Archive for May, 2017

Minneapolis Tops The Nation In Rental Demand

said on May 26th, 2017 categorized under: Twin Cities Real Est

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We may not win Super Bowls or Stanley Cups in the Twin Cities, but we are tops in one very important number.

The Minneapolis-St Paul metro has the tightest vacancy rate of any major city in the U.S. according to the national multifamily housing consulting firm Witten Advisors.

According to a story in the Star Tribune, demand exceeds supply. To solve that, at the start of 2017 there were 8,440 units under construction, with another 31,752 in the planning stages.

This is good news, of course, if you’re a duplex owner in the Twin Cities. After all, lower vacancy rates mean higher rent.

So where are all of these tenants coming from?

According to Ryan Davis, senior economist for Witten Advisors, half of the growth in the rental market in the last seven years has come from renters age 55 and older, and 40 percent of the growth has come from renters who make $75,000 or more a year.

Matt Rauenhorst is vice president of Opus Development Co., an active developer of multifamily properties in the Twin Cites. In Opus’ higher end developments, he says residents are willing to pay more in exchange for “condo-like finishes”.

As more new construction multifamily properties come into the market, smaller property owners may eventually find the need to update properties to stay competitive at higher rent points.

For now, however, demand continues to exceed supply. It’s a great time to be a landlord in the Twin Cities.

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Duplex Chick and Dad

On May 3, 2017, my father died following a 9 month battle with pancreatic cancer.

On the surface, that doesn’t seem to have much to do with duplexes, investment property, real estate, or this blog.

But this blog wouldn’t have been possible without my dad.

You see, throughout my childhood, my dad had a sign on his desk that read “Happiness is a positive cash flow”.

The terms “cash flow” and “cap rate” were heard as often when I was growing up as “eat your vegetables” or “good job”. They have, quite simply, been part of the soundtrack of my life.

While today I do speak the language of investment property, it is nonetheless daunting to suddenly be charged with understanding someone else’s real estate portfolio; especially when it involves larger commercial property that may share many of the principles of multi-family investing, but not all of the same language.

If you’re thinking about investing in real estate, or have already started, I’ve now come to realize how important it is to have all of the information someone would need to run your properties centralized; from a list of service people, to loan numbers, balloon payments, tenant contact information and leases.

The one gift of a terminal diagnosis is we got a little bit of time to prepare for this transition. Even so, it’s a challenge to understand it all.

Helping your loved ones by sharing as much information as you can is one of the easiest ways you can make sure your investment is the blessing for them you intended it to be. And it’s never too early, or too late to get started.