Archive for December, 2014

Why Millenials May Change Your Cash Flow

said on December 30th, 2014 categorized under: Selling A Duplex

Comments Off on Why Millenials May Change Your Cash Flow

MILLENIALS | Concept WallpaperOdds are you’ve seen a lot of headlines about “The Millenials” lately. And if you’re anything like me, you’ve wondered why they’re such a big deal.

Well, if you’re a Minneapolis or St. Paul duplex or rental property owner, they should be a very big deal. They’re about to change your cash flow.

According to an article in the Minneapolis StarTribune, they are the young adults born in the 1980’s and 1990’s, whose population in Hennepin County alone has risen almost 25 percent the last seven years.

The reason? One of the lowest unemployment rates in the nation.

Lured by the prospect of employment, these 20 and 30-somethings have helped drive Twin Cities rental vacancy rates down, and rent up nearly 40 percent over the same stretch.

High rents and low vacancy rates have made duplex and investment property owners who otherwise may have moved on reluctant to sell. This has in turn, caused low inventory levels in the duplex, triplex and fourplex market; at a time when low interest rates have inspired many to buy.

When high demand meets low supply, prices go up. It’s been the best possible scenario for rental property owners.

However, according to a number of economoists those tenants are about to become homebuyers. In fact, acfcording to Realtor.com’s 2015 Housing Forecast, 42 percent of millenials say they want to buy a home in the next five years. In other words, they’re expected to drive two-thirds of the housing activity over that span of time.

Until now, millenials have largely stayed away from buying due to economic pressures, tighter lending standards, and a general desire to postpone major life changes like marriage and families.

With millennial family growth rising and an improving economy, the forecast is for more of them to become homebuyers.

And what this means to duplex owners is a rise in vacancy rates, rent decreases, and changes in resale value.

In other words, the days of ever escalating rent may be coming to an end, and we may once again be headed for promotional give aways (first month free, free cable, etc.) to attract tenants.

If you’ve been even remotely thinking about selling your Minneapolis or St. Paul duplex, this should set off alarm bells in your head.

Right now, Twin Cities investment property sellers don’t have a lot of competition in the marketplace. That means duplex sellers are getting premium prices, because buyers don’t have many choices.

That means it’s a great time to sell.

 

Comments Off on Minneapolis Passes Accessory Dwelling Unit Zoning Code Amendment

minneapolis allows accessory dwelling unitsThe Minneapolis City Council passed a zoning code amendment on December 5, 2014, which allows accessory dwelling units (ADUs) citywide on lots with single family homes or duplexes.

An ADU, which may also be called a “granny flat”, carriage house, or “mother-in-law apartment” is a self-contained living unit that can be located within the walls of an existing property, included in new construction, or put in an additional building on the property.

This should help provide seniors with a way to age in place, as well as gradually provide more housing units to the city over time.

 

Comments Off on Is Your Minneapolis Duplex Worth The Number You Want To Hear?

Minneapolis Duplex ValueIs the Realtor who tells you the highest price for your duplex the best agent for the job of selling it?

When it comes to getting a listing, some Realtors will tell you what you want to hear. They’s say your property is worth thousands of dollars more than the other agents, just to get the listing.

Then, when it sits on the market month after month, they will ask you for a price reduction. And by that time, the biggest wave of qualified buyers who are already in the market looking for property will have passed.

When it comes to selling your duplex, it’s important to remember Realtors do not determine the value of your property; the market does. A Realtor’s job is to help you interpret market data in order to price your duplex competitively.

That price will not be based on what you need or would like to have in your bank account after the sale is closed. It is based on comparable properties in your area that have recently sold.

Incidentally, these are the same sales an appraiser will use to substantiate or refute value when your buyer asks for a loan.

In other words, you and your Realtor are going to have to prove, scientifically, the property is worth what you think it is. And the only way to substantiate that is with data.