Student Housing Market is Growing – What You Need to Know Before Investing in It

DuPage County real estate lawyersThinking of expanding your investment portfolio this fall? Student housing saw a 10 percent increase in value over the past year, even as several other commercial real estate (CRE) sectors experienced a decline. The student housing market is also projected to continue in an upward trend over the next several years. Learn more about how to invest this growing market, and discover how a seasoned real estate lawyer can help you make the first steps. 

Why Invest in Student Housing? 

Student housing is unlike any other CRE sector. It tends to be less volatile since students typically continue to enroll in college, despite (and sometimes because of) economic downturns. Another major advantage to this market is that students typically only sign year-long leases, so landlords can analyze the market each year and increase their rental rates accordingly. Since the rent costs are typically shared between roommates, landlords can also typically charge more per square foot in a student housing unit – especially if they are in a highly desirable location. Lease renewals may also be easier to obtain in areas nearest to campus since students often know well in advance whether they will be returning the following year. 

Student Housing Landlords Face Unique Challenges

Although there are many potential benefits to investing in student housing, landlords who invest in this market often face some unique challenges. While rent may be paid by the student’s parents (which often means consistent, timely payments), there are students who rely on financial aid for their housing needs. As such, the landlord may need to accommodate a tenant who pays their rent on a quarterly basis. Students may also return home for the summer, so they may not sign a full year lease, so landlords often need to prepare for a lag in the summer months. 

Maturing adults may also struggle with certain tenant issues, like calling in to let the landlord know that there is a leak. There could also be issues with noise disturbances with certain students. Landlords can attempt to mitigate these issues by being patient but firm about their expectations for student tenants. 

Breaking Into the Student Housing Market

Whether you want to take a hands-off approach to student housing and invest in an REIT or wish to purchase and rent student housing on your own, it is important to have seasoned legal assistance. With more than 40 years of legal experience, Stock, Carlson, Oldfield & McGrath, LLC can help protect your investment and advise you of your options in the student housing market. Call 630-665-2500 and schedule your personalized consultation with our DuPage County real estate lawyers to learn more.
Sources:

https://money.usnews.com/investing/real-estate-investments/articles/2018-08-10/take-a-crash-course-in-student-housing-investments

https://www.forbes.com/sites/bisnow/2017/07/10/these-two-public-reits-are-making-a-killing-in-student-housing/#46c6ed985eff

https://www.wsj.com/articles/u-s-commercial-property-values-surge-in-niche-sectors-1531825204

 

House-Flipping in Illinois – Where Are the Hottest Spots to Invest?

DuPage County real estate lawyersHouse-flipping has become somewhat of a trend in the United States – and for good reason. Financing options are more plentiful and far easier to obtain than they once were, and the housing market is finally starting to recover from the Great Recession. However, not all areas are profitable for investors. The following information can help point you into some of the hottest communities to flip in, and it provides you with details on what a seasoned real estate attorney can do to protect your investment portfolio and financial future. 

Chicago and Surrounding Cook County Areas

Of all the areas in Illinois, the most promising for flippers can be found in Chicago and the surrounding areas in Cook County. Experts say that investors are seeing as much as a 97.7 percent ROI, which is much higher than most areas in the nation. To break that down into dollar terms, the average purchase price for flipped houses is at about $88,500. Those houses have sold for an average of $175,000. While that is a decline of about 2 percent from last year (and thereby suggestive that opportunity in the market is slowly diminishing), homes can still be purchased at a deep discount in the area. 

Other Areas of Interest in Illinois

Most areas in Illinois continue to have a higher ROI than the national average. However, some areas throughout the state are more profitable than others. Lake County is one of the areas where investors are seeing the lowest ROI (47.8 percent). It also has a lower ROI than the national average. Yet investors are still making profits in this area – mostly because the savvy ones know you have to take the housing market block-by-block. Take the time to research the area. Know what houses are selling for in the neighborhood where you are thinking of buying, and analyze the trends for that specific area. 

Contact Our DuPage County Real Estate Lawyers for Assistance

While hiring a professional can cut into your bottom line on an investment, there are times when that added expense is worth the cost. The assistance of a seasoned real estate attorney is a prime example. Able to help with everything from performing your due diligence to negotiating better contracts, the right attorney could potentially save you thousands on your next deal. 

Stock, Carlson, Oldfield & McGrath, LLC is backed by more than 40 years of legal experience. Our skilled DuPage County real estate lawyers will work hard to ensure you get the best ROI on your next transaction. Schedule your personalized consultation to get started. Call 630-665-2500.

Source:

http://www.chicagotribune.com/business/ct-house-flipping-chicago-0602-biz-20160601-story.html

 

Purchasing Investment Property – Five Considerations to Make Before You Buy

DuPage County real estate lawyersInvesting in real estate can be a lucrative move for the financially savvy, but for those that fail to do their homework, there is a risk of severe financial loss. Learn how you can be a part of the former group of investors, rather than the latter, by avoiding some of the most common real estate investment pitfalls. You shall also discover how an experienced attorney can help reduce the risk of complications in your next real estate transaction.

How Much Will It Cost? 

Calculating the cost of a property can get a little complex, especially for the novice investor. That is because there is more to cost than the sale price, closing costs, and title fees. There could be zoning problems that need to be corrected before you can rent or sell the property, and distressed properties, which are common in the real estate investment sector, could have more damage than you initially thought. As such, investors are encouraged to perform their due diligence before purchasing an investment property, especially if it needs repairs.

How Will Location Impact Your ROI?

Location is everything, especially when it comes to investment property. Prime locations will typically cost more, but they tend to have a higher return-on-investment (ROI). In contrast, properties that are in sub-prime locations are more affordable, but they may have a lower ROI. Areas that are up-and-coming may have a lower ROI to start with, but they may provide you with long-term gains. You could also find yourself dealing with a property that is located in a distressed or declining area, and that might require you to loosen your renting requirements to obtain any sort of gain. In other words, choose your location wisely and always consider how the location could impact your ROI, both immediately and in the long-run.

Who Will Manage Your Property? 

While some investors make great property managers, others lack the skills or temperament to deal with tenants and their potential issues. For example, an investor may have a great deal of compassion, so they may be willing to rent to a tenant based on circumstance, rather than their ability to pay. Sadly, this can place the investor at a serious risk for financial loss – and possibly even financial devastation if they manage several properties in the very same manner. If you fear you cannot manage your property effectively, or you would simply like to ensure you have more time to focus on your portfolio, you may want to consider hiring a property management company instead of handling everything on your own.

Are You Following the "Rules" of Investment?

Investment gurus have one hard and fast rule: never invest in a property that cannot make at least one percent of its cost in the course of a month. In short, if a home is costing you $250,000 to purchase and prepare for tenants, you need to be able to rent it out for at least $2,500 each month. If you cannot make this, or if the pricing is unreasonable for the area, it may be best to find another property. There are exceptions, of course, but investors are discouraged from making them without the guidance and advice of a seasoned professional.

Have You Accounted for the Unexpected?

Seasoned investors know that upfront expenses, such as repairs and closing costs, are sometimes just the beginning. There may be other unexpected expenses, such as taxes and insurance as well. Plan for them and you will be more likely to experience a hefty return on your investment, but fail to do so and you could lose a substantial amount on your next transaction.

Contact Our Skilled Wheaton Real Estate Attorneys 

When you need protection in an investment transaction, Stock, Carlson, Oldfield & McGrath, LLC is the firm to call. Dedicated and experienced, our Wheaton real estate attorneys can assist you in performing your due diligence, and we can help ensure you have not missed any pertinent details. Schedule your personalized consultation to get started. Call 630-665-2500 today.

Source:

https://www.forbes.com/sites/forbesrealestatecouncil/2017/09/11/seven-things-to-consider-when-buying-an-investment-rental-property/#6f46d3b46dad