Welcome! This blog tracks the real estate market in the Central Shenandoah Valley, featuring market data and analysis, an exploration of common buying and selling questions, and candid commentary on all things real estate.
If you are interested in discussing any of the topics on this blog, or the details of your specific real estate situation, call or e-mail me!
Does buying or leasing make more sense with a two year time frame?
It depends on the price range, how much of a down payment you are making, whether you are willing to keep the property as a rental property after you move out, and many other factors. However, above I have included is a 2-year and a 3-year analysis of buying versus renting a property valued at $150K compared to $300K, which shows that....
There are, of course, plenty of extenuating circumstances. Many people might buy a $150K house (or townhouse) even if they are planning to be there for only 3 years --- because they want their own home (not their landlord's), or to get in a certain neighborhood, or because of the tax benefits, etc.
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Apparently our area has an unmet need of high end rental properties, as The Reserve at Stoneport will be expanding their community off of Port Republic Road near Sentara RMH Medical Center.
Current Community: 168 apartments
Planned Expansion: 240 apartments
Per the developer, the current inventory of apartments are 98 to 99 percent full, and the first apartments in the new phase will be available in late 2017.
Rental rates will range from $985 - $1735 per month, and there were be even more one-bedroom units in the new phase....
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These upscale apartments at The Reserve at Stoneport were built over the past year or two and many seem to be renting quickly. There are floor plans with anywhere from one to three bedrooms, with rental rates starting at $985/month for a one bedroom apartment -- and going up to $1500-$1700 or a three bedroom apartment.
These apartments are certainly a unique addition to our local rental market and I have been pleasantly surprised that they have leased as quickly as they do. Larger metro areas certainly seem to have lots of these types of rental communities, but this was a first for Harrisonburg and Rockingham County.
Given continued low interest rates and some increase in home values, let's take a new look at the opportunities of buying versus renting.
RENT = $1000/m. There are regularly options for renting a two-story townhouse in Harrisonburg for approximately $1000 / month in Avalon Woods, Beacon Hill, Stonewall Heights, Liberty Square, etc.
BUY = $865/m. With a 95% loan, buying such a townhouse apparently may cost as little as $865 per month assuming a $140K purchase price and 3.875% interest rate per SunTrust Mortgage's payment calculator....
This shows an $135/month cost savings of buying instead of renting. If we then look at the difference between renting and buying over a five year time period, the advantages start to pile up.
As you can see, this builds a rather compelling case for buying instead of renting if you are going to be living in this potential townhouse for the next five years. Two other factors to keep in mind....
This was another helpful data set in the housing study prepared for the Harrisonburg Housing and Redevelopment Authority....
Non-Student Apartment Complexes in Harrisonburg and Rockingham County:
This calculator on the NY Times website (find it here) is the most detailed such calculator that I have seen in a long time. It takes many (MANY!) factors into account.
If you're torn as to whether to buy or rent, feel free to check out the calculator, or set up a time to meet with me and we can discuss it together.
The Reserve at Stone Port, a new development of upscale apartments in close proximity to Sentara RMH Medical Center is set to open next month.
This will be a first for Harrisonburg -- as most apartment complexes currently located in Harrisonburg are new - but are for primarily occupied by college students, or are older complexes and do not offer the these finishes, amenities, etc.
According to the developer, these apartments will NOT be rented to undergraduate students.
Phase 1 of The Reserve at Stone Port includes 168 units, but an additional 228 units are planned for future phases.
The developer also recently began site work for Bellaire at Stone Port, an 88-unit assisted living and memory care community also to be built at Stone Port. This community is slated to open in January 2016.
Read more about The Reserve at Stone Port, Bellaire at Stone Port, and Stone Port in general in last week's Daily News Record article.
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If you haven't driven down Ridgedale Road lately, you might not have seen how construction is booming at the Reserve at Stone Port!
This luxury apartment community is slated to open this Fall, and is described as follows on the Cathcart (developer) and Reserve at Stone Port (community) websites....
"The Reserve at Stone Port is a wonderful escape from the ordinary. Relax in an atmosphere appointed with luxury and comfort, where exceptional finishes and remarkable features outline each unique and spacious 1, 2, and 3 bedroom apartment homes. Experience extraordinary style, convenience, resort-style amenities, and an award-winning customer service team."
The site plan (above) references amenities including a clubhouse, swimming pool, fire pit, hot tub, cabana, tot lot, putting green, sport court and dog park!
There appear to be 1 BR, 2 BR and 3 BR options available, the floor plans for which are available online.
Check out this cool buying vs. renting tool from the New York Times that gives you the ability to easily these two compare scenarios.
In the sample property that I scoped out (above) it made sense to buy a $150K townhouse (instead of renting it for $900/m) if you were going to be in the home for 3 or more years.
Click here to check it out, and let me know (scott@HarrisonburgHousingToday.com) if you would like to sit down to talk through these details together.
The Reserve at Belvedere, as shown above, is a project the Cathcart Group recently completed in Charlottesville. They have now begun work on the first 168 apartments.
Per today's Daily News Record:
Today's Daily News Record article:
Luxury Complex Coming
My prior story about The Reserve:
The Reserve at Stoneport seemingly one (significant) step closer to reality
The Cathcart Group's January 2014 press release:
Cathcart Group to break ground on Luxury Apartment Community
The location of The Reserve at Stone Port....
This appears to be the layout of the community....
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As shown above, my new web site provides the ability to search for rental properties that are currently available through our local MLS.
As a recap, here are some other sites to view as you are searching for rentals....
There is a lot planned for Port Republic Road --- likely related to the relocation of Rockingham Memorial Hospital, and the widening of Port Republic Road.
We recently talked about the following new developments coming on Port Republic Road....
And now, I'm finding more details online about the residential development to take place at Stone Port.
Here are details of the residential development at Stone Port, from their web site....
All of the above (Aspen Heights, Stone Spring Courtyard, The Reserve at Stone Port) are all indications of a recovering, growing local economy.
In meeting with a potential buyer of a City townhouse yesterday, we found ourselves comparing the opportunities in buying versus renting.
RENT = $900/m. There are regularly options for renting a two-story townhouse in Harrisonburg for $875-$950 in Avalon Woods, Beacon Hill, Stonewall Heights, Liberty Square, etc.
BUY = $817/m. With an FHA loan, buying such a townhouse apparently may cost as little as $777 per month assuming a $130K purchase price, 3.25% interest rate, 3.5% down payment.
This shows an $83/month cost savings of buying instead of renting. If we then look at the difference between renting and buying over a five year time period, the advantages start to pile up.
You'll also want to keep closing costs in mind (for buying) but as you can see, there are some compelling reasons to consider buying a townhouse if you are in the market to rent one but know that you'll be in the area for the next five years.
The mortgage details were generated using Wells Fargo's online mortgage estimate tool and this is the scenario I was considering.
Per Calculated Risk, REIS is reporting the lowest apartment vacancy rates in 10 years. The REIS metric is just based on large cities, but this is an overall trend being seen in many markets across the country.
In Harrisonburg, there continue to be surpluses in student housing apartments, but vacancy rates do seem to be quite low for non-student rental properties in and around Harrisonburg.
I help people to buy houses and sell houses all day long. When it comes to helping people find a property to lease, it's harder for me to help, for these reasons....
If you are looking for a rental property, I would love to help you find a place to live -- but I won't be able to be much help based on how things currently work in the Harrisonburg area.
Fellow Realtors -- tell me I'm wrong! Do you approach this any differently than I do?
Local Innovators -- fix this problem! Create a solution to make it easier for tenants to obtain rental housing in this area!
I am seeing more and more properties these days advertised for rent on Craigslist that are not really available for rent. They are typically properties that are really listed for sale -- and some Craigslist scammer grabs the photos and listing information from the web and promotes the property for rent on Craigslist.
If you e-mail the supposed owner of the property through Craigslist you'll usually discover that they had to relocate internationally and thus they just really need to find a tenant. They are typically offering properties for lease at ridiculously low rental rates -- so low that prospective tenants seeing the ads on Craigslist almost already know that it is a scam. If it seems too good to be true, it probably is!
Before you mail away your money (never to be seen again) to a property owner who advertised their property for rent on Craigslist, you might want to first check to see if the property is also listed for sale, and if so, verify the supposed owner's story with the actual owner's Realtor.
As per the Daily News Record this morning, Harrisonburg may soon (2014) have its first gated community featuring luxury apartments. Most of these apartments (~70%) would be one bedroom apartments and would be geared towards "transient professionals" per the developer, Dain Hammond.
The 200+ unit development on six acres at the corner of Port Republic Road and Stone Spring Road would feature a triangular, 4-story building with a large courtyard and pool in the center of the building.
"Hammond envisions the development appealing to renters seeking upscale short-term housing. That would include RMH doctors who may perform surgeries at the hospital a few times a week and need a nearby "crash pad," or a visiting professor at James Madison University for a year, he explained. "It's more for the transient' professional," Hammond said. "That's our target demographic."
Read the full Daily News Record article here.
If you are looking for properties available for lease/purchase in Harrisonburg and Rockingham County you can now easily find them on www.HarrisonburgLeasePurchase.com.
Also, don't forget, if you are looking for potential short sales in Harrisonburg and Rockingham County you can find them on www.HarrisonburgShortSales.com.
Also, don't forget, if you are looking for bank owned (REO) properties in Harrisonburg and Rockingham County you can find them on www.HarrisonburgREO.com.
In many cases, your better option is to keep renting your townhouse --- and doing whatever it takes to find a tenant --- rather than trying to cut your losses via a sale.
In the example above, you could go for years with reduced ($750/m) rent with annual losses of $1800 before you came anywhere close to realizing the full amount of loss realized by a quick sale on day 1.
There are plenty of ways to compare the opportunities of renting versus when buying. For example, a tenant in Avalon Woods recently discovered that he is paying more in rent per month than he would have to pay for a mortgage in purchasing this fantastic townhouse.
This phenomenon is apparently also happening from an overall perspective as well, though, as median rental payments have now increased enough and mortgage payments have now decreased enough such that the median values are equivalent. The extraordinarily low interest rates we're seeing these days definitely help!
Source: Capital Economics, Thomson Reuters
As this insightful article points out, however, the up front costs of buying (closing costs) are typically much higher than those related to renting (a refundable security deposit). Furthermore, it is quite a bit easier to decide to stop renting (provide notice to landlord) than it is to stop owning a home that you bought (sell it).
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