|
|
|
|
Cash and the Balancing Act
Is now a good time to sell my apartment? Well, it has been a while since I have seen so much cash in the hands of investors buying properties. Tax deferred 1031 money dried up with the recession, but now it is back with a vengeance. Cash is a good thing when you are selling, or let me put that another way; getting a commercial loan can be time consuming, expensive and may cause brain damage. Cash makes a transaction quicker and easier. "But," you may ask, "with demand going up should I hold on to my property and sell later at a higher price?" Maybe/maybe not... the key here is interest rates. The current low interest rates have investors flocking to real estate because real estate is almost sure to yield higher than the 1% they can earn on a Certificate of Deposit. This trend will certainly see a shift when interest rates climb back up again. Also, the cost of new money if a loan is needed to acquire real estate will surely erode income from an apartment building, pushing prices down.
The graph below illustrates what is happening to prices in the city of Reno due to the above mentioned trends and shows an almost 10% gain in the median asking price per unit for multi-family properties compared to the prior 3 months, with an almost 38% increase compared to last year's prices!:
If you have contemplated selling your apartment building now may be the time, give me a call at (775) 762-5418 or email me. We will match you and the property you own with one of our cash buyers.
|
|
|
|
|
|
|
|
|
