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From an investor perspective, now is a good time to get into the multi-family game.
“The rental market is hot. Many of the investors who got off the playing field in 2009, 2010 are getting back onto the field,” says Ratliff. And banks are lending again, particularly to investors with higher equity requirements and proven industry acumen.
The market is very tight, however. Ratliff says recent reports suggest apartment buyers outnumber sellers four to one.
According to the NAI West 2012 Mid-Year Market Report, the amount of square footage sold declined in 2012 over the previous year. However, the price per square foot rose from $90.90 to $94.96—an indication that supply is tightening and prices are on the rise.
So now is a good time for sellers as well.
“It is an optimal time to sell if you’re considering disposing of your assets over the next three to five years,” says Ratliff. Interest rates are still low and capital gains taxes are at an all-time low of 15 percent, but Ratliff points out that these taxes may face a sharp increase at the start of 2013.
“It’s a great time to get out of the market…it’s also a great time to buy because you can ride this tide of increasing rents,” he says.