Investing
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How To Find Multi Family Properties To Purchase In and Around Harrisonburg |
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 Multi Family Properties can be a means to more quickly and simply make a larger investment purchase. Whether it is a duplex, triplex, quad, or a small apartment building, you will often be able to purchase these properties at a lower price per unit, and more quickly increase your total rental income as compared to purchasing one individual property at a time. HOWEVER - there are very few multi-family properties that are offered for sale in Harrisonburg and Rockingham County. A few tools for you if you are potentially interested in purchasing a multi-family property in this area. This one has been around for a bit.... Current Multi-Family Listings - bookmark this page on HarrisonburgInvestmentProperties.com to come back and review current multi-family listings at any time. This is the new one.... Email Alerts for New Multi-Family Listings - sign up to receive an email alert every time a new multi-family property is listed for sale in Harrisonburg or Rockingham County via the HRAR MLS. Enjoy -- and let me know if you have questions about multi-family properties, or real estate investing in general. | |
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Should You List Your Rental Property For Sale For One Month Between Tenants? |
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 Depending on your short and long term financial goals - yes, it may be an excellent idea in the current market to do just that - list your rental property for sale for one month between tenants... In a recent conversation with the owner of a rental property, they were reflecting on the fact that after a tenant recently vacated their rental property (a townhouse) they were making quite a few updates and improvements to the townhouse based on some aging components and finishes in the property. They realized that the townhouse would be in better shape than it had been for years -- and that the condition would likely start to deteriorate (even if just a bit) as soon as they moved tenants back in. So, they wondered whether they should go ahead and just sell the townhouse instead of renting it again -- since it would be in great shape. But they lamented the fact that they'd need to keep it off the rental market for several months to see if it would sell at a price that would suit their financial goals - in other words, a sales price whereby it would make more sense for them to sell it than to continue to rent it. Here are a few thoughts I shared with this owner of an investment property...
So - here's an idea, if you own an investment property and you are about to have a tenant move out and you are about to make some improvements to the townhouse... Move the tenant out. Make the improvements. List the townhouse for sale for one month at a price for which you'd be happy to sell instead of continuing to rent the property -- so long as that value is generally in line with recent sales prices for similar townhouses. With this concept you don't have to commit to listing the property for six months, missing out on rental income, etc. -- but you can quickly determine if you could sell the townhouse while it is at its peak (from a condition perspective) at a price that would make it worthwhile for you to do so. OK - that was a lot. I'd be happy to talk it all through with you as well - in person, by email, by phone, etc. If you own a rental property and *might* want to sell it soon - be in touch (scott@hhtdy.com or 540-578-0102) and let's talk strategy... | |
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Risk and Reward in Buying College Student Housing Rental Properties |
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 If you are looking to purchase a rental property for your JMU student to live in while they are a student at JMU, there are two basic paths you could go down....
Option 1 -- A property in a traditional student housing neighborhood. These will allow the most students to live in the property and will maximize the rental income per dollar spent on the purchase. However, it will also expose you to a more turbulent segment of the market, as rental rates and sales prices of these properties can vary quite a bit over time as the supply of competing student housing ebbs and flows based on large complexes being built by student housing developers. You can find purchase options in this category here. Option 2 -- A townhouse in a community that has many owner occupants, some non-student renters and some student renters. Many of these will not allow as many unrelated students to live in the property (per zoning regulation or restrictive covenant) and will not provide quite as much rental income per dollar spent on the purchase price. However, they will be in segment of the real estate market that is much more predictable and less volatile from a rental rate and/or sales price perspective. You can find purchase options in this category here and here. I work with parents of JMU students each year who go down each path outlined above, each for different reasons. Most of the time, though, it boils down to their tolerance for risk or their desire for reward. It can also be related to their intended time horizon for owning the property. If you are interested in buying a rental property for your son or daughter to live in while they are at student at JMU, let me know. Oh, and you might also want to read up here... | |
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How To Strengthen Your Low Offer Without Paying More |
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 If you are making a low offer, you can increase the appeal of your offer by strengthening your other offering terms.... DEPOSITS Make the largest deposit you are comfortable with so the seller knows you have money "on the line" and that you won't risk losing that money by attempting to walk away from the deal. CLOSING COST ASSISTANCE Sellers don't just look at the contract price --- they calculate their net proceeds based on the offer price and any credits or closing cost assistance. Only ask for assistance if you truly need it. FINANCING Provide as much detail as possible about your financing intentions, and always include a pre-approval letter. Sellers who believe you are capable of financing the purchase will be less hesitant as they consider other terms of your offer. And yes -- offer cash, a large pile of it, if you are able. :) PERSONAL PROPERTY Don't automatically ask for everything the seller intends to convey --- if you don't need them all, leave them out of the offer. Allowing the seller to keep their washer/dryer (for example) may make them more flexible in other areas. INSPECTIONS Having a professional inspect the property you are purchasing is usually a good idea; however if you only intend to do it for informational purposes, consider leaving it out of the contract negotiations and conducting it post-settlement. SETTLEMENT & POSSESSION If possible, cater your settlement date and the details of transferring possession of the property to the needs or wants of the seller. This can go a long way towards gaining seller flexibility on other contract terms. Finally, research the seller's context for selling. That information can be invaluable in negotiating a successful contract. | |
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First Three Short Term Rentals Approved in Harrisonburg |
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 The City of Harrisonburg now regulates short term rentals -- and the first wave of applications have now made their way through the review process (City Staff, Planning Commission, City Council) and three properties have been approved by the City as short term rentals:
As context:
You can read more about this topic as follows...
As per the last article above... "All three permits were approved with conditions, including that the properties be the primary residence of the owner-operator, the owner-operator be present while renting out the space, and the owner-operator file a form guaranteeing that the "accommodation spaces" meet certain safety requirements, such as a door or window for immediate emergency exit to the outside." There are a pile of additional applications that will be reviewed over the next few months as we move towards August 1 when the enforcement of this new Short-Term Rental ordinance begins. | |
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Why Sell A Rental Property? |
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 If you own a rental property, you might wonder from time to time whether you should keep or sell that property. I generally advise my clients to keep their rental properties, and not to sell them unless there is a good reason to do so. Here are some of those good reasons... VALUE - If the value of your rental property is currently high, and there is a reasonable chance that it won't be quite as high in the coming years, then now could be a good time to sell the rental property. INVENTORY - If there are very few competing properties for sale right now (which would lead to a speedy sale) but there will be many, many new properties built in the near future (which could result in a slow sale) then it might make sense to sell the rental property now vs. later. EQUITY - If you have owned the property for a decent period of time you may have a good bit of equity tied up in the property - and perhaps you'd like to do something else with that money. Maybe you'll use the sale proceeds for another investment (real estate or otherwise) or to pay off some debt, make a large purchase, go on a trip, who knows, but sometimes selling a rental property is a key part of freeing up some cash to make some other financial moves. HASSLE - Maybe you are tired of dealing with owning a rental property. Regardless of whether you manage the property yourself, or have a professional property manager, there can still be some annoying details to attend to with property maintenance, uncooperative tenants, etc. MAINTENANCE - Perhaps your rental property is 20 years old and you're pretty sure that if you keep it for another 3 - 5 years you'll have to pay for a new roof, new heating system and new water heater. If so, it might make sense to sell the property now to avoid those major capital expenses. TENANTS - If most of the prospective buyers for your rental property will be owner occupants, then the time between tenants might be the perfect time to sell your rental property. PARTNERS - If you purchased the rental property with a friend or family member, and they would like to move their investment dollars elsewhere, then it might be a good time to sell the property. RENTAL RATES - If rental rates are starting to decline, changing the performance of your investment, it might make sense to go ahead and sell, unless you see a turn around happening in the near future. IMPROVEMENTS - Perhaps your most recent tenant absolutely trashed the property, and you have just completely renovated it, such that the property has never looked better. This could be an ideal time to sell before the condition starts to deteriorate again. All of these potential reasons to sell are quite general - so feel free to touch base if you want to chat more specifically about your rental property and whether it would make sense to sell it now, or keep it for the next few years. | |
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Selling A Property Occupied By A Tenant |
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 Do you own a property in Harrisonburg occupied by a tenant? When you are ready to sell it, how will you go about that process? Will you list the property for sale while the tenant is still living in the property?
Will you list the property for sale after the tenant has moved out?
OK -- admittedly, I'm spelling out the worst case scenario of both sides of this issue -- hopefully making it clear(er) that there is no sure-fire easier, faster, better way to sell an investment property. There can be challenges in listing the property for sale while the tenant is still occupying the property, and likewise, if you list the property for sale after they move out. We'll need to work together to determine the best game plan for your property, perhaps considering...
It doesn't have to be difficult to sell a property occupied by a tenant, but we'll want to approach the process thoughtfully. Let me know if you're planning to sell an investment property in 2019. | |
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Is Overbuilding Occurring In Harrisonburg That Will Affect Buyers Of Investment Properties |
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 I am working with several real estate investors who are considering the purchase of townhouses in the $140K - $170K price range that they would intend to rent to young professionals / recent college graduates / young families, etc. A reasonable question for a thoughtful investor considering this type of purchase is whether our market is being overbuilt such that they may have difficulty renting their investment property in the future (higher vacancy) or that they may not be able to maintain their rental rate in the future. I do not believe that type of overbuilding is currently happening in our market -- though it could certainly happen in the future. But let's explore it together... Most of what one would see being built in Harrisonburg right now is either student housing or high end rentals -- and I don't believe either of these draws in the potential tenants described above -- and thus this construction would not negatively impact the investors purchasing the type of property described above. Student Housing - We continue to see more and more of this being built in our market. Young professionals are certainly not going to rent in a student housing complex -- and historically, when student housing supply has exceeded demand, the oldest and least desirable complexes have seen the biggest swings in vacancy rates (up) and rental rates (down) -- which again is not going to draw in the potential tenants we are discussing above. High End Rentals - The most obvious spot where these are being built is at The Reserve at Stone Port, though others are also planned at Preston Lake. These are apartments (instead of townhouses as discussed above) and the rental rates are much higher (for the amount of leased space) than our target tenant population would be finding in a townhouse. Again, I don't think these draw potential tenants away from the type of property that my investor clients are considering. Now -- even if the majority of what is currently being built is not likely to have a negative impact on the buyers of investment properties -- that's not to say that some other near-term construction would not have an impact. If a developer/builder started building (100) townhouses with 1400 SF, 2 or 3 bedrooms, 2 full bathrooms and intended to rent them for $950 - $1100 per month, that could impact the investment market I am describing. If a developer/building started building (100) townhouses with 1400 SF, 2 or 3 bedrooms, 2 full bathrooms and intended to sell them for $150K - $170K, that could impact the investment market I am describing. Neither of these types of developments are currently underway, though they are certainly both theoretically possible. So - given all of the above, it would seem to be a reasonable time to buy an investment property in that $140K - $160K price range, as I do not believe current inventory levels or new construction trends (for sale or for rent) are negatively impacting the buyers of these types of investment properties. | |
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Risk, Reward and Buying College Student Housing Rental Properties |
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 If you are looking to purchase a rental property for your JMU student to live in while they are a student at JMU, there are two basic paths you could go down.... Option 1 -- A property in a traditional student housing neighborhood. These will allow the most students to live in the property and will maximize the rental income per dollar spent on the purchase. However, it will also expose you to a more turbulent segment of the market, as rental rates and sales prices of these properties can vary quite a bit over time as the supply of competing student housing ebbs and flows based on large complexes being built by student housing developers. You can find purchase options in this category here. Option 2 -- A townhouse in a community that has many owner occupants, some non-student renters and some student renters. Many of these will not allow as many un-related students to live in the property (per zoning regulation or restrictive covenant) and will not provide quite as much rental income per dollar spent on the purchase price. However, they will be in segment of the real estate market that is much more predictable and less volatile from a rental rate and/or sales price perspective. You can find purchase options in this category here and here. I work with parents of JMU students each year who go down each path outlined above, each for different reasons. Most of the time, though, it boils down to their tolerance for risk or their desire for reward. It can also be related to their intended time horizon for owning the property. If you are interested in buying a rental property for your son or daughter to live in while they are at student at JMU, let me know. Oh, and you might also want to read up here... | |
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The Best Deals on Houses in Harrisonburg, Rockingham County |
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 One way for investors to identify the best deals in Harrisonburg is to compare the list price of each active listing to its assessed values. To make it super easy for you (and any other aspiring investors) I have created BestDealsInHarrisonburg.com which features properties that are being offered at a low list price compared to their assessed value. This is likely to mean that they are a "good deal" -- though if their assessed value happens to be high (relative to their market value) then the deal won't be as sweet. As always, consult a Realtor (such as myself) for expert advice on whether any particular property really is a great deal. BestDealsInHarrisonburg.com is simply shuffling some good prospects to the top of the pile for your consideration. What are you waiting for? Go check it out at BestDealsInHarrisonburg.com. | |
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Can All Homes In Harrisonburg Be Rented To Groups of JMU Students? |
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 With great regularity, potential buyers (either investors or parents of JMU students) will ask if a single family home can be purchased and rented to a group of JMU students -- often an intended group of four or more students.
I let them know that it will be no problem at all -- the adjoining property owners in the quaint neighborhood probably won't mind as long as the students aren't too bothersome -- and the City doesn't mind at all if their zoning ordinances are violated, so long as it's just "nice college kids".... WAIT! NOT REALLY! READ ON!!!! It seems that some buyers are really getting that feedback of "sure, it will be fine" -- though I'm not sure if they're getting it from their Realtor, or from someone else advising them in the transaction, or if they just aren't thinking about whether their planned use of a property is allowable. The REAL answer, and the feedback that I ACTUALLY provide to my clients is.... 1. We need to check to see how this property is zoned, and whether that zoning classification allows for that number of unrelated people to live in the property. 2. We need to check to see if there are recorded restrictive covenants for this neighborhood that restrict the number of unrelated people who live in the property. A few notes.... 1. Most single family homes in the City of Harrisonburg are zoned R-1 or R-2 and do NOT allow for three or more unrelated people (students or otherwise) to live in the property. 2. If a property has been used in a non-conforming manner (for example, four students living in it) since before the zoning ordinance was put in place, without a 24 month gap in the non-confirming us, it MIGHT be possible to continue to use the property in that non-conforming manner. And, if #2 above is starting to get confusing, then we arrive at my main reason for writing today.... CALL COMMUNITY DEVELOPMENT TO UNDERSTAND ALLOWED USE OF A PROPERTY! Yes, in fact, there are very helpful City staff in the Community Development department -- who can very quickly help you understand whether a property can be legally used as you intend to use it. And it is imperative that you make this call BEFORE you buy the property, and even BEFORE you make an offer on the property! | |
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Winter Is Often The Best Time For Purchasing Investment Properties |
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 Many of my savvy investor clients wait for these winter months to acquire additional rental properties. Their reasons are pretty logical....
Of note -- this advice is most applicable to townhouse properties that might be purchased by investors or owner occupants. This does not necessarily apply to multi-family properties or student housing properties. If you are looking for some advice on how to get started with real estate investing, check out HarrisonburgInvestmentProperties.com.
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Finding Multi Family Investment Properties in Harrisonburg, Rockingham County |
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 Multi Family Properties can be a means to more quickly and simply make a larger investment purchase. Whether it is a duplex, triplex, quad, or a small apartment building, you will often be able to purchase these properties at a lower price per unit, and more quickly increase your total rental income as compared to purchasing one individual property at a time. HOWEVER - there are very few multi-family properties that are offered for sale in Harrisonburg and Rockingham County. A few tools for you if you are potentially interested in purchasing a multi-family property in this area. This one has been around for a bit.... Current Multi-Family Listings - bookmark this page on HarrisonburgInvestmentProperties.com to come back and review current multi-family listings at any time. This is the new one.... Email Alerts for New Multi-Family Listings - sign up to receive an email alert every time a new multi-family property is listed for sale in Harrisonburg or Rockingham County via the HRAR MLS. Enjoy -- and let me know if you have questions about multi-family properties, or real estate investing in general. | |
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Is it a good time to buy an investment property in Harrisonburg? |
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 I had an interesting conversation with a real estate investor who is considering the purchase of a rental property (or properties) in the City of Harrisonburg, and they asked whether Harrisonburg was a good market in which to buy such a property -- or, put differently, is now a good time to buy a rental property in Harrisonburg. After some discussion, and further processing since then, I think I'm sticking with my original "yes and no" answer.... Yes -- it is a great time to buy a rental property in Harrisonburg:
There are a variety of other factors that could be put on one of the lists above -- but at the end of the day, it is not a clear or obvious decision to buy or not to buy. Some of the factors that should likely weigh in as you think about this decision are:
Below, then, also are a variety of resources that might be helpful to you as you think about this decision and as you consider specific rental properties....
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Looking Closer at Investing |
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 Yesterday, I was commenting on the market demand for well maintained rental properties for non-students in the City of Harrisonburg. I had pitched these general assumptions... Purchase Price: $150,000I had several follow up questions from you all yesterday, so I thought I'd provide a slightly more detailed view of this theoretical investment.... This analysis shows a much fuller analysis of the potential investment, including these assumptions:
In the first year, this investment would potentially result in....
Over the first five years, this would potentially result in....
Let me know if you have questions about any or all of this, as each investor and investment scenario will look a bit different. All that said, I believe there is a reasonable opportunity for a solid return when buying an investment property in Harrisonburg -- and I'd be happy to help you with that process if you are interested. | |
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Attention investors, rentals are scarce, can you help out? |
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 The townhouse shown above recently became available for rent -- and within days there were 30+ inquiries, multiple applications, and the tenants have already moved in. There is a significant shortage of well maintained rental properties for non-students in the City of Harrisonburg. So, investors, anyone want to step up to the plate and purchase some properties to turn around and rent? Now, admittedly, the return on such a property is not as favorable as you might find with a student rental, or a multi-family property, but the numbers still work. For example.... Purchase Price: $150,000 Down Payment: 20% ($30,000) Interest Rate on 30 year Mortgage: 4.5% Monthly Payment: $740 (principal, interest, taxes, insurance) Rental Income: $1050 Property Management: -$105 Association Dues: -$50 Mortgage Payment: -$740 Net Cash Flow: +$155 So -- if you're interested in buying a townhouse or two to help with this rental shortage -- and to benefit yourself financially, let me know. | |
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Balancing RISK and REWARD when purchasing a rental property for your JMU student |
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If you are looking to purchase a rental property for your JMU student to live in while they are a student at JMU, there are two basic paths you could go down.... Option 1 -- A property in a traditional student housing neighborhood. These will allow the most students to live in the property and will maximize the rental income per dollar spent on the purchase. However, it will also expose you to a more turbulent segment of the market, as rental rates and sales prices of these properties can vary quite a bit over time as the supply of competing student housing ebbs and flows based on large complexes being built by student housing developers. You can find purchase options in this category here. Option 2 -- A townhouse in a community that has many owner occupants, some non-student renters and some student renters. Many of these will not allow as many un-related students to live in the property (per zoning regulation or restrictive covenant) and will not provide quite as much rental income per dollar spent on the purchase price. However, they will be in segment of the real estate market that is much more predictable and less volatile from a rental rate and/or sales price perspective. You can find purchase options in this category here and here. I work with parents of JMU students each year who go down each path outlined above, each for different reasons. Most of the time, though, it boils down to their tolerance for risk or their desire for reward. It can also be related to their intended time horizon for owning the property. If you are interested in buying a rental property for your son or daughter to live in while they are at student at JMU, let me know. | |
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This (winter) could be the optimal time to buy an investment property |
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 OK -- admittedly, it doesn't feel like winter out this week, or in may recent weeks, however, I'll still take this time to note that many of my savvy investor clients wait for these winter/winter-ish months to acquire additional rental properties. Their reasons are pretty logical....
Of note -- this advice is most applicable to townhouse properties that might be purchased by investors or owner occupants. This does not necessarily apply to multi-family properties or student housing properties. If you are looking for some advice on how to get started with real estate investing, check out HarrisonburgInvestmentProperties.com.
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Finding great deals on properties in Harrisonburg and Rockingham County |
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One way for investors to identify the best deals in Harrisonburg is to compare the list price of each active listing to its assessed values. To make it super easy for you (and any other aspiring investors) I have created BestDealsInHarrisonburg.com which features properties that are being offered at a low list price compared to their assessed value. This is likely to mean that they are a "good deal" -- though if their assessed value happens to be high (relative to their market value) then the deal won't be as sweet. As always, consult a Realtor (such as myself) for expert advice on whether any particular property really is a great deal. BestDealsInHarrisonburg.com is simply shuffling some good prospects to the top of the pile for your consideration. What are you waiting for? Go check it out at BestDealsInHarrisonburg.com. | |
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Investing in College Student Housing Offers Risks as well as Rewards |
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 As I commented to a potential investor this past week -- investing in student rentals can offer a higher return than other non-student properties, but there are also higher risks associated with such an investment. These include....
Again -- investing in student housing can provide a great return on your investment, but it comes with risks that you should full understand before you make an investment. Learn more about investing at Hunters Ridge here. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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