With rental housing at a premium, older complexes need a facelift - Business First of Columbus:

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“Rental housing is at a premium,” said Jay executive director ofthe . Ken president of , a Columbus real estate researcgh firm, said buying and renovating existing properties is more attractivr these days thannew construction. “But buyers don’gt flip units once they’re fixed up,” he said. they raise rents and try to get backtheir investment.” Some older Danter said, don’t lend themselvexs to financial viability. A unit could have a good but couldbe “functionally obsolete.” In that case, ther might not be enough of a return in higher renta if a lot of money has to be sunk into improvinf the facility.
Obsolete units are those that would requirwe new plumbing and electrical services among othercostly improvements, such as making it accessible to the Small bedrooms with no closets also might be a limitinbg factor despite a good “Location is critical, if not the most importang factor,” Danter said, “but it has to be the right concept at the right J. Rosenbusch, vice president of investmentsat , said there’s a reason rental units need People who bought property in late 2004 througg 2006 now can’t keep up with the he said. “They’re over-leveraged and let it all go. They have a prettu significant vacancy issue and notablephysical issues.
You see a lot of work needsz tobe done,” he “It becomes more of a management They can’t handle the propertty any more.” Rosenbusch said he and his partner, Associatwe Vice President Matthew Gockstetter, have seen an increase in activity in the rehah market. The economy played some role in but he blamed ownerw for not understanding what they were getting While they thought they weregetting deals, they were actuallyh buying when the units were selling at peak prices, whicuh have since faltered. Buyers, particularly those coming into the marker for thefirst time, didn’t understand financing, taxess and insurance issues.
Rosenbusch said purchasing rental units is now one of the easiert avenues tofind financing. He also said there’s been increasede activity by out-of-state buyers who see an opportunityt to getgood deals. Historically, Columbus has had a stabled rental market. But vacancies rose when subprimew mortgages made it possible for rentersa to jump intoa home. Five years ago, Rosenbusc said, there was high vacancg and a lot of units onthe “Columbus was beat up,” he said. It’e a good time to renovate, said Breny Crawford, a principal in Columbus-basesd . The company recently boughr RemingtonStation Apartments, a 344-unit comple x in Westerville.
It also is renovatinb Olentangy Commons Apartmentsat S.R. 315 and Hendersomn Road. Crawford expects the demand for renovated apartmente to remain strong for three to four With construction and land acquisition costs high andcredit tight, the new-build markety has softened, making it difficult for companies in that busines to ramp up in a hurry. “You can’t just add 10,0009 units,” he said. “We’re not seeing excessive building.” upgrading counter tops, molding and cabinets allows renovatorzs to raise theirrent $75 to $100 a Crawford said his companh tends to hold onto rehabbefd units a minimum of five years.
Rental with many locations havingwait lists, is a good Still, Scott urged caution. “There’s a host of things that go intothesre properties,” he said. “It may not translate into profi t ofgreat significance. There are outside forces and a differeng kindof pressure. If your credit is there is moneyout there. But it may be difficult to secured financing to do some of the things that need tobe