Hi Alaskan Real Estate Gurus!
First time post...
I'm looking to buy an investment property in Anchorage before the year ends. I have spent some time in AK (never in winter though). enjoy fishing/hunting, and my Uncle lives in Anchorage. My wife and I really like it up there and are looking to invest in rental properties (Uncle has 3 rentals), potentially buying 3 or 4 solely for ROI over the next 2 years. I am in contact with a very experienced local agent in Anchorage. I'm hoping to pay $200k or less on a "newish" 3bed/2bath townhome/condo on the east side. I want to make ~$250/month in positive cash flow when it's occupied (this includes all expenses including a property manager). My agent didn't tell me this was impossible but I also didn't get a warm and fuzzies when I said these are the numbers I'm looking for. Looking at all the expenses (HOA, taxes, etc) and the price of rentals, it seems doable to me.
There are tax implications for us due to our income, my napkin calculations showed that closing a deal in 2019 would save us about $3000 vs waiting until 2020. Unfortunately, we won't have a down payment ready until November. My agent has said it is certainly possible to close by end of December if I have loan approval by mid-November. So, that is our current plan. I had a few questions about this, mostly looking to get second opinions outside of my Uncle and the agent I'm working with.
- Everything else being equal, is it worth the $3k tax savings to buy in nov/dec 2019 vs wait until sometime 2020 (we can be flexible when we buy in 2020)?
-Are sellers looking to "unload" properties this time of year (i.e. before winter really really sets in)? Our agent informed me that properties sell for 98% of list on average and I shouldn't expect to throw offers at 90% of list for places that have been on the market for a while (which was my perhaps overly optimistic plan) in November.
- Is it hard to find renters in the winter?
- Should I consider foreclosures off the table during this timeframe?
I really appreciate any responses you can provide. I have no experience as a landlord or a real estate investor but I'm excited to start this chapter in our lives.
I would love to talk you out of your plan. There is no precedent for appreciation with that style of property in this market. I personally know three people that want to sell theirs but can't because they don't want to take a $10 to $50,000 hit and would rather just rent it out. Single family and bigger is a different story.
Thanks for the response. Yes understood about appreciation. I'm not looking for market returns in the near term (5-10 years). I see investing in Ak as more of a hedge against our other investments. I.e. CA real estate, stock market, and the tech industry (aka our employers).
Hey there, local investor here. Condos in Anchorage can be a good investment for cashflow, and you may even be able to get those kind of returns but you will have to be picky. A lot of the condos that they have on the East side have high HOAs which will kill your cash flow. I second what @Connor Dunham was saying about SFR being the better investment for long term buy and holds, but to each their own.It really depends on what you are looking for. I personally invest in small multifamily, and have had great success with that for cashflow at least, what I was looking for when I started.
I actually prefer to buy in the winter for a couple reasons. First, prices tend to drop around the winter because most people list in the summer, and if their place still hasn't sold by winter then you can generally negotiate more, at least in my experience. Second, a lot of places around here are either poorly insulated or overly insulated. This is not as prevalent in condos, but it is still a lot easier to tell during the winter. You don't want huge icicles hanging off your roof or ice sheets forming and jacking up your roof. Shouldn't be an issue in newer places, but you never know. Some builders are better than others.
Finding renters in the winter can be difficult, but its def not impossible. Often JBER gets people PCsing in November, and with you being East side you should be able to fill it with a military family pretty easily. Assuming its a good looking place of course. Always get professional photos taken. Moving in the winter sucks but people do it.
I wouldn't totally take foreclosures off the list during the winter, but I would def be hesitant about them due to pipes freezing etc. Just make sure to do your due diligence.
Be wary of property management up here. There are a lot of really bad managers, and very few decent to good ones. If you want specifics you can pm me.
Any other questions let me know!
@Ryan Bray Personally, I don't think $3k in tax savings is worth staking your decision to purchase in the winter. You could easily spend more than that in holding costs before finding a tenant. Since @Chris S. and @Connor Dunham know the market, I'd listen to their advice. As for your agent, sounds like you need an investor-friendly one. He should be able to provide you average days on market for properties in the winter for both houses for sale and for rent. That may help you determine how long the property will sit on the market without a tenant.
Thanks Chris! Really appreciate the tips. I had figured the military transfers run year round.
I had noticed the issue with high HOAs... Am trying to get in under $250/month. One place I was looking at was $172/month but it is now pending... :-/
I definitely would prefer SFH if I was up there, but investing remotely makes me nervous about things, some of which a decent HOA can handle.
DOUBLE POST OOPS
Update on our progress... We got an offer accepted on a 3bed/2bath foreclosure property in Northeast Anchorage. I'm pretty happy with the deal as it currently stands.
Looking for prop management recommendations... I got one for all-star property management but interested to hear other options. If we can get a tenant in there by February, I may look at picking up another similar property before winter is over. If not, will be back in market next November.
This is our first investment property... Exciting stuff!
Figured i'd update status on this old thread. The property is rented out and now we're looking to invest in another property in Anchorage. It was a brutal experience but we are blessed with a great RE agent and got it done.
Curious if anyone has thoughts about the foreclosure market. :)