Those that do rental properties

JMac03

Joined: May 13, 2010

Posts: 5,136

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9:24a, 8/10/18

Do you do them in the town you live in? Any of you invest in that stuff you hear on the radio "guaranteed 20% returns" where it sounds like you own a tiny piece of a ton of properties?

I think we are where we can/want to do some real estate investing, but in BCS I feel like the timing is horrible. Everywhere I look (and read on here), houses and apartments are sitting vacant because of over-saturation.

Is this a terrible time to start investing in real estate in BCS? (and maybe not today per se, but 6 months from now). Is it better to do houses not near campus or not high-end stuff near campus?

Lone Stranger

Joined: Sep 20, 2007

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3:56p, 8/10/18

BCS currently requires more effort and risk analysis with wider volatility of assumptions than it has over the past decade which is a challenge to those wanting to enter without experience. Nobody exactly knows where the rent softness will settle yet. Many larger well leveraged folks seem to be just content to ride it out as most BCS down cycles have been short lived. The sheer volume of non single family construction coming on line seems different this time for some of us though. Other more short term types are cashing out and looking for better opportunities in other geographic markets with more short term upside.

Concerns at the macro level that scare many existing folks about the BCS investment rental market:
-sheer volume of for lease and rent signs still up all around town at this point in the yearly lease cycle.
-large places offering rent softeners such as 1 or 2 months free or fully furnished when they used to be unfurnished.
-property taxes that are getting somewhat out of hand AND the COCS wants to shift 5% of property taxes for homestead exemptions to the "rental market" owners with the increased local homestead exemption.: (hard to pass on a property tax increase from the city in a soft rental market)
-Competition between older homes close to campus as rentals vs single family homes because much of the rest of the single family market went nuts and got really expensive.