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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: kailuabruddah who wrote (27700)	3/3/2005 12:48:21 AM
From: renovator	Read Replies (2) \| Respond to of 306849

I have looked at Austin( my wife is from there and yearns to return when the NYC attitude gets too rude for her) and found that there are an enormous number of rentals and an all time high level of foreclosures in Travis Co. There is still holdover damage from the TechWreck a few years back. The pricing is reasonable to buy but the prospects for solid income production are not great. Unfortunately, the areas best positioned for the Capital or University rental market have experienced the most runup in pricing. We know a few people there with rentals but most are running their own businesses out of these properties and thereby gaining equity out of business rent payments to themselves. Nice deal if you need a business space there.

To: kailuabruddah who wrote (27700)	3/3/2005 8:00:55 AM
From: Amy J	Read Replies (1) \| Respond to of 306849

Kailuabruddah, Have relatives that have and had a number of investment properties in several areas of some of the cities you list. One was and is doing extremely well with his investments (and this was well before the bubble too), while the other one made only a positive return that was negligible after deducting taxes, time, and costs. Their strategies were the opposite from each other, so possibly there's a lesson here. The successful one, bought property in highly desirable areas, desirable not because they were trendy, but desirable because they were physically some of the closest apartment buildings to a destination a lot of people needed to be next to (a school), while the other one (in his unfortunate desire to invest only a small amount of money) bought one property in a location that was less desirable (thus less costly) as it was on the outskirt of town that required a bus ride for his tenants to/from school. He correctly recognized the area needed more apartments to facilitate the growing school - and he was correct on this but he wrongly misjudged developers desire to simply build more units on the outskirts of town. So tenants eventually had a choice between his older apartments or the brand new ones. His competition was fierce as a result. Meanwhile, the other relative was quite comfortable with his investments because there simply was no land, no vacant lots, nothing for any developer to build more next to the school. So, his properties drastically rose in appreciation well before the bubble even started, and he never had a supply problem with tenants because his location was extremely desirable. In a nutshell, location made all the difference in the world between huge profits and negligible profits - even within the same city. The successful investor also owned property in another one of the cities you mentioned, but again, he followed the same principle: he paid more money to buy property in a desirable location. The key here is to buy in a desirable location from the standpoint of a physical limitation and closeness proximity, not from the standpoint of trendiness. Trends come and go, but physical limits tend to stand the challenges of time. In many towns, the outskirts provide the fresh new buildings and so attract new growth, but outskirts so easily get diluted by new units due to unlimited sprawl. But what was tried and true for the successful investor was the more expensive investments next to desirable locations with the limitations of new buildings and desire for proximity. You pay for what you get. Regards, Amy J

To: kailuabruddah who wrote (27700)	3/3/2005 10:52:36 AM
From: Tradelite	Respond to of 306849

Interesting list of towns you posted. I'm quite familiar with a couple of the college towns you mentioned. Visit them regularly. In one of those towns, I was in charge of selling a deceased family member's home just a few years ago, so as a real estate broker not licensed in that state, I had to search for a Realtor to do the job. The house sold for all cash to a very rich parent of a university student who was looking for a place to live along with some of his friends. Had one Realtor and one close real-estate-investor-friend there try to talk me down on the listing price. I hired a second real estate agent who suggested the highest price and got more money than anyone expected, real fast. It was an ideal transaction all the way around. It's hard for students to find campus-accessible housing in that town, and if you find a rich parent who's willing to buy the place for all cash just to get housing for the kid (and keep him and his rowdy friends out of the parents' own home while he's in college)...you take the money and run.