K. David Meit, CPM®, is the President and CEO of Oculus Realty. With approximately 25 years of experience managing all classes of multifamily properties, David is an expert in everything real estate, from financing, marketing and leasing, to real estate investment, operations and renovations. David is also a past president of the Property Management Association (PMA). His interview below provides invaluable advice to property managers and owners.
A widely accepted economic fact is that something is worth what someone is willing to pay for it. That holds true whether the item in question is a signed baseball, a new car, or a dinner at a restaurant. It also applies to real estate. When you decide to price a piece of property for sale, what you paid for it, how much you owe on it, what you’ve invested in it, what you’d like to get for it, or what you think it’s worth is irrelevant.
Interest rates are still at historic lows and property values continue to be depressed. However, recent actions of the Fed and growing seller demand appear to be forcing an increase in both. Those trends might not be reversing any time soon, so now might be the right time to invest in another rental property.
It’s a tired cliché, but it happens to be true. If you fail to plan, you’re planning to fail. Running your business is difficult. You’re being pulled in many directions and there aren’t enough hours in the day to get it all done. Unfortunately, that doesn’t let you off the hook when it comes to planning. You need to have a documented property management business plan if you want to be successful.
When the housing bubble burst, millions of people were pushed from their homes, flooding the rental market. As a result, rents have been rising steadily and are up 4% in 2013 alone. In addition, some economists estimate the yield on rental properties is 6%, triple the 2% you get on ten-year treasuries. It’s no surprise then that investors are looking to obtain more rental units.