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DISPOSITION WATCH for Apartment Owners

Posted 07/15/13 by Multifamily Associates and filed under:

Since January 2013 calls from buyers looking for multi-family units have increased.

•Buyers have become aggressive

•Marketing times have decreased

•Sales prices have increased

In our opinion this has clearly become a Seller’s Market.  In spite of this change, very few owners have put properties on the market.  We believe owners are reluctant sellers for 2 reasons:

1.Potential sellers don’t want to pay taxes

2.Potential sellers don’t know where else to invest their money

There are a couple of reasons to re-examine current thinking.  Current tax rates are at historical lows and there are conservative investments yielding 5% or more.  In addition, as interest rates rise apartment values tend to go down.  The key component of apartment value is the cap rate, and it moves in the same direction as interest rates.  The chart shows what happens to apartment values with a simple 1% move in interest/cap rates.

A good time to sell is when someone wants to buy!

If you would like an estimate of the value of your units or information about alternative investments, feel free to call us.

OUR PLEDGE “To operate always and only in the best interest of our clients”

Sincerely,

Bob, Mike & Bob

Call or email us today to setup a private/confidential meeting to talk more about your properties!