Residential single-family real estate is reeling. The sub-prime crisis has hit and it has hit hard. While experts tell us the recession is technically over, many homeowners still struggle to keep the largest single source of wealth they possess, their home, from dropping into the abyss. There is still a popular notion that all real estate is a bad investment when nothing could be farther from the truth. True, single family home values are still dropping slightly (but no longer at the annual rates we witnessed in 2008 to 2010), but investment properties are stable and among this investment class many apartment properties are holding their value and some are even continuing to appreciate.
For investment real estate there has not been the spectacular fallout that has impacted other investment types, but for retail & office properties it has been challenging. By and large, retail properties are still retaining tenants while working harder to attract new ones. Rents are flat or discounted and will stay that way for the foreseeable future. Absorption is slow. The slowing economy puts pressure on American’s pocket books, they buy less, and retailers struggle, but most will tough it out. According to the Small Business Times, for March, 2011, retail vacancies for the Milwaukee metro area were 11.2% in the 4th quarter of 2010. This places these markets a bit on the high side for unrented space, but not too bad compared to more volatile national markets.
Office vacancies are high in most markets as well. The Milwaukee, Ozaukee & Waukesha office market has a 21.4% vacancy down slightly from the 4th quarter of 2010 at 22.3%. These are big numbers for a market that should stabilize at 6-7%. The absorption is strong in the western suburbs, but flat or negative in the downtown markets.
The real stellar performer in the midst of this mess is apartments. As more people lose their homes they become renters. Others who can no longer qualify for a mortgage will stay in the rental market. Demand for quality, professionally managed apartments has gotten stronger & stronger. Throughout the Milwaukee metropolitan market, vacancy rates for apartment properties range from 2.6% to a high of 6.4%, great numbers even in a flourishing economy. Owners of apartments may not be able to increase their rents much for a year or two, and they may experience a slight increase in rent defaults, but they will pay their taxes, their mortgage and continue to build wealth even in the worst of times. Historically real estate outperforms the Dow over time in real returns.
Since most of us experience apartment life at some point in our lives, it’s easy to understand what it takes to make an apartment appealing to renters. Maybe more importantly, managing apartments is straightforward; not requiring special skills or education. They provide people with decent places to live, and over time, they can make their owners rich.
Call Kevin Gleason @ 414-870-5363 to answer any questions you may have about investing in real estate or to discuss our apartment listings.
Apartments – An Investment Strategy For Today’s Troubled Times
56 Unit Apartment Complex – New London
Koltwood Apartments is the top of the market in New London, a growing, charming city of 7,000+ located at the confluence of the Wolf & Embarrass Rivers, within an easy commute of the Appleton Metropolitan Market Area. Located along the Embarrass River, the site is low-density with lots of green space and a nature area running to the river.
For more details contact -
Waiting For The Market To Rebound?
Everybody knows the bad news:
Stocks have plummeted; investors have lost 40-60% of their portfolio value. Billions in bailout money is hemorrhaging into failing banks and Wall Street. Where can you find a safe place to invest what’s left of your equity? You drive by it every day and never give it a second glance. Yet all the time it has been creating wealth for its owners. It moves up and down but always on an upward trajectory.
Use to be back in the day, it seemed like a pretty good deal to buy an apartment building and hold it for 10-20 years and then retire off it But then the stock market got interesting with the high tech boom of the nineties and led many to believe that you could get rich overnight. For a while it seemed to those clever (or just plain lucky) Wall Street investors that hitching their wagons to a rapidly spiking market was easy and would never end.
The Stock Market: everything went up! … and then it all went down! All the time real estate kept consistently increasing in value and making owners rich.
Now while the most recent crop of stock players has lost nearly half their equity in less than a year, those who stayed with investment real estate are for the most part, doing just fine. Anyone who bit off way more than they could chew, who flew way too high, too close to the sun, and borrowed like there was no tomorrow, their properties are in foreclosure. But for the vast majority of real estate investors, it is business as usual.
Don’t get me wrong, there’s a huge real estate crisis and values have fallen, but only a fraction as much as Wall Street (at least in Wisconsin). It’s single family homes for the most part that have been affected. Many of those people who lost their homes or can no longer qualify for a mortgage are where? They’re in apartments, paying rent to their landlord!
Here we are again, the aftermath of another stock market bubble bursting. And investment real estate is still going. So before you give what’s left of your nest-egg back to the Wall Street geniuses, give me a call & let me show you how apartment investing can work for you.
Maybe it’s Time to Get into Investment Real Estate!
Kevin Gleason – (414) 870-5363
Capital Gains: Now Is The Time To Review Long Term Strategies
Recent History of Changes in Federal Tax Laws – President George W. Bush signed a series of tax cuts into law. The largest was the “Economic Growth and Tax Relief Reconciliation Act of 2001”. It was estimated that it would save taxpayers $1.3 trillion over ten years, making it the third largest tax cut since World War II. The top four tax rates dropped from 28% to 25%; 31% to 28%; 36% to 33%; and 39.6% to 35% respectively.
The “Jobs and Growth Tax Relief and Reconciliation Act of 2003” accelerated the tax rate cuts that had been enacted in 2001, and temporarily reduced the federal tax rate on capital gains and dividends to 15%. Two tax bills signed in 2005 and 2006 extended through 2010 the favorable rates on capital gains.
Because it seems likely that the capital gains rate will go up no later than the end of 2010, now is a good time to review long term real estate investment strategies with your tax professional. It’s also important to remember that 1031 exchanges (also called Starker exchanges) do not avoid taxes, they only defer them into the future. So it’s even more important to review strategies if you are considering an exchange in the near future.
If you’d like to learn more about the history of income taxes in our country since 1791, here is the link an interesting article – http://www.infoplease.com/ipa/A0005921.html.
Some information above from Information Please® Database, © 2007 Pearson Education, Inc. “A History of Income Taxes in the United States”
Our Rock Solid Analytical Tools for Investors
Our rock solid analytical tools and methods are second to none!
Distressed Property Inspection and Cost Estimator – with 350+ inspection points, you can be sure we know what needs attention and how much it will cost. Partner with us or purchase and rehab on your own – we can give you confidence in the financial reward potential of your properties.
Investment Property Analyzer – a scenario based analytical tool that illustrates a property’s financial dynamics, helping to determine its viability and optimum purchase price and terms; great for both income and rehab properties
Appreciation Calendar – property value change from any year to any other year (1995 to present)
Investment Property Values to Interest Rates Chart – How the present interest rates affect the value of properties you want to buy or sell
Real Estate Investment Counseling – unique counseling for our buyer clients not provided by many other realtors or offered on a fee basis as an independant, professional unbiased third party in decision making.
Creating Wealth Through Real Estate Investing
My name is Kevin Gleason. I have been a commercial real estate broker since 1986. Over that time I have sold numerous commercial properties, encompassing apartments, shopping centers, office buildings and single-tenant net-leased properties. The clients and customers I have served have two things in common:
They have all built wealth through investing in real estate
and not one of them did it over night.
Typically they started out with a small property, say a four family apartment. After a few years, as the property appreciated, they refinanced and pulled cash out and used it to buy another. Thus began a pattern of investing that over ten to twenty years built a portfolio of properties worth millions.
Some were hands-on and on a part-time basis or with a spouse or partner managed the properties themselves. This for the most part consisted of renting apartments to qualified tenants, providing those tenants with a quality residence and collecting rent checks every month. Simple bookkeeping, consisting of bill paying and record keeping took a couple hours a month. On occasion they might paint an apartment or cut the grass or plant flowers. They could enhance the attractiveness of their property in whatever way they chose, and the benefit was attracting better tenants, increasing the rent more often, and controlling to a large extent their wealth creation.
Other investors hire a management company to perform those tasks for a fee based on the total collected rent. The more rental income the manager generates, the greater their fee. This arrangement provides an incentive for them to keep the property full. Either approach takes the investor to the same place – financial security, and over time, a valuable portfolio of real estate.
This approach to becoming rich hasn’t changed since I started in this business. It goes on everyday, everywhere, and creates the same result:
Slow and steady wins this race, and careful and responsible investing in real property will never let you down.
Call me if you are thinking about embarking on the slow boat to wealth creation known as real estate investment. All you need is access to credit, a work ethic and the patience to see it through.
Kevin Gleason
Realty Dynamics
(414) 870-5363
kevin@realty-dynamics.com
Real Estate Solution Group – More Than “We Buy Houses”
Are you in a position where you need to sell your house? Facing foreclosure, going through a divorce, transferring jobs, lost income or making mortgage payments on a vacant property? Whatever your circumstances we may be able to help … you may not have to make another payment on that house you no longer want.
Call us in complete confidence – expect straight talk and honest information; not sale’s shmooze!!
We know that for many people facing the loss of a home can be a very tough problem. Sometimes we can help! Yes, we do buy houses too at times, but we think you’ll agree that we offer solutions, not high pressure or sugar coating when you’re confronted with a difficult situation!
Click here to get more information on selling your home fast
