Attention Investors! Latest (Unofficial) Rental Vacancy Data....

The official rental vacancy numbers for Salt Lake City should be out in the next three to four weeks, so these numbers are not yet set in stone. That said, my associates from several property management companies in town suggest our vacancies will rise just 1/2% to 5%.... in the first half of 2008, the rate at which markets are considered FULLY RENTED. This is fantastic news for investors who are eyeing deals and are counting on an uninterrupted rental stream to make those nasty mortgage payments.

In 2007, Salt Lake City rental vacancies were 4.5%, with an 8.8% growth in rental rates. Local property managers suggest landlords continue to raise rents in the first half of 2008, up between $60-$80 for remodeled and/or updated residential units. This momentum is especially striking comparing our market to others in the West. For example, Phoenix rental vacancies stand at 11.5% for the first quarter of 2008, up from 9.6% in the first quarter of 2007!

Looking Forward

As long as our employment numbers hover around the May 2008 figure of 1.6% (US Bureau of Labor Statistics), housing inventory should continue to decline and home prices will stabilize. That said, the May figure was slightly lower than predicted, so June's number will be telling about the road ahead. I'll be updating this figure as soon as it's out in mid-July, but continue to believe we will see moderate growth in the near term.

Best,

Matt

Investing-Avoiding the Pitfalls

Investing in real estate is like riding down a class five river rapid. If you have an experienced and certified specialist you'll be safe and have fun. If not, your day will quickly turn into a nightmare. Conventional realtors may be familiar with boats, oars and life jackets, maybe they own a fishing boat, but that does not mean they have experience on river rapids. Would you trust a weekend fisherman to take you down the big waters?

Finding investment properties is both challenging and time consuming because the competition, fellow investors, are smart and savvy. Indeed, those who succeed in this specialized area over time do so because of their knowledge, skill, and avoidance of the numerouse pitfalls which can cause disaster. While any realtor can help you find investment property, you'll likely leave money and part of your profit margine on the table if you don't select someone who specializes in purchasing investments.

As a fellow investor, I'm often asked how I find the "deals" or the good values I do. Were I to say "hard work," you might scoff. Indeed, I'm often asked "who I know" or "who's my contact" because many believe that is the only way to find deals. My experience teachs me that while contacts may help, those who succeed do so through the proper training, systems, organization and HARD WORK.

Indeed, investing, finding value, however you want to say it, is my favorite part of the real estate business. Going through foreclosure lists, investigating the county record for tax liens and debt amounts, attending auctions, searching the MLS, working short sales, or REO's (bank owned properties), may sound dreary or torturous to you, but its what I love and where I add value for my clients.

To help you understand my philosophy and motivation, lets consider what famed investor Warren Buffet, the "Oracle of Omaha" says about finding a good investment "Be greedy when others are fearful, fearful when others are greedy." Translation, when something is all the rage, stocks, homes whatever, its probably wise to pull back, take profits, be cautious. When things look desperate, when the "crowd" looks to be throwing in the towel, that's the time to bargain shop. The problem is, its EASY to follow the herd, its much harder to act when everyone else is doing the opposite. Here's where study, training, and apptitude make the difference.

If your considering investing in real estate, the first thing you should do is interview several agents. Have they invested for themselves or a client recently? Are they versed in foreclosures, investigating the county record, do they know the tricks and PITFALLS of short sales? Ask them to do a CAP rate equation on a rental property and what price this might justify paying. If your agent doesn't know these terms, cannnot explain them so you can understand, be cautious. They consider themselves certified river rafting guides, when in reality they're nothing more than weekend warriors.