Local landlords enjoyed another year of strong rent growth, and occupancy levels that surpassed national trends in 2013. Dyer Sheehan Group’s January 2014 Ventura County Apartment Market Survey indicated a countywide vacancy rate of 3 percent, better than the national average of 5 percent, and in line with the tightest rental markets in the U.S. The Ventura County overall average rent in January 2014 was $1,536 ($1.79 per sq. ft.), for all unit types and cities combined. Countywide rent appreciation for the year was 4.7 percent, ranking the region in the top ten Metropolitan Statistical Areas in the country and well above the national rent growth for the year, which slowed to 2.8 percent.
Apartment fundamentals continued to strengthen during 2013, sustaining the momentum that has been building since 2009. Ventura County apartment (5+ Unit) investment activity grew sharply with nearly $300 million in total sales volume and 27 closed transactions in 2013; up 35 percent from the 20 sales in 2012. In 2009, there were only nine transactions all year. Year-end average sales price per unit appreciated 7.5 percent from $144,768 in 2012, to $155,647 in 2013. Several larger institutional sales in the county drove the average sales price down to $193-sq.-ft. from the 2012 average of $196-sq.-ft.
Increased investor demand, coupled with low mortgage interest rates, led to compression in cap rates from 6.16 percent in August 2012, to an average of 5.45 percent for sales closed by mid-August 2013. However, sales volume was somewhat moderated by seller price expectations. We continue to see properties being offered for sale at cap rates well below threshold returns targeted by savvy buyers. Cap rates typically vary based on the age, condition and location of the property. Ventura County sales ranged from a 3.9 percent cap rate for a beach-neighborhood property, to 7.4 percent for an older collection of duplexes and bungalows that needed work. Eighty percent of the properties traded at cap rates of 5 percent or more. Read More
Renter demand continues to grow, buoyed by modest improvements in the local economy and employment and demographic trends. Increased consumer confidence led to additional household formation, although at a slower pace than would typically occur in a more robust economy. While the apartment rental market is expected to remain strong, competition from newly-constructed units and from the shadow market of investor-acquired condos and homes may lead to slightly slower rent appreciation in the coming year. Read More
A host of experts now assert that burning fossil fuels, deforestation and other actions have produced a man-made layer of carbon dioxide and other heat-trapping gases that allow rays of the sun to penetrate the earth’s atmosphere but do not allow excess heat to escape, causing global temperatures to rise, glaciers to melt and increased environmental concerns around the world.
Top 10 Multi-Family Investment Mistakes Dawn Dyer
Experts agree that multi-family properties offer great investment potential. Demographic, economic and other factors will increase demand for apartments over the coming decade while the supply of new units in many areas will continue to be limited, especially in high barrier-to-entry locations like coastal Southern California where growth controls and other land-use policies restrict new construction.
Section 1031 of the United States Internal Revenue Code provides a method for owners of real property used in a trade or businesses or held for investment to defer capital gains taxes that would otherwise be due upon the sale of property.
At the most recent Apartment Investor Academy Meeting (Maximizing Your Building’s Potential in May 2010), we explored ways to enhance the value of an apartment building once buyers take ownership.
