Outlook for Apartment Rents - Particularly C (Phoenix: appointed, real estate)

[Potential_Landlord]

As far as I can see it - and per the link to Colliers below - apartment rents are finally increading somewhat after falling pretty bad during the financial crisis. But is this true for the many C class apartments in the Phoenix area? - Due to illegals exodus and the crisis they were ver y hard hit. Is there an improvement as well or is this only for A class apartments? - When I looked for a potential fourplex this winter I was quite disappointed with what I saw - priceswere way down, but also rental prospects. What do the experts think - should I make another attempt to buy a cheap fourplex or so (all I can afford with 25% down ;-)


http://www.colliersmn.com/prod/ccgrd.nsf/publish/D11E4A583D423C4885257885007F8CD2/$File/Phoenix+Multifamily+Market+Report+Q111.pdf (broken link)

[khuntrevor]

That was great reading--thanks for sharing. IMO, you should buy 4 individual condo units--you will get more security, less maintenance, more diversification. But, getting a loan is a beast on a condo--but I'm not sure getting a loan on a 4-plex would be better. maybe you could clue us in on who's financing 4-plexes. In many parts of the City, that I am familiar with--these types of buildings are the biggest eyesores in the whole community and have the lowest rent, lowest life of renters. I would take 4 of my 22000 Townhouses any day of the week over a four-plex, even in the same 85021 ZIP. I think this would be especially true if you were going to be an out of town owner. Good luck--and thanks again for the motivation for me to gt my current project finished! I've already put in 16 hours this week, and it's a Holiday....self employment has its benefits. Might even sleep in and give my aching back a rest, tomorrow.

[talich]

We were recently priced out of rental market. Unbelievable. The apartment raised our monthly rent by $200+, more the 20%! It happened at April fool day. What a joke!

Later I noticed that the apartment just wanted to drive us out, so it can remodel the units, change it to all wood-like floor, with new cabinets, countertops and appliances. And the future renters will pay for this, of course. I met several renters, they all had been kinda driven out. Some signed short term lease, some just moved away immediately.

[khuntrevor]

'ich, that stuff happens. It's an inconvenience, not an injustice. If I simply wanted my place back, I would do the same thing..if they want to pay 25% more they can stay, etc....I would still honor the terms of their lease 100%, and promptly refund their deposit so they could move on. Life is full of gambles. Renting is no guarantee of stability, unless, you sign a multi-year lease, which few owners would want to pay a commission on. At the very tail end of the last real estate bust, I bought a unit for 26K in BHC, fully furnished--total turn-key. I was surprised to meet an adjacent neighbor, who told me he was only paying 250 rent (the hoa was 150), and he would never pay a penny more. Well, we got rid of a few troublemakers, got the word to his LL that 500 was the going rate, and next thing you know, he was back in a mobile home where he came from. It has been a renter's market, but the real desperate owners have been foreclosed and the new owners are more business savvy. Our complex (split condos and apartments) contracted with Catholic Services to put refugees in vacant places starting in early 2009. Some of the refugees are good friends of mine. But, something tells me the "charitableness" of the management is going to be ending in the near future.

[Potential_Landlord]

Originally Posted by khuntrevor

That was great reading--thanks for sharing. IMO, you should buy 4 individual condo units--you will get more security, less maintenance, more diversification. ...

You're right about the ugliness of a fourplex in avery way. My thinking was I pay 100k for a renovated and rented 4-plex and have one loan of 75k. Expenses are not extreme, but my concern is that I have to see rents go over the current 400/month which seem to be the absolute top and not good prospects of rising it until the market turns (meaning people move into the valley and find work as they used to before the employer sanctions law and the financial crisis). So I am looking for such prospects. If anyone has an idea - just let me know ;-)

[talich]

khuntrevor, you are right. As renters, we face the uncertainty every time we resign the lease.

What makes me angry is, the leasing agent told me that they raise the rent because the market value now increases. They certainly would not tell me the truth on remodeling.

But, they are not totally lying.

I think if the apartment is willing put remodel all units now, they must believe in the market. When I start looking around for replacement, I found there is almost no cheaper ones of similar condition in the nearby neighborhood.