Given high vacancy rates and lenders that are still skittish about committing relatively large amounts for construction and development financing, it is hard to justify breaking ground on new office projects, Reis said.
Not exact matches
This type of interest reserve is typically only offered by banks and institutional lenders for construction loans, but it can be particularly useful in situations where a property has a temporarily
high vacancy rate as it
gives the owner the necessary time to find more tenants and increase the property's income production.
Regardless, with the 40 % rule, we're cash flowing roughly $ 2,200 / year; however, considering I will have
higher quality tenants at 1,500 / month, the home is completely renovated,
vacancy rates are less than 1 % and the only major repair looming (fingers crossed) is the roof, I think it could be realistic to have our total operating expenses (including insurance and taxes) at roughly 25 % gross rental income for the first few years, which should
give a CAP of 9.11 % and COC on 20.73 %.
Specifically, we looked at home
vacancy, capitalization, home value appreciation and job growth
rates, changes in rental prices, and the average number of days properties have been on the market to determine which U.S. metros will
give investors the
highest returns on rental investments.