1. 1031 Exchange Opportunity - If you have a low basis property you can utilize IRS tax code 1031 to defer tax on the sale and acquire a replacement property that can enhance cash flow and provide a higher return.
2. Attractive Purchase Prices - Prices are down some 10-30% from the "bubble market" of (2003-2006).
3. Historically Low Financing Costs - The federal government's stimulus efforts have kept interest rates extremely low, making the cost of debt service exceptionally attractive. Qualified investors can take advantage of today's low interest rates to bolster cash flow and lock in better long-term investment returns.
4. Inflation Hedge - With lead economists predicting that inflation will increase at some point in the future, hard assets, like apartments, can provide a hedge against the declining value of money in an inflationary environment. Historically, rental rates tend to rise in inflationary periods.
5. Yield - Financial Institutions are paying very low yields on money market accounts and other conservative investments. In contrast, many apartment complexes are generating returns in 6-9% range, providing considerably better yields than many other competing investments.
6. Less Competition- Foreign ownership of U.S. Investment in real estate is increasing. The lower value of the dollar has made U.S. real estate an even more attractive bargain. These trends increase demand, which will drive up prices.
7. Most Desirable Product Class - Demand for multi-family rentals has increased as foreclosures have mounted and there is little new multi-family construction in the pipeline to meet such increased demand. As a result, multi-family rents are increasing and many experts project this trend to accelerate.
8. Real Estate is Local - Despite national statistics about real estate, investors should be aware that real estate is local and supply/demand and investment returns are determined by local market conditions. San Diego County's geography is ideal for apartment buildings. The county is surrounded by borders; to the south is Mexico, to the north is Camp Pendleton, to the west is the Pacific Ocean and mountains to the east. With that being said, add the political red tape and the high cost of development in California. With San Diego's geography, political landscape and socioeconomics it is clear why demand consistently rises. The result is restricted supply with an enormous demand for housing.
**PricewaterhouseCoopers and Reis survey showed San Diego to have the lowest vacancy rate (3.9%) of any metropolitan area in the United Stated in June 2011.
APARTMENT REALTY GROUP (ARG) is a leading multi-family property investment sales team in SAN DIEGO COUNTY and the SOUTHERN CALIFORNIA Region. We offer a unique blend of teamwork, experience and an innovative marketing platform allowing us to deliver customized investment real estate solutions. Because we are 100% focused on multi-family investments all of our efforts and resources are spent brokering, underwriting, researching and maintaining the most effective database of multi-family property owners, operators, managers, brokers and capital sources in the industry. Because of our specialization we understand the market and are more responsive to market trends in order to meet the needs of investors.
Article Source: http://EzineArticles.com/?expert=Anastasia_Duboshina
http://EzineArticles.com/?Why-You-Should-Be-Buying-Apartments-in-Todays-Market&id=6866984
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