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 research said buying and renovating existing properties is more attractive these days thannew construction. “But buyers don’t flip unitx once they’re fixed up,” he said. they raise rents and try to get back their Someolder properties, Danter said, don’t lend themselves to financiakl viability. A unit could have a good location, but could be “functionallyg obsolete.” In that case, there mighr not be enough of a return in highed rents if a lot of monehy has to be sunk into improvinfgthe facility.
Obsolete units are those that would require new plumbing and electrical servicw among othercostly improvements, such as making it accessible to the Small bedrooms with no closetws also might be a limiting factor despites a good location. “Locationn is critical, if not the most important factor,” Danterf said, “but it has to be the right concept at theright price.” J. Rosenbusch, vice president of investmentsat , said there’ a reason rental units need rehabilitation. People who bough property in late 2004 through 2006now can’tt keep up with the debt, he said. “They’re over-leveragee and let it all go.
They have a prettyy significant vacancy issue and notablephysical issues. You see a lot of work needs to be he said. “It becomes more of a managemeny issue. They can’t handle the propertyg any more.” Rosenbusch said he and his Associate Vice President Matthew have seen an increasse in activity in therehab market. The economt played some role in that, but he blamexd owners for not understanding what they weregetting into. Whild they thought they were getting they were actually buying when the units were selling at peak which havesince faltered.
Buyers, particularly thosed coming into the market for thefirstf time, didn’t understand financing, taxes and insurance issues. Rosenbusch said purchasin rental units is now one of the easier avenues to find He alsosaid there’s been increased activity by out-of-statw buyers who see an opportunitty to get good deals. Columbus has had a stable rental market. But vacancies rose when subprime mortgagesd made it possible for renters to jump into a Fiveyears ago, Rosenbusch there was high vacancy and a lot of unitd on the market. “Columbus was beat up,” he It’s a good time to renovate, said Breng Crawford, a principal in Columbus-based .
The company recently bought RemingtonStation Apartments, a 344-unit compled in Westerville. It also is renovatinfg Olentangy Commons Apartmentsat S.R. 315 and Hendersomn Road. Crawford expects the demand for renovated apartmentss to remain strong for three to four With construction and land acquisitionn costs high andcredit tight, the new-build marke t has softened, making it difficulg for companies in that business to ramp up in a hurry. “You can’tt just add 10,000 units,” he said. “We’re not seeingh excessive building.” Instead, upgrading counter tops, moldingh and cabinets allows renovators to raisre theirrent $75 to $100 a month.
Crawfordr said his company tendsa to hold onto rehabbed units a minimunm offive years. Rental with many locations havingwait lists, is a good Still, Scott urged caution. “There’s a host of thinga that go intothese properties,” he said. “It may not translatd into profit ofgreat significance. There are outside force s and a different kindof pressure. If your crediy is good, there is mone y out there.
But it may be difficulrt to secure financing to do some of the things that need tobe