Investment advise needed Re: Scad Rental Properties (Savannah: appointed, sale)

[pink caddy]

I have not read this board before as I am an active member of the CLT forum board.I would appreciate any and all advise from knowledgeable people regarding the real estate investment market in Sav. now.

I am CONSIDERING (my bolding) investing in multi-unit houses close to SCAD as rental property to students. Rental properties are not new to me as this has been my business for the past 15 years.However, I have had only one experience with student housing (Stroudsburg Pa) and I must say it was not the best experience I ever had, nor the worst.

Aside from the economics of this type of investment (which I will do ) what insight, thoughts, comments and what-have-you can any of you share with me? Don't hold back---I'm seasoned---give the good, bad and the ugly.

Note to real estate agents:If you can contribute to this in an un-bias way I would welcome your comments.Follow TOS rules for company names and send by DM if you wish.

[ellie]

From what I can tell about real estate investing in Savannah, particularly for rental properties, is that the bulk of initial investing occurred over the last decade and most, if not all, properties have already been milked of their available profit potential.

That's it in a nutshell.

[pink caddy]

Originally Posted by ellie

From what I can tell about real estate investing in Savannah, particularly for rental properties, is that the bulk of initial investing occurred over the last decade and most, if not all, properties have already been milked of their available profit potential.

That's it in a nutshell.

I'm sure you're right from a resale of property viewpoint. What I had in mind was from a cash flow basis. I will be in a position (Jan '09) to invest money because of a sale of property in the NE. I would prefer to invest in a 1031 rather than pay the tax on the capital gain that would be due.

[ellie]

The appraised value of many properties downtown far exceeds the potential rental income from those same properties. This is an issue frequently discussed around here. Why buy a $300,000 property if you can only earn $1800/mo on it?

You might be able to find a deal - you seem to know more about the subject than I do, but with all the people here in Savannah trying to do exactly the same thing; you'll either gloat or eventually tell me I'm right.

By the way, I don't know what a 1031 is but I'm guessing that means you need to reinvest in something similar to what you had?

I also guess you're expecting your investment to increase in value more quickly than taxes and maintenance nibble away at it? But if all you need to do is get a positive cash flow and to make the percentages work, then welcome to town.

[Padgett2]

SCAD is scattered all over the city. mostly in the Historic District. So an area "close to SCAD" would just about include all of the downtown Savannah area.

Ellie is correct, the taxes on the improved property suitable for rental is very high. All of the places are very old and if they haven't already been restored, then you might be looking at a huge investment in restoration and repair. That's when it gets really interesting. You just can't do what you want to in the HD, you have to "restore" according certain guidelines as to what is appropriate for the era of the building.

At the present time, I believe that SCAD plans to build dorms on the western side of the city with some class rooms out there. This might be worth looking into for that surrounding area. I don't know the time frame for that, or if it would cause fewer students renting in the HD.

Parents who can afford it, often buy a house for their student and allow him/her to rent out the bedrooms for anything they want to. You would also be competing with that sort of thing.

I understand your needs to re-invest the money. You could make a good return, if you could buy a good many units in good repair. Possible? oh, yes, but you could be badly disappointed.