A building with many units immediately offers more value than a single home because you have a lower
risk of vacancies.
A 2010 research paper by C.F. Sirmans and Barrett A. Slade («Sale Leaseback Transactions: Price Premiums and Market Efficiencies,» Journal of Real Estate Research, April - June 2010) speculates that somewhat higher rents might be justified for sale - leaseback properties because of the lower
risk of vacancies and the higher credit profile of most sale - leaseback tenants.
If I can spread around the idiosyncratic
risk of vacancies, major repairs, mold problems, hurricanes, earthquakes, lawsuits, etc. over a larger number of properties and over a wider geographic area, I'm all for it!
Buildings farther from hospital campuses may run a greater
risk of vacancy.
Our portfolio includes properties sourced in the best locations in the US giving solid returns and minimizing
the risks of vacancies & repairs.
Lease renewals are also beneficial because they reduce
your risk of vacancy.
Not exact matches
The possibility
of failed elections introduces unnecessary legal uncertainty and
risk to our director election process as
vacancies on our board
of directors could result in our inability to comply with certain NASDAQ listing requirements or other securities regulations.
It is a fair investment with
risk from
vacancy, tenant damage, adverse neighbourhood change and compensating potential gains if the price
of the property rises.
This offers added security and reduces the
risk for potential
vacancy costs during the first 18 months
of ownership.
REIT
Risk (Real Estate Fund only): The Fund's investments in REITs may subject the fund to the following additional
risks: declines in the value
of real estate, changes in interest rates, lack
of available mortgage funds or other limits on obtaining capital, overbuilding, extended
vacancies of properties, increases in property taxes and operating expenses, changes in zoning laws and regulations, casualty or condemnation losses and tax consequences
of the failure
of a REIT to
Or if you have something like a 15 % cap rate... that's not necessarily outstanding given the level
of risk (uncertain
vacancies) involved in a hotel.
Even with 427 available rooms, it's still better to book at least a week in advance or you run the
risk of not finding any
vacancies, or face significantly higher rates.
Following a restructuring exercise which placed over 500 Ministry
of Defence employees at
risk of redeployment, Mr Coles was told that his assignment would come to an end and informed
of the subsequent
vacancy.
The job
of a Trainee Recruitment Consultant is simple; you find candidates for your client's
vacancies in this case within the Governance sector (Audit,
Risk and Compliance).
The Job The job
of a Trainee Recruitment Consultant is simple; you find candidates for your client's
vacancies in this case within the Governance sector (Audit,
Risk and Compliance).
The lack
of land coupled with manufacturers» reluctance to
risk losing workers with a distant relocation has produced extremely low
vacancies in Chicago.
With this much leverage, your Debt Coverage Ratios can potentially get very thin, and multiplying this across an entire portfolio
of properties financed in such a fashion, the
risk is very high that a confluence
of issues with the economy / rents, large capital repairs, high
vacancies, etc., can bring down the house
of cards and ruin your credit for a long time.
If a property features a
vacancy rate
of more than 30 percent, investors don't want to
risk putting a lot
of equity into it, adds Walter.
Definitely a
risk Shaune, although I would argue that if you have enough money to buy for cash first, you have enough money to cover some months
of vacancies.
Smart investors factor in a
vacancy rate
of 5 % into their cash flow calculations, as a
risk management measure, even if the current
vacancy rate for the area is lower.
Fortunately, with the right planning, each one
of these
risks can be addressed in advance to ensure
vacancies are minimized and that a
vacancy does not derail the investor's investment strategy.
A
vacancy can be the result
of a number
of issues, and there may be a number
of contributing
risk factors, each
of which needs to be addressed.
Then estimate the amount
of vacancy shortfall to deduct from the stabilized value to account for the costs,
risk, effort and skill that a buyer
of the property would require to bring it to stabilized occupancy.
- Relatively high fixed operating costs, as percent
of rental income; although, a significant portion
of operating expenses is usually reimbursed by tenants, office investors bear the
risk of having to pay a greater portion
of a building's operating costs and property taxes when market
vacancy goes up and the market softens.
Limit the
risk of long
vacancies.
An extended period
of property
vacancy is a serious
risk for any landlord, and it could happen often and quickly if you aren't careful.
If you charge too much, you might be stuck with extended
vacancies; if you charge too little, you run the
risk of having an investment that isn't profitable.
Analyzing critical factors such as
vacancy rates, absorption, rent growth, refinance rates, and expenses helps create a clearer picture
of risk, says Miller.
Thus, if local market conditions are good, that is, if the
vacancy rate is low, demand is growing faster than supply, and rents are rising, then investors will perceive that the
risk of property ownership is lower and the required rate
of return, and, hence the discount rate, will be lower, all else being equal.