Tuesday, February 26, 2013
Monday, February 25, 2013
In the Portland metro area, HFO expects rents will continue increasing while supply continues to lag demand and our vacancy rate remains among the lowest in the country.
Click here to see all of HFO's current listings.
Tuesday, February 19, 2013
The report can be downloaded here.
This report and its companion interactive website indicate that in 2011, the 446,000 residents of apartments in Oregon's multifamily industry contributed $11.9 billion to the economy and created 291,000 jobs.
Visit the website to learn more, and view the Oregon fact sheet here.
Monday, February 18, 2013
Oregonian Editorial Board complains: "A developer could still plop a 40-unit complex in the middle of a dense urban space and not build a single parking space."
Download a detailed PDF of these and other proposed changes from the City’s website at: http://www.portlandoregon.gov/bps/article/434428
The March 12th public hearing is at 12:30 pm at 1900 SW 4th Avenue room 2500 A. (4th and SW Hall, near PSU).
If you’re not available to testify in person at the hearing, you can send comments on the proposed amendments by email to firstname.lastname@example.org.
The Oregonian editorial board weighed in on the issue last week, arguing the proposal does not go far enough. The new standard for parking applies only to complexes with more than 40 units. “A developer could still plop a 40-unit complex in the middle of a dense urban space and not build a single parking space.” The editorial points out:
- The rules include many to dodge the minimum. Adding a few spaces for bikes and motorcycles, saving trees and including a little transit-friendly seating near the sidewalk, signing up with a car-sharing company, an 80-unit complex could drop its minimum requirement from 20 parking spaces to 5 or six.
- The city would allow developers to house their required parking spaces on nearby properties, making future redevelopment of those host properties more costly and complicated.
- The city continues to base minimal parking requirements on the availability of high-functioning and affordable public transit just as Tri-met continues to hike fares and chop service.
See more links to stories on this issue at:
See all of HFO’s current apartment buildings for sale, most with parking included! www.hfore.com.
Tuesday, February 12, 2013
Earlier this year many articles were written listing all of the tax changes that occurred at the beginning of 2013. That is not the purpose of this article. Instead we will review those changes that directly impact investment properties and discuss how 1031 exchanges are even more valuable to investors than they were before.
On January 1, 2013 two new tax laws which adversely affect many investors took effect: a new tax and an increase in the tax rate on capital gains. The new tax was part of The Affordable Healthcare Act. It imposes a 3.8% tax on certain investment income (including capital gains) on taxpayers whose Adjusted Gross Income exceeds $200,000 for single filers and $250,000 for married couples filing jointly. In addition, The American Taxpayer Relief Act raised the top long-term capital gain tax rate from 15% to 20% for some taxpayers. The 20% top rate applies to the extent a taxpayer’s Taxable Income exceeds $400,000 for single individuals and $450,000 for married couples filing jointly. It should be noted that these two taxes apply to different levels of income. Taxable Income is a smaller amount and results after a taxpayer’s deductions and exemptions are subtracted from the Adjusted Gross Income. Accordingly, the Healthcare tax will impact more taxpayers than if it applied to “Taxable Income”.
To illustrate the application of these taxes, let’s look at an example. Assume that Ted Taxpayer (married and filing jointly) has no other income other than the proceeds from a commercial property he plans to sell in 2013 for $3,000,000. He bought the property 10 years earlier for $1,500,000, put $200,000 of capital improvements into the building and took depreciation deductions totaling $600,000.
Ted’s adjusted tax basis in the building is $1,100,000: $1,500,000 (Purchase Price) + $200,000 (Capital Improvements) - $600,000 (Accumulated Depreciation). Assuming his closing costs will be $200,000 he will have a capital gain of $1,700,000: $3,000,000 (Sale Price) - $200,000 (Closing Costs) - $1,100,000 (Adjusted Tax Basis).
Since Ted is selling the property in 2013, he will pay three types of federal taxes: depreciation recapture, capital gain and a tax on investment income. He has a capital gain of $1,700,000; of this $600,000 is depreciation recapture tax and the balance of $1,100,000 will be taxed at the applicable capital gain rates. Ted’s taxes will be computed as follows: recapture tax on the depreciation taken ($600,000 x 25% = $150,000); and capital gain tax on the balance of $1,100,000 ($450,000 @ 15% = $67,500 and $650,000 @ 20% = $130,000). In addition, as a result of the Healthcare Act, he will pay tax on the investment income in excess of $250,000 ($1,450,000 x 3.8% = $55,100). Consequently, Ted will pay $83,600 (26.5%) more in federal taxes than if he had sold the property in 2012.
However there is good news. If Ted does a 1031 exchange, he can defer all three taxes: depreciation recapture, capital gain and the new healthcare tax. In summary, Ted has more reasons to do a 1031 exchange in 2013 instead of recognizing his gain and paying taxes: 83,600 reasons to be exact. Although 1031 exchanges have always been very beneficial to investors, they are even more valuable now!
IPX1031® prides itself on being the industry leader striving to help clients and their advisors keep current on tax issues pertaining to §1031 exchanges and applications. For more information visit www.ipx1031.com.
Wednesday, February 6, 2013
When: Thursday, Marcy 7, 2013
Where: The Kennedy School at 5736 NE 33rd Avenue, Portland
Time: 11:30 Lunch; 12-1:30 Class
With so many ways to do it wrong and no one way to do it right, no wonder many apartment owners don't enjoy obtaining their financing. Seventeen years of working with investors, appraisers and credit managers have gone into this practical seminar. It's delivered with humor, insight and perspective. So have fun, have lunch, and learn!
- Common mistakes to avoid when preparing your information for the appraiser
- Three things to ask about your loan documents that help you avoid future woes
- Things to know about federal regulations and the secondary market that will place you among the smartest apartment investors.
Tuesday, February 5, 2013
More Former Homeowners Are Choosing to Rent Due to Affordability and High Homeownership Expenses Download image CHICAGO, Feb. 5, 2013 /PRNewswire/ -- The average monthly apartment rental cost in the U.S. was $1,048 in Q4 2012, up 3.8 percent from a year earlier, according to Reis. At the same time…