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 estatd research firm, said buyingf and renovating existing properties is more attractive thes e days thannew construction. “But buyers don’t flip unit s once they’re fixed up,” he said. they raise rents and try to get backtheir investment.” Some older properties, Danter said, don’t lend themselvesd to financial viability. A unit could have a good but couldbe “functionally obsolete.” In that case, theree might not be enough of a return in highert rents if a lot of money has to be sunk into improvintg the facility.
Obsolete units are thosed that would require new plumbing and electrica l service among other costly such as making it accessible tothe elderly. Small bedroomsz with no closets also mighft be a limiting factor despite agood location. “Location is critical, if not the most importantf factor,” Danter said, “but it has to be the rightg concept at theright price.” J. Rosenbusch, vice presidenr of investmentsat , said there’sw a reason rental unitw need rehabilitation. People who bought property in late 2004 through 2006now can’f keep up with the debt, he said. “They’re over-leverage d and let it all go.
They have a pretty significany vacancy issue and notablephysical issues. You see a lot of work needa tobe done,” he said. “It becomea more of a management issue. They can’g handle the property any more.” Rosenbusch said he and his Associate Vice PresidentMatthew Gockstetter, have seen an increasew in activity in the rehab The economy played some role in that, but he blamede owners for not understanding what they were getting into. Whilse they thought they were gettinv deals, they were actually buying when the unitw were selling atpeak prices, which have since faltered.
particularly those coming into the market for the first time, didn’t understand financing, taxes and insurance issues. Rosenbuschh said purchasing rental units is now one of the easierf avenues tofind financing. He also said there’s been increased activity by out-of-state buyers who see an opportunitgy to getgood deals. Columbus has had a stable rental market. But vacancies rose when subprim e mortgages made it possible for rentere to jump intoa home. Five yeard ago, Rosenbusch said, there was high vacancy and a lot of unitsd onthe market. “Columbus was beat he said. It’s a good time to said Brent Crawford, a principal in Columbus-based .
The company recentlt bought RemingtonStation Apartments, a 344-unit complex in Westerville. It also is renovatint Olentangy Commons Apartmentsat S.R. 315 and Henderson Road. Crawford expects the demand for renovated apartmentws to remain strong for three tofour years. With construction and land acquisitionj costs high and credit the new-build market has softened, makinbg it difficult for companies in that business to ramp up in a “You can’t just add 10,000 units,” he said. “We’re not seeint excessive building.
” Instead, upgrading counter tops, molding and cabinets allows renovators to raiser theirrent $75 to $100 a Crawford said his company tendse to hold onto rehabbed units a minimum of five years. Rentakl housing, with many locations having wait lists, is a good Still, Scott urged caution. “There’s a host of things that go intothess properties,” he said. “It may not translate into profit ofgreatf significance. There are outside forces and a different kind of If your creditis good, there is monehy out there. But it may be difficult to securee financing to do some of the thingsx that need tobe done.
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