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Don't Let USA Today Be Your Source For Real Estate Advice

The newspaper industry has moved to the internet, but never forget that these "media" companies remain in the business of content for money.

If the articles (for example in USA Today) fail to entertain and grab readership, then the organization cannot survive. Because of this, be wary of real estate advice and opinion provided by a national media outlet.

USA Today Real Estate Tips & Recommendations

Reader Questions

I received the following question from a reader:

I am in need of some professional advice.  Almost a year ago while reading the business section of the USA Today, I discovered the following and I'm wondering is there any truth to what I read.  The story said that properties such as the above were in high demand and moving at above average speed and that overseas and local investment groups were making these purchases, as well as parents with college age students and persons looking to invest for themselves on a small scale.

Could you please tell me the current average appraisal price for the above property and in your professional opinion could you suggest what you believe would be a reasonable listing price for the above?  On average, how long do these types of properties are on the market before they are sold? - MH

Ok, so let's give this a little background and discuss the property type. I purposely omitted the property in question so as to protect our reader's privacy.

The reader owns several student rental properties on the west side of town. These units had a history of being rented fairly consistently over the past ten years, and rents had moved slightly higher over the years.

Unfortunately, USA Today wrote a general article about real estate, suggesting that a backlog of demand from foreign investors was amassing (everywhere?). Our reader was hoping that this outside demand would rush into Tallahassee and pay top dollar for rental properties around our universities.

Real Estate Values Are Formed By Supply And Demand

Real values are local in nature. They move up and they move down with the local supply and demand for similar types of housing.

In Tallahassee, the 4000+ new student rental units created near the stadium and along West Tennessee Street have created an over-supply situation for units like our reader owns. It very likely will take years of growth to consume the additional units brought to the market.

Unfortunately for existing property owners, the new units will actually be consumed right away. It's the older units that will suffer with vacancy issues. This means that property owners will see rents decline as vacancy levels rise. Right now, there are far more sellers than buyers for these types of units and in many cases, there are no buyers at all.

No Magic Bullet

Do you really think a foreign investor will swoop into Tallahassee and do zero research? The fact is, cash investors are not only wealthy, but they are also very careful. They do their research. Sure, they have the means to mass capital, but they are not lining up to throw it away. I do not anticipate outside investors coming into Tallahassee to buy aged student rental properties.

The west side of Tallahassee remains in a buyer's market for investment properties. This means that now is not a good time to be a seller, it is best to hold and weather the storm. Sit down with your property manager and find out what you need to do to optimize your property and your situation; plan on holding it for several more years.

Regardless of what an article in USA Today says, I would not expect a flood of foreign investors to arrive any time soon to take your student rental off your hands. If for some crazy reason investors do arrive en masse, you'll be able to read all about it HERE on the Tallahassee Real Estate Website and take action accordingly.

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2066 Thomasville Rd
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