Boomers Booming According to Census 2010
By Chris Hagan of Statesman Journal
…..The new numbers also showed Oregon to be a popular destination for renters, with the third-lowest rental vacancy rate in the nation at 6.5, a nearly 11 percent drop from 2000. Salem and Marion County sat at 6.7 percent.
New York had the lowest rental vacancy rate at 5.5 with California second at 6.3 percent. The national rate was 9.2 percent.
“There hasn’t been any new construction (of new rentals),” said Shirley Layne, a certified general appraiser with Powell Valuation. “Our supply is low and our demand is high.”
Layne said that Mid-Valley builders typically wait until the apartment vacancy rate gets below 5 percent before building.
A Powell survey for Salem-Keizer found a vacancy rate of 5.88 percent in the first quarter of 2011.
Beyond the vacancy rate, Layne said the Salem area lacks land suitable for apartment buildings. “Land is pretty scarce around Salem,” Layne said. “(Builders are) looking and shopping, but they’re not going to do anything until that vacancy rate gets down.”
Coupled with that, Oregon had one of the lowest home ownership rates in the nation at 62.2 percent, seventh-lowest among states.
Jamie Martinson, a senior adviser with Sperry Van Ness Commercial Advisors, said the home ownership rate was a reflection of high home prices coupled with low wage growth in the state.
The Salem area ranks 117th nationally in the National Home Builders Association’s Housing Affordability Index, the best of the Oregon cities included in the survey.
“The combination of higher cost housing with lower wages, that’s why we rank where we rank,” Martinson said.
We had a meeting with some experienced investor friends last week. These were some of the people that I know had a great business sense, but got caught in the downturn of the market. Some of them lost everything: all their rental portfolios as well as their personal homes. Yet when asked if they were OK and still interested in real estate investing, they stated without hesitation – YES!
They know that real estate investing is still the best way to make long term money and true wealth. They stated that they were just going to have to do things differently in the future.
Here are some investing tips that Mark and I want to share with those of you either interested in getting into rental real estate or for the pros that just need a little refresher.
1- You make your money when you buy the property. If you purchase the property for too much money, it is almost impossible to recoup your investment.
2- Know your exit strategy. What do you want to do with the property? Rent it? Sell it for a profit either through wholesale or retail? The answer to this question will then help you determine your numbers and your financing strategy.
3- If you are going to sell for a profit – know your market! We are still in a buyer’s market. Your home needs to be priced aggressively so that you can compete with the other sellers in your market.
4- If you are going to rent it out – know your market! Use a professional property management company to work with you to determine the popular rental areas and the best rental prices. Solid Source Property Management has a team of agents that helps investors find properties in great areas to make sure that the investment is solid. Also, we provide an incentive for management when we help with the purchase.
5- If you are going to buy a foreclosure or short sale to sell, don’t over-rehab it because you want a project. I see this over and over again. The investor takes too much time and over improves will lose money every time. You can never recover from long buy, sell & hold costs, nor will improving a property beyond what the comps will support.
