Wednesday, September 26, 2012

Minorities and Higher-Income Housholds Dominate Increase in Renters

Between 2001 and 2011 the number of renters increased by 5.1 million -- the largest number in the postwar era.  A full 1 million renters were added in 2011 alone, the most since the early 1980's. 

Married couples comprised 50 percent of the growth in renter households from 2006-2011. 

As the number of renters has been increasing, multifamily housing starts have increased to an annual rate of 225,000 in early 2012 -- still far short of the 340,000-unit annual average seen in the decade prior to 2007-2009.  In many markets, developers are planning substantially more multifamily construction, leading to the current debate over whether certain U.S. markets will soon be oversupplied. 

Read the complete 2012 Harvard Study "State of the Nation's Housing."

36-Unit Multifamily Investment Property in SE Portland - With Parking - $2.75M

Lassam Terrace is a well-maintained property with unique features not typically found in a property of this size. The two bedroom and one and one half bathroom apartments all include air conditioning and washer/dryer hookups.  Lassam Terrace is a newer complex for this area; a neighborhood of established single family homes and retail businesses.
The Lassam Terrace Apartments boast a strong eastside location near Mall 205 and Portland’s green line MAX light rail. The property is within the Gateway Area business district in close proximity to retail and commercial services including Target, 24 Hour Fitness and Bed Bath & Beyond.

Tuesday, September 25, 2012

21 Townhouse Units Near Multnomah Village $1,750,000

These 21 townhouse tyle units near Multnomah Village are just minutes from city center.  This low-density property is in a peaceful setting - some units have views.  A professionally managed, turnkey property.  Click here for more information on Capitol Terrace.

Monday, September 24, 2012

Apartment Owners: Find Peace of Mind Requiring Renter’s Insurance

A National Multi Housing Council Risk Survey last fall reveals that 66 percent of respondents now require renter’s insurance regardless of the state or municipality.  The debate over whether requiring renters to carry insurance will lead to increased vacancies is sometimes a loud one.  Read more in the Property Management Insider.

Friday, September 21, 2012

Action Strategy Checklist for A Green Improvement Guide

The City of Portland has a new guide with practical ideas and strategies that will help you save energy, improve comfort, minimize waste and help Portland reduce carbon emissions by 80 percent by 2050 as described in the 2009 Climate Action Plan.

Many of the items outlined in this guide for businesses are applicable to new and retrofitted apartments.  To download a PDF of this 49 page guide, click here.

To see HFO's current apartment listings, click here.

Thursday, September 20, 2012

Bedbugs - Driving Owners to Bankruptcy?

The Oregonian reports that some apartment owners with an outbreak of bedbugs have been forced into bankruptcy trying to deal with the problem. Read More in today's Oregon Live.

What can you do to be proactive? Start here:  National Apartment Association - Bed Bugs Resource Center.

Wednesday, September 19, 2012

New Multifamily Development on Division St. - 224 Apartments And No Parking

Seven of the 11 new buildings won’t have on-site parking—thanks to a city zoning rule that exempts developers from having to provide it. That’s 224 new rental units in 13 blocks without a single new parking space.  Read more in today's Willamette Week article.

Meanwhile the Oregonian reported today that a 68-unit apartment building on N. Interstate being built without parking has neighbors in an uproar.  Read more.

OPB is now compiling its stories on the issue -- Click here.

See all of HFO's current multifamily investment properties in Oregon and SW Washington.

Study: Young People Flock to Portland to Work!

Despite ranking 42nd out of 50 metro areas for annual income ($42k) -- a study finds that young people move to Portland to work, and not just to "put a bird on it," as Portlandia fans might have been led to believe.  Read more.

Monday, September 17, 2012

Update on Citizen Concerns over New Apartments Without Parking

At last week's Portland City Council meeting neighborhood residents expressed concern over the number of apartments under construction without parking.  Read or listen to OPB's report.

Click here to see all of HFO's listings.

Apartment Owners - Time to Plan Now for 2013's Possible Tax Increases on Future Capital Gains and Ordinary Income

By Michael Lortz and Erin Dulley
Geffen Mesher & Company, P.C.

It's time to switch to high gear for the possible federal tax changes coming our way in 2013. Although the future tax landscape remains foggy, planning can go a long way in minimizing the impact of potential tax increases. As things stand today, a number of tax increases are scheduled to take effect in 2013.

Ordinary Income Tax Rates
Tax cuts that became law in 2001 and 2003 will expire at the end of 2012 unless legislative intervention occurs. Since this is an election year, highlighted by contention and gridlock in Congress, it is uncertain whether Congress will pass an extension of these tax cuts before year end. It is important to consider these changes now in your financial planning.

One of the biggest changes on the horizon is an increase to ordinary income tax rates. The lowest marginal rate would jump from 10 percent in 2012 to 15 percent in 2013. The top tax rate would climb from 35 percent to 39.6 percent. In addition, actual rates will be even higher after factoring in a new 3.8 percent Medicare tax on passive investment income, and the 0.9 percent Medicare payroll-tax increase, both of which will affect individual filers making more than $200,000 and joint filers with income above $250,000.
Capital Gains Tax Rates
Cuts to capital gains tax rates also expire at the end of 2012. In 2013, the capital gains tax rate is scheduled to rise from 15 to 20 percent. In addition, qualified dividends, which are currently taxed at capital gain rates, are scheduled to be taxed as ordinary income once again, with a top rate of 39.6 percent.

The change in capital gains taxes will have even more of an impact on low and high income earners. Consider that earners in the 15 percent marginal income tax bracket currently have zero capital gains tax liability. In 2013, the capital gains tax is scheduled to increase from zero to 10 percent for the lowest tax brackets. This change will particularly affect retirees who have low taxable income but have long-term investments with significant gains.

After 2012, individual taxpayers with adjusted gross income over $200,000 (or $250,000 if married filing jointly) will have an additional 3.8 percent Medicare tax added to their capital gains tax rate. Effectively, this will increase the capital gains tax rate from today’s 15 percent to 23.8 percent in 2013.

Given these circumstances, some investors will find it advantageous to sell assets resulting in long-term capital gains during 2012 in order to have those gains taxed at the current lower rate.**

Estate Tax Changes
Another key issue that may affect an owner’s decision to sell in 2012 is the possibility of an increased Estate Tax in 2013. One of the following options seems likely to play out in Congress this year:

·       Do nothing. Congress does nothing and allows the current tax law to expire December 31, 2012. If this happens, then a $1 million estate tax exemption and 55 percent estate tax rate take effect January 1, 2013.

·       Extend current tax law. Congress extends the current tax law to 2013 and beyond. This increases the current $5,120,000 exemption by an inflation-indexed amount for 2013. Assets above the exemption amount are taxed at the current rate of 35 percent.

·       Pass a compromise bill. Congress passes an estate tax compromise lowering the estate tax exemption and increasing the estate tax rate to something more in line with the 2009 numbers of $3,500,000 and 45%. This might also include a repeal of portability between spouses, which has been in effect for the 2011 and 2012 tax years.
·       Repeal the estate tax completely. Congress would completely repeal the federal estate tax. This seems fairly unlikely given the current political and economic climate.

The uncertainty regarding the estate tax has prompted many taxpayers to take advantage of 2012’s favorable gift tax opportunities, including the ability to potentially gift up to $5,120,000 of value tax free. Gifting can also reduce potential state death taxes that are often based on a lower exemption amount such as Oregon.

For more information contact Michael Lortz or Erin Dulley, Geffen Mesher & Company, (503) 221-0141.

**Note: Any decision to sell capital assets should be based on consideration of economic fundamentals in conjunction with your investment goals in addition to the potential tax ramifications.

Tuesday, September 11, 2012

Developer Joe Weston Concerned About Development of Small Close-In Apartments

In a Portland Business Journal Real Estate Roundtable, Portland developer and apartment mogul Joe Weston said he worries about the proliferation of apartment projects bringing no parking and tiny units to Portland’s inner neighborhoods. Click here to read more.

To see more of HFO's current apartment listings throughout Oregon and Southwest Washington, click here.

Monday, September 10, 2012

New Multifamily Listing in SW Portland - 21 Units $1.75m

HFO is pleased to announce the listing of Capitol Terrace, a 21-unit apartment investment property in SW Portland.  Just minutes from city center with large townhouse style units, this property offers an opportunity to purchase a well-located westside multifamily investment on over an acre of land.

Click here to learn more! 

Tuesday, September 4, 2012

Expert Rent Growth Predictions: Steady For The Next Few Years

Axiometrics predicts that average apartment rents will settle into a steady pace of growth over the next few years, similar to rental markets in the mid-1990s, as occupancy rates stay very high.

Annual effective rent growth slowed from 3.83 percent in June to 3.73 percent in July, according to Axiometrics. That’s the lowest year-over-year growth since August 2010. Rent growth peaked last July at annual rate of 5.32 percent, but it has been close to an annual rate of 4.0 percent the past nine months due primarily to the under-performance in August, September and November last year.

However you slice it, rents are rising faster than inflation overall. The Consumer Price Index has grown at a rate of less than 2 percent a year this summer and grown less than 3 percent a year since the financial crisis. Read the Full Story at National Real Estate Investor online.

See all of HFO Investment Real Estate's Portland Investment Properties at