Augusta Economy

More News | Fort Gordon | Plant Vogtle | Savannah River Site | Editor

Local resale and rental investments picking up

  • Follow Local Business

Local real estate investors are starting to see the value in resales again as the economy moves further from recession.

Back | Next
Real estate investors Rob Lacher (left) and Jerry Reynolds look at a house under construction off McDowell Street in Augusta. The business partners have been buying properties in Summerville, razing dilapidated houses and building new ones to put on the market.  SARA CALDWELL/STAFF
SARA CALDWELL/STAFF
Real estate investors Rob Lacher (left) and Jerry Reynolds look at a house under construction off McDowell Street in Augusta. The business partners have been buying properties in Summerville, razing dilapidated houses and building new ones to put on the market.

Before the housing downturn began in 2006, local investors such as Don Morant found house-flipping a lucrative business, but a tenuous market left in the recession’s wake forced most investors to concentrate on rental properties.
“We were buying rental real estate because everything shifted to buying rental houses to hold,” said Morant, who has nearly 25 years’ experience investing in local residential properties.

The tide, though, looks on the verge of changing, and rehabbing homes for a quick sale is coming back into style, Morant said.

“Everything is starting to speed up,” he said. “If you get a house, price it right, fix it up properly, it’ll sell pretty quickly – much quicker then it was two years ago, because at certain times you could hardly move a house unless you were buying in certain target areas.”

Morant said he noticed the local market turning about a year ago, with more people looking to become homeowners than in years prior. Last year, he purchased a test house on Cumming Road and has since started working on another home to rehab in the Summerville area.

“Retail sales are starting to increase,” said Morant, though he is quick to point out that the market is still in the recovery phase. “People are getting loans. The market is starting to move.”

According to the most recent data compiled by the Greater Augusta Association of Realtors, there were 594 homes sold across the area in July with an average sale price of nearly $171,000. Those homes stayed on the market for an average 169 days.

In 2013, local agents sold 5,600 houses averaging $154,100, according to the association’s data.

Local investor Rob Lacher said business is booming for him and partner Jerry Reynolds, who have taken on about 20 projects so far this year. The pair, who run KMI/LRP Construction, focus on blighted properties in the Summerville area, purchasing the lots, tearing down dilapidated homes and building new single-family or multi-family homes. They maintain about a 40-60 percent ratio of properties they keep for rentals versus those they sell to homebuyers.

Lacher and Reynolds just finished a two-story, Charleston-style home on the corner of McDowell Street and Baker Avenue that sold for $182,000, with two similar homes planned next door. They estimate they’ll flush about $550,000 into the small development.

Another project, an investment of about $700,000, includes building six townhomes, three of which are now complete, at Wrightsboro Road and Craig Street.

“The market’s good,” Lacher said. “It goes back to building something high quality. It’s always going to sell if you do it right.”

On a national level, figures from the National Association of Realtors show that investment-home sales dropped by 8.5 percent to about 1.1 million in 2013 from 1.2 million in 2012. Owner-occupied purchases, on the other hand, rose 13 percent to about 3.7 million last year from 3.3 million in 2012.

Investment sales accounted for 20 percent of all transactions in 2013, sliding from 24 percent in 2012. The median price of an investment home last year was $130,000, increasing by 13 percent from $115,000 in 2012.

“Investment buyers slowed their purchasing in 2013 because prices were rising quickly along with a declining availability of discounted foreclosures over the course of the year,” said NAR’s chief economist, Lawrence Yun. “In 2011 and 2012, investment property was a no-brainer because home prices had sharply over-corrected during the downturn in many areas, creating great bargains that could be quickly turned into profitable rentals. With a return to more normal market conditions, investors now have to evaluate their purchases more carefully and do their homework.”

At Augusta-based Auben Realty, which manages properties and assists rental investors with purchases, investment sales hit record numbers this summer.

“People that were potentially afraid to get in the market because they didn’t know if it had hit bottom or thought it was unstable are realizing that now is a good time to invest,” said Tyson Schuetze, owner of the real estate brokerage firm. “Homes are still very affordable. They’re less affordable than they were a couple of years ago, but they’re still very affordable in terms of what you can buy a home for and what you can rent it out for.”

Though competition is starting to pick up from more investors entering the market, Schuetze said there is still an opportunity to find good deals around town.

Schuetze said rental properties are moving quickly, especially in Columbia County, and he expects it to increase with more job growth coming to the area from military and nuclear developments.

“We may receive multiple applications within the first couple of days of advertising,” he said. “I think there’s a large segment of the population that aren’t interested in owning homes. I think the rental market specifically is going to be very strong for a long time to come.”

Comments (1) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
Graymare
3244
Points
Graymare 08/10/14 - 08:49 pm
0
0
Buy my home!

Ready to move! My home is for sale!

Back to Top

Search Augusta jobs