Apartment Investors Returning to Marin County Market

San Rafael-Now that the dust has settled in the economy and consumer confidence is returning, apartment investors are returning to the Marin County apartment market seeking safe long term investments that they can manage and control themselves.

During the past month, more and more investors have been entering the market after sitting on the sidelines since the first month of 2009. Fortunately, apartment inventory is increasing, and there is much more product to choose from.

Contrary to what many investors thought would be a large drop in apartment pricing, the market appears to be stabilizing and pricing is now back to valuation by location and amenities. For example, properties in central San Rafael, depending on location, are priced from 12.5-14.5GRM, more in line with pricing in the past. Properties that have been remodeled with the subsequent opportunity to raise rents and increase income are priced at the higher end. Properties with opportunity to remodel and raise rents are now priced at 12.5-13.5 GRM.

As in other markets, apartment properties in the best locations (walk to town, easy access to the Bay or San Francisco) are priced at the highest end of the market. Investors can expect to pay 16-18 times rents for these locations. In turn, these properties command the highest rents and experience the least amount of turnover.

Comparing Marin County apartment returns with all other investments right now, the 4-5% cap rates are almost twice as high as leaving money in a CD or money market account. With the ability to leverage in to the property, have the tenants pay down the debt , raise rents over time and the considerable tax shelter, investors would agree that this type of investment is the safest return by far than anything else available at this time.

Additionally, current mortgage rates are holding steady at around 6-6.5%, depending on the program that is selected for the loan. Although lenders are still being somewhat conservative in their loan to values (30-40%) many sellers are now offering secondary financing to help the buyer bridge the gap between the lender and the downpayment.

Please find below my latest inventory. Feel free to call me on my cell at 415-302-7730 if you have questions about any property. You can download a complete package on these properties and others at my website: www.khiggins.com.

Happy hunting!!
 
Katherine J. Higgins
Investment Broker
Mobile: (415) 302-7730