Whether it’s buying a college-town condo for a son or daughter in school, a vacation home, or a property for eventual retirement, investors are putting their money into Central Virginia property. And the market for real estate investment properties is definitely bullish.
Much of the attraction is in the “livability” of our area, which is mentioned repeatedly in publications like Money Magazine. In the past two years, Charlottesville has been rated America’s Smartest City by Luminosity.com, #4 Book-Loving City and #4 Most Romantic City by Livability.com, #4 Best Small City For Working Women by nerdwallet.com, one of America’s Best Intergenerational Communities by Met Life & Generations United, and the second best Small Community City for Overall Well-Being by Gallup. Another major positive is the economic stability of our region, which translates to a generally safe investment climate for real estate.
“As far as a positive return on investment, real estate dominates,” declares Bill May of ERA Bill May Realty. “My wife and I own a number of homes we don’t live in.” He notes that the stability of the economy in the area, especially because of the University of Virginia, makes investment properties a good deal. “If you’d bought real estate in 2000, it would have appreciated today more than the stock market,” he says. He adds that he can’t speak for the whole country, but he can for the Charlottesville region.
“Owning second properties in the Charlottesville urban area is good because you can always find tenants,” he says. He cautions that such an investment may not be profitable initially. “Many times a property you buy will not rent for enough to cover your mortgage payment with PITI [principal, interest, taxes and insurance], but over a period of time it will cross that line.” In the meantime, he points out, “You have someone helping you with payments, building equity, and gaining appreciation.” Some put their money in real estate for an additional reason. “Some people like real estate investments because you can touch them as opposed to stocks and bonds,” May says. “You can always rent a property for some price, no matter how bad the market gets. You can’t say that about some stocks that have just gone away.”
REALTOR® Michael Guthrie of Roy Wheeler Realty Co., notes that some out-of-town investors buy condos or a pied-a-terre in Charlottesville for themselves to use for football weekends or for their children who are students at UVa. “They might buy a condo along JPA [Jefferson Park Avenue] or a little house along Stadium Road. A significant number of people do this.”
Buying living quarters for a student can be a shrewd investment, agrees Pam Dent, a REALTOR® with Gayle Harvey Real Estate. She recalls working with a man who was looking for a house to buy for his daughter while she was attending UVa. “He wanted something walking distance to the grounds,” she says. “The plan was to rent rooms to her friends, then when she graduated, he would keep it as a rental property.”
Potential retirees are also looking at property in the region. In fact, that’s nothing new.
In the mid-1990s, Ray and Joy Calfo were living in Pittsburgh, Pa, but looking ahead to retirement. After reading complimentary reports about retiring in our region and considerable reconnaissance in several states, they purchased a lot at Lake Monticello in Fluvanna County. Finally, in 2007, they left Pittsburgh, rented a local place and built their retirement dream home.
Dent isn’t surprised at the Calfos’ tactics. “I find a number of people I work with are retirees or getting close,” she says. “For example, I recently sold a house in Glenmore to a retired couple. They already have a home in Maryland, but eventually want to be in Charlottesville because of the medical facilities. This will become their primary residence and the one in Maryland will become their secondary.”
She also worked with a Virginia Beach couple who bought a short-sale home. “They got a good price and for now this will be their getaway home on some acreage,” she says. “They’ll have a garden and when they eventually retire, it will be their primary residence.”
This may be the perfect time to get into real estate. Last year’s home sales in the Charlottesville region were up 10 percent from 2012 making it the second consecutive year of double-digit gains. “There are some great buys in Charlottesville and surrounding counties,” concludes May of ERA Bill May Realty. “The long and the short of it is: this is a good place to own property over the long haul. Let it accumulate. Study what prices have done in our area. Real estate investment around here keeps up with inflation and keeps up with return. I’m bullish on it, absolutely.”
Marilyn Pribus and her husband live in Albemarle County near Charlottesville.