with property specialists, investors can purchase refurbished houses through professional management companies who offer pre-tenanted options for an instant income.

With tenancies in place for 12 months – and most tenants looking for long terms lets due to lack of available, quality housing – this is a hassle-free way for purchasers to generate income from the property market in Detroit.